Trading W-2 for Self Management- 0-92 Units in 16 months!

Trading W-2 for Self Management- 0-92 Units in 16 months!

Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes

I hope to provide an informative account of how I was able to scale to 92 units in 16 months, leave my W-2 job and truly find my passion.

Back Story:

I am 33 years old, I am married with two young (1 and 3) children. My career before REI was as an IT project manager at an insurance company. I currently own 92 multi-family rental units in Omaha Nebraska, mostly with partners and self-manage. The portfolio consists of properties ranging in size from duplexes up to a 24 unit building.

Financing: I received my initial capital through a HELOC on my primary residence. All my properties are traditionally financed with 20-30% down on 15-25 year AMs that balloon between 5-10 years. I have also used hard money and private lenders as well.

What Started my obsession with REI:

I, like many of the individuals on BP was frustrated with the lack of freedom as well as minimal feeling of accomplishments through my 9-5 job. I had always known I wanted to do something entrepreneurial but had no idea what direction to proceed.

Before I go much further I want to highlight some of the effects of beginning your investing career:

  • 1.People will doubt you and think you are crazy. They will say Real Estate is risky, they will say you have a great job, they will ask are you worried about plunging toilets at midnight. Be respectful to these people but do not internalize their words. Soon enough they will see your success and want to emulate your actions.
  • 2.You will have to sacrifice a lot of your fun time. No more lazy Sundays or lunches with your complaining coworkers.. you have work to do.
  • 3.Your sacrifices will affect your family, you will be on your phone more, likely you will now be working your full-time job and investing “job”. This is the harsh reality (at least for me) to get where you want to be. It is vital to surround yourself with a strong support system.
  • 4.You will become very aware of your goals and that most individuals do not have goals further than next week. This is ok, focus on yourself but give conscious effort to help others.

January 1st 2017: off of friends recommendation I picked up “Rich Dad Poor Dad”. I finished the book within two days and immediately realized my idea of wealth building was completely backwards.

In 2017 I had zero debt, a good job and was leveraging my 401k… I have traded that philosophy to acquire large amounts of debt, no 401k or IRA contributions and now have the freedom to control my own financial destiny.

Below are the steps I took to remove myself from my W-2 (and 30 years of working for someone else) and obtain a career as a real estate investor:

Step 1 (Education): Read and listen to as many books and podcasts as possible. Below are the books I have read and/or listened to (real estate and business):

This is the most important step in your journey, you must be constantly educating yourself! If you don’t like to read, listen or educate yourself than unfortunately you will likely not find much success (although I am sure there are those out there that have succeeded without).

Rich Dad Poor Dad, Millionaire Real Estate Investor, Multi- Family Millions (Dave Lindahl), ABC’s of Real Estate Investing, The Book on Rental Property Investing, Hold, The Advanced Guide to Real Estate Investing, The Due Diligence Handbook for Commercial Real Estate, Millionaire Real Estate Agent, The Book on Managing Rental Properties (Brandon Turner), The Emyth Revistited

Crushing It in Apartments and Commercial Real Estate, Emerging Real Estate Markets ,The ABC’s of Property Management, Wheelbarrow Profits, The One Thing, Outliers, Start with Why, David and Goliath, Chasing Excellence, Extreme Ownership, The Compound Effect, The Entrepreneur Roller Coaster, Be Obsessed or Be Average, The 10x Rule, The Obstacle is the Way, Ego is the Enemy, Am I Being Too Subtle, 48 Laws of Power, Atlas Shrugged, Man’s Search For Meaning, Sapiens, Tools of Titans, Four Hour Work Week.

Step 2 (financing): To get a better idea of what I was capable of purchasing, I met with four different lenders and began a relationship to acquire funding. I decided to open a HELOC on my primary residence, this allowed me to have access to capital if I came across an available deal.

***How did I choose the lenders? I choose a larger bank (better rates), two local banks (less restrictions, and one in which I already banked.

Step 3 (network with everyone): During my lunch breaks at work and in between changing diapers I would call/text anyone I knew or didn’t know to discuss real estate. Friends, brokers, lenders, attorneys. Anyone who either had a relationship to investing or was a person I looked up to based on their successes.

Find everyone in your network that is smarter than you and begin networking and explaining your goals. They likely know other smart people and those smart people will know someone who invests in real estate (Because smart people invest in real estate… just like A=B B=C A=C)!

*****I can't underscore how important networking is, I was able to link up with an experienced first partner who helped (and still helps) guide me through REI.

Step 4 (analyze deals and market): Analyzing multiple deals everyday as well as market rents for the areas I was targeting. I regularly searched through Zillow, realtor.com, Loopnet and Trulia. I used these sites to find properties for sale, current rents, as and look over previously sold properties.

Step 5 (leads): Immediately I realized that going about finding a deal through Zillow was nearly impossible and that brokers are not incredibly willing to spend time handing off deals to a newbie. So…. What did I do?

  • 1.Started posting on Biggerpockets (I received my first deal through a BP real estate agent)!
  • 2.Downloaded a list of multi family owners from Listsource.com
  • 3.After receiving the list I searched for phone numbers and began looking up every property (assessors website and Zillow) and becoming familiar with the neighborhoods. I would also walk the neighborhoods and properties over my lunch break and on my drive to and from work. (this is before I made a call or sent out any letters).
  • 4.Once I had a decent understanding of my criteria I began hand writing letters (191 to be exact) and calling the phone numbers I was able to gather online.
  • *****This was the catalyst to me finding deals and launching my career***** I was able to do six deals from that initial list.

Step 6 (start networking group): After attending the local REIA a few times and receiving a lot of value I realized that starting another group would bring at least twice the value. With the help of my partner I began a networking group which now in less than a year has over 200 members and regular attendance of 40+ individuals a meeting.

Property Management:

When I initially began learning about the power of real estate and passive income I assumed I would also be a passive investor and reap the benefits of financial freedom. Quickly I realized that if I were to take the passive approach my goals of quitting my W-2 would be extremely delayed (also I would be putting my life savings into another person’s hands). I realized that property management, although a job in itself, would allow me to control my career and financial freedom.

Caveat: Property management is Very demanding. Do NOT manage your own properties if:

  • 1.You are not a people person.
  • 2.You do not like talking on the phone.
  • 3.You dislike working weekends (or any hour of the day outside of 9-5).
  • 4.You do not want a second job. This is NOT passive, it requires you to create systems and deal with all the complexities that a business entails.

Reasons to manage your own properties:

  • 1.You are an effective manager and for the most part enjoy people.
  • 2.You want to reduce vacancy and expenses (after the property has been repaired my vacancy rate is below 2%).
  • 3.You want to start your own business and instill a certain “culture” at your properties. I focus heavily on customer service, I am not a pushover but try to go above and beyond as far as customer satisfaction.
  • 4.It keeps you very in tune with your investments, which may be the key to your success.

Thanks for reading and if you would like to talk please reach out through BP or any other channels! I would love to connect with more individuals and discuss Real Estate!

281Reply
2,789 views

Most Popular Reply

Investor · Omaha, NE · Member since 2016 · 33 posts · 26 votes
8y

@Collin Schwartz forgot one large detail that has been taking up a good portion of his time the last year and a half - giving back!  Thanks for being a mentor, for always being open to provide advice, and for starting up and managing the meetup.  Appreciate it buddy!

See this reply in the discussion

377 Replies

Jump to latestLatest
  • Member since 2017 · 3 posts · 3 votes
    8y

    Hi Collin,

    What's an "AM" loan? 

    I'm familiar with ARM, Interest Only, and balloon loans.

    Thanks in advance,

    Kevin

  • Torrance, CA · Member since 2017 · 24 posts · 10 votes
    8y

    Congratulations 

    @Collin Schwartz. Very inspiring. 

  • Investor · Dallas, TX · Member since 2016 · 20 posts · 8 votes
    8y

    Congrats on your success.  Extremely motivational! 

  • Rental Property Investor · Cleveland, OH · Member since 2018 · 191 posts · 432 votes
    8y
  • Rental Property Investor · Jersey City, NJ · Member since 2011 · 1k+ posts · 876 votes
    8y
    Originally posted by @David Keys:

    How many properties would you have without a partner?  Just curious.  

     Dozens of posts and apparently you and I are the only ones thinking this.  Building a business of any kind is impressive, even if you are a minority owner, but I find the headline misleading. He does not own 92 units, he is a participant, and has not been explicit about the degree of his ownership. This is far from the 1st time I've felt that syndication management has been represented as primary ownership on BP, numerous podcast guests announce they own vast numbers of doors, and then deeper in comes the revelation that it's mostly syndication.

  • Member since 2018 · 2 posts · 1 vote
    8y

    I can appreciate this experience because it is very similar to my own.  Thanks for sharing......exciting stuff.

  • Real Estate Agent · Windsor, CO · Member since 2016 · 133 posts · 27 votes
    8y

    Thank you for sharing Collin! My business partner and I have been looking at multifamily deals for almost a year, even though we have been looking at bigger deals (50-150 units) reading stories like yours, keeps us moving forward and knowing that there is light at the end of the tunnel and we will get one of our LOI's accepted!

    Could you share with us what your letter said? Was it short and sweet? Was it on yellow paper with red ink? Also did you get action from the first set of letters you sent out or did you have to send out a couple before getting a response? I am also looking to buy a few duplexes or triplexes for my own portfolio, so it would be ideal to start sending out letters to home owners in my area to see if I can find any off market. Any ideas would be great :) 

  • Member since 2018 · 36 posts · 11 votes
    8y

    Great Article, and the steps are AWESOME... you don't mind if we emulate you, right? Imitation is the highest form of flattery!!! Rock-on, Collin!!!  Maybe you can give us more (juicy) details on further articles... please do so!!

  • Honolulu, HI · Member since 2018 · 6 posts · 1 vote
    8y

    Thanks for sharing an inspiring post Collin and congratulations! 

    Continued success sir.

    James 

  • Kensington, MD · Member since 2017 · 29 posts · 11 votes
    8y

    Colin, I am currently stationed overseas and am looking at investing outside of my home are (Washington DC). Could I give you a call sometime to discuss? I have a lot of equity and am looking into what to do with it, really interested in partnering with someone to pick up an apartment building or something similar. Thanks

  • Investor · Las Vegas, NV · Member since 2015 · 43 posts · 7 votes
    8y

    @Collin Schwartz

    Great read.  

    For your first 3plex, how did you increase the rents from $2200 to $3150?

    What tips do you have for finding an undervalued rental property?

  • Investor · Roswell, GA · Member since 2017 · 14 posts · 2 votes
    8y

    Collin, thanks for sharing your blueprint. It’s evident that your diligent and purposeful in making it happen. Much respect to you for taking the plung!

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Johann Jells great question! I am 50-100% ownership in all my properties. The reason the unit count is important is that I manage all those units and create income from the management of them. The intention of the post is that management can help individuals create income and have a better understanding/control of their investments. I agree that unit count can be misleading. Thanks for reading!

  • Investor · Los Angeles · Member since 2017 · 22 posts · 12 votes
    8y

    Amazing initiative you took to get you where you are now, taking action is a huge part of it!

  • Rental Property Investor · San Diego, CA · Member since 2017 · 66 posts · 66 votes
    8y

    Collin - love to see you absolutely crushing man!  I remember our conversation last January when you were talking about quitting your job but still had some "work" to do.  Very impressive to see how quick you made all this happen.  Keep at it bud!

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @David Keys the answer could be 0. Partners have played a key role in my development and confidence as an investor. If you are asking unit count than about 60ish and that does not include single families.

  • Rental Property Investor · Montréal, QC · Member since 2018 · 16 posts · 4 votes
    8y
    @Collin Schwartz Good inspiring stuff!! And congrats on your accomplishments!!👍🏾
  • Member since 2018 · 14 posts · 5 votes
    8y

    Great post Collin and it confirm that I am moving in the right direction. I am also an IT project manager with a big financial company and for long want to start some thing of my own. Cannot believe the similarities. Good luck for your future deals and keep rocking.

    Cheers

    Anuj

  • Lender · Dallas, TX · Member since 2017 · 18 posts · 10 votes
    8y

    @Collin Schwartz Thank you for sharing your story, very inspiring. Love the hustle!

  • Rental Property Investor · Charlotte, NC · Member since 2015 · 72 posts · 30 votes
    8y

    @Collin Schwartz very impressive and very happy for you and your family.  

    what is the average rent of your units?

    did you have any specific investing criteria?

  • Member since 2017 · 2 posts · 0 votes
    8y

    Hi Collin,

    Thanks for your post and advice! As someone interested in REI and little experience, what did your letter to multi family owners consist of and what was your criteria? Thanks in advance!

  • Anthony LunaBusiness Member
    Property Manager · Los Angeles, CA · Member since 2018 · 4 posts · 6 votes
    8y

    Thank you for sharing your thoughts, advice and experiences. Such a great read.

  • Flipper/Rehabber · Toronto · Member since 2018 · 5 posts · 0 votes
    8y

    Great story, thanks for sharing. I would appreciate if you could share what you had written in your letter.

  • Tax and Accounting Consultant · Philadelphia, PA · Member since 2015 · 6 posts · 0 votes
    8y

    Nice work. Congrats!

  • Member since 2018 · 3 posts · 2 votes
    8y

    Great post Collin.  I’m exactly where you were when you started and really needed the encouragement.  Keep crushing it buddy!

Join the conversationCreate a free account to reply, vote on answers and follow this thread.