WOW!! What a long way in 3 years!!

WOW!! What a long way in 3 years!!

Johnson City, TN · Member since 2014 · 140 posts · 133 votes

Okay this may be a long post.. but it is amazing what persistence can accomplish... When I first got into real estate investing I'd say about 4 years ago is when I joined bigger pockets and I would continuously read the success stories and wonder how these things were accumulating for these other investors and how they were able to scale. I will give a brief run down of my story and why I am posting in the success stories although there is so much farther to go.

I graduated college got a 9-5 at Fedex and thought I was doing well at life like I had been taught. I was going to go get a masters degree when a guy at work gave me a book called 'Rich Dad Poor Dad'. He told me I should consider reading the book before going back to school. The book blew my mind! It single handily changed my life.  I had always wondered what separated the rich and poor and after reading this book I had an extreme epiphany. I immediately wanted to start investing in mulitfamily real estate. I figured if I continued to work my job I could save 20k year and buy one property a year then year 2 buy two properties and have my portfolio snowball that way.  After a 6-8 months of trying and failing, reading as many books as I could get my greasy hands on, and constantly networking and looking for properties I finally found a triplex I bought in August 2015. 

My mother was dating a guy who I ABSOLUTELY HATED!! After a while I finally became cordial with him although we never spoke. At this point I had became relatively knowledgeable about real estate after constantly reading (at least 20 pages a day.. still to this day) and taking action, failing, and repeating. She kept bugging me to show him what I was doing with real estate that he was interested in investing. For months she would ask me to show him some properties or deals. One day, after constant harassment from my mom I finally brought over a deal for him. He is from Lithuania and did not understand investing what so ever so I had to explain every detail of the deal to him. After I finished explaining the deal he asked me, "what if I don't want mortgage I just buy cash". I was like WOAH!? I'm thinking in my head YOU HAVE 130K cash!? I immediately reached back to my real estate reading and explained the power of leverage to him.

At this point it had been a few months since my first deal and I was just manifesting. Out in the field meeting people, analyzing deals, speaking to people about real estate and my goals. I had just gotten close with these sellers who I tried to buy a 4 unit off of previously when I first started and I ran back into them at an auction. They had told me they were selling a 12 unit for 500k. I had brought an investor to the property with no avail. Let's fast forward to two weeks later when I brought my moms boyfriend the duplex deal. After, explaining leverage to him I said I have a deal for you to check out. It was the 12 unit for 500k I had been trying so hard to get. 

I compared the numbers side by side with him. The 130k duplex paid in cash would only produce 18k/year max. 100k down on the 500k property would produce around 30k/year net. The only problem I didn't have enough money to go in half with him. I brought him a proposal that stated we would be partners in the deal and I would do everything he could imagine in regards to management in the property and all he had to do was put his money up and collect a check. I explained to him I only had 20k. He said he could cover the 80k. When we were preparing the LLC I asked about the ownership and said its "51(him)/49(me)" and he said in his Russian accent "60/40" I said okay in a heart beat. I would have done anything to get that property. We closed on the 12 unit in August of 2016.

After about 15 months I found another 9 unit in which the numbers made sense. We purchased the property for 330k with 66k down 20k from me 46k from him. This purchase was in November 2017. 

Recently, I really tried to level up and buy 71 units for 2.4 million. Two different properties from the same owner 41 unit and a 29 unit.  I had convinced my partner to "burn the ship" and put the last of his 500k down on this property because we had some outs and it was a cash cow. He would have had 100k cash after and owns his house in full so he felt okay with it. We actually ended up needing 668k for our downpayment after closing cost etc. I paid a business broker who only does deals over 1 million to work with us to find us creative financing. We we working with him for 4 months at which we had finally secured lending. I thought I had made it. Or so we thought. Before the lender moved forward he came to see the property and he just had a bad taste in his mouth. He uped our requirements and the deal would just not financially made sense on our end if something bad happened we'd be screwed. So we it was a let down but like a shoot for the stars land on the moon type situation. We ended up buying one of the properties under contract a 29 unit for 1,025,000.00 my FIRST MILLION DOLLAR DEAL WHOOOO!!!

We now have 51 units together and I still own my original triplex that I live in and rent the other 2 units out so I now have 54 units under management. It is amazing to see how far we and I have come since joining biggerpockets although I have been MIA for years on here. My goals now are to focus on continuing to grow as fast and large as possible through any means necessary. 

116Reply
495 views

Most Popular Reply

Houston · Member since 2018 · 28 posts · 16 votes
7y

Wow, that's incredible.

So how is your relationship with your mothers boyfriend now? 

Also, can you explain what your partnership details looked like on the first deal? So you agreed to pay 20, him 80. How did you split profits? How was this made official? (I'm new to REI / even newer to partnerships).

See this reply in the discussion

128 Replies

Jump to latestLatest
  • Real Estate Broker · Walnut Creek, CA · Member since 2015 · 6 posts · 1 vote
    7y

    Congrats! Thank you for sharing. Are you managing the units yourself?

  • Investor · Morristown, TN · Member since 2015 · 2 posts · 1 vote
    7y

    Such an awesome success story, Skylar!  Thanks for sharing.  You and I are practically neighbors.  I went to college in Johnson City and live and invest in Morristown.  I've been investing for 15 years and I've been stuck on 10-12 units for quite some time.  It's encouraging to see someone blast through like you have!  It gives me motivation to push for the next level!  

  • Rental Property Investor · Seattle, WA · Member since 2018 · 129 posts · 163 votes
    7y
    @Skylar Dejesus Nice success story. It just exemplifies that REI is a business based on relationships. Self-made people have a team to help them close on deals. Congrats!
  • Whitman, MA · Member since 2018 · 104 posts · 80 votes
    7y
    @Skylar Dejesus Congratulations! What an inspiring story: I'm a newbie and just feel energized after reading this!
  • Jackson, NJ · Member since 2017 · 7 posts · 3 votes
    7y

    very inspiring!!  I am currently where you were years ago

  • Multifamily Syndicator · Houston, TX · Member since 2018 · 188 posts · 192 votes
    7y
    @Skylar Dejesus Congrats! As a beginning REI myself, reading these stories is motivational! Thanks for inspiring me and others to get started. Looking forward to hearing how your portfolio grows.
  • Landlord · Worcester, MA · Member since 2015 · 2 posts · 1 vote
    7y

    I bought my first multi 6 months after i graduated, strictly to help pay student loans. It did well for me, and ive bought and sold 2 additional ones since then. I currently only hold one multi. It was also a "passive income" maker for me, as I've always said I never wanted to be a landlord full time.

    I recently started a new job with a fresh MBA degree ( corp paid), and in the process of purchasing a reno to then add to the portfolio after rehab. I think this will be my jumping block to start this almost semi full time, but I'm still not 100% there yet.

    Any thoughts from anyone who has been in this situation? Im currently making 120K+ on my 9-5 ( flexible 9 to 5 BTW) and just wondering if its better to do the real estate full time. I have amounted a great list of lenders, contractors and realtors in the past 5 years, so im not starting from scratch so to speak. it also helps that I'm handy and have licence professionals in my family

  • Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
    7y

    @Skylar Dejesus

    I love this story. You just never know who will end up in your life and completely change it. In this instance someone you hated, first impression kind of thing. But now he is your business partner and things are going so well. We must always try to withhold our judgments and give everyone a chance to show us who they really are, or we may just miss out on a million dollar opportunity. 

  • Specialist · Dayton, OH · Member since 2018 · 59 posts · 41 votes
    7y
    @Alice Lau you need to go to meet ups and find a broker who specializes in Multifamily. Deals online mean that the brokers TOP players passed and you probably should too. Most deals are off market and possibly the owner hadn’ even thought about selling. GOOD LUCK
  • Member since 2018 · 12 posts · 4 votes
    7y

    Very inspiring.  Congratulations. 

  • Bloomington, IN · Member since 2017 · 12 posts · 3 votes
    7y

    Congrats on your accomplishments! Please keep us posted on further developments and new deals!

  • Real Estate Agent · Tampa, FL · Member since 2016 · 19 posts · 6 votes
    7y
    Originally posted by @Christopher John:

    I bought my first multi 6 months after i graduated, strictly to help pay student loans. It did well for me, and ive bought and sold 2 additional ones since then. I currently only hold one multi. It was also a "passive income" maker for me, as I've always said I never wanted to be a landlord full time.

    I recently started a new job with a fresh MBA degree ( corp paid), and in the process of purchasing a reno to then add to the portfolio after rehab. I think this will be my jumping block to start this almost semi full time, but I'm still not 100% there yet.

    Any thoughts from anyone who has been in this situation? Im currently making 120K+ on my 9-5 ( flexible 9 to 5 BTW) and just wondering if its better to do the real estate full time. I have amounted a great list of lenders, contractors and realtors in the past 5 years, so im not starting from scratch so to speak. it also helps that I'm handy and have licence professionals in my family

    That’s a tough call for someone to make for you. I feel that’s something only you can answer as we don’t know your situation. 

    I will share what we did and maybe that will help. My wife and I sat down and calculated our “freedom” number. Ours is roughly $6k/month. When we reach this number she can stop working.

    My goal is $10k/month for BOTH to stop working. Our only major debt is primary mortgage. Virtually zero extra debt. 

    Currently buy 1 duplex/yr. bought 1 every year for the last three. Next year my goal is a 4 unit. Rinse and repeat. ;)

    This is my advice...if you can make it work do it! Good luck!!!

  • Mehdi KhachaniBusiness Member
    Property Manager · Miami, FL · Member since 2016 · 40 posts · 16 votes
    7y

    Nice work!!! Well done. 

  • Landlord · Worcester, MA · Member since 2015 · 2 posts · 1 vote
    7y
    Originally posted by @Carlos C.:
    Originally posted by @Christopher John:

    I bought my first multi 6 months after i graduated, strictly to help pay student loans. It did well for me, and ive bought and sold 2 additional ones since then. I currently only hold one multi. It was also a "passive income" maker for me, as I've always said I never wanted to be a landlord full time.

    I recently started a new job with a fresh MBA degree ( corp paid), and in the process of purchasing a reno to then add to the portfolio after rehab. I think this will be my jumping block to start this almost semi full time, but I'm still not 100% there yet.

    Any thoughts from anyone who has been in this situation? Im currently making 120K+ on my 9-5 ( flexible 9 to 5 BTW) and just wondering if its better to do the real estate full time. I have amounted a great list of lenders, contractors and realtors in the past 5 years, so im not starting from scratch so to speak. it also helps that I'm handy and have licence professionals in my family

    That’s a tough call for someone to make for you. I feel that’s something only you can answer as we don’t know your situation. 

    I will share what we did and maybe that will help. My wife and I sat down and calculated our “freedom” number. Ours is roughly $6k/month. When we reach this number she can stop working.

    My goal is $10k/month for BOTH to stop working. Our only major debt is primary mortgage. Virtually zero extra debt. 

    Currently buy 1 duplex/yr. bought 1 every year for the last three. Next year my goal is a 4 unit. Rinse and repeat. ;)

    This is my advice...if you can make it work do it! Good luck!!!

    Agree, its is a hard decision for someone to make! Nice to hear your only debt is mortgage! My wife and I need to set a goal similar to you, but we've been to conditioned to work for a company, daily. Its hard breaking out of that! I think if our RE can take care of what she makes annually ( shes a teacher, so not too much ) she can stay home and passively manage tenants. 

    Good plan on the rolling purchase. Quick question, are you doing this by using equity in properties or actually putting up the 25%?

  • Chris HosierPro Member
    Real Estate Broker · Fort Smith, AR · Member since 2016 · 31 posts · 8 votes
    7y

    Congratulations! Great story!

  • Investor · Cardiff by the Sea & Baja CA · Member since 2018 · 18 posts · 5 votes
    7y

    Good story!   I have a few doors myself in SoCal and recently jumped across the border to develop in Tijuana, Baja, MX when cap rates squeezed to 3 in San Diego (they're finally increasing now, unfortunately due to interest rates).  Alternatively, TJ will achieve cash on cash returns 6x greater, construction time 6x shorter, no property tax, and I won't even get into the overall tax benefits here and potential for arbitrage.  

    That being said, I digress... My brotha' rented out his house in our town of Encinitas, CA (the best beach town on the planet mind you) with 180 degree ocean views.  He purchased 50 acres and moved his himself to Crossville, TN to clear roads and build a campground with huge Caterpillar and Kubota toys (gotta admit, the Kubota surprised me). 

    In other words, I've been meaning to get out there, play with the toys, and experience TN myself.  

    If you want to put some deals together in TN, let me know.  I sold my last duplex at >400k/door and t

    he last deal I reviewed here in La Costa, CA was 500k per door, so I'm beyond intrigued when I see <30k/door.

    KM

  • Real Estate Agent · Tampa, FL · Member since 2016 · 19 posts · 6 votes
    7y
    Originally posted by @Christopher John:
    Originally posted by @Carlos C.:
    Originally posted by @Christopher John:

    I bought my first multi 6 months after i graduated, strictly to help pay student loans. It did well for me, and ive bought and sold 2 additional ones since then. I currently only hold one multi. It was also a "passive income" maker for me, as I've always said I never wanted to be a landlord full time.

    I recently started a new job with a fresh MBA degree ( corp paid), and in the process of purchasing a reno to then add to the portfolio after rehab. I think this will be my jumping block to start this almost semi full time, but I'm still not 100% there yet.

    Any thoughts from anyone who has been in this situation? Im currently making 120K+ on my 9-5 ( flexible 9 to 5 BTW) and just wondering if its better to do the real estate full time. I have amounted a great list of lenders, contractors and realtors in the past 5 years, so im not starting from scratch so to speak. it also helps that I'm handy and have licence professionals in my family

    That’s a tough call for someone to make for you. I feel that’s something only you can answer as we don’t know your situation. 

    I will share what we did and maybe that will help. My wife and I sat down and calculated our “freedom” number. Ours is roughly $6k/month. When we reach this number she can stop working.

    My goal is $10k/month for BOTH to stop working. Our only major debt is primary mortgage. Virtually zero extra debt. 

    Currently buy 1 duplex/yr. bought 1 every year for the last three. Next year my goal is a 4 unit. Rinse and repeat. ;)

    This is my advice...if you can make it work do it! Good luck!!!

    Agree, its is a hard decision for someone to make! Nice to hear your only debt is mortgage! My wife and I need to set a goal similar to you, but we've been to conditioned to work for a company, daily. Its hard breaking out of that! I think if our RE can take care of what she makes annually ( shes a teacher, so not too much ) she can stay home and passively manage tenants. 

    Good plan on the rolling purchase. Quick question, are you doing this by using equity in properties or actually putting up the 25%?

    Our first one we liquidated our 401k, overpayed in down payment. Could have bought two. But oh well...

    We purchased the second from cash out refi from first.

    The third we used money from heloc and from first.

    We now have enough income from three that they are close to buying themselves. 

    Next year we will be rehabbing one and replacing roof on another. We are saving for that. 

    Our down payments are 20%.

    I agree! We are conditioned to think we need a 9-5. Read or listen to podcasts on REI. Or financial independence. We have to reprogram our way of thinking. We were not meant to sit in a cube.

    I am still working on reprogramming my brain to think differently. It’s hard but it’s working and I feel it and see the results!

  • Flipper/Rehabber · Charlotte, NC · Member since 2018 · 37 posts · 7 votes
    7y
    @Skylar Dejesus this was really inspring to read. I’m just now starting out in real estate and I hope to be that successful one day. Thank you!
  • Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    7y

    There is a saying that people overestimate what they can do in one year, but underestimate what they can do in 10.


    Well done dude.  Wait until year 10.  You'll own 1000

  • Rental Property Investor · Morris County, NJ · Member since 2018 · 8 posts · 8 votes
    7y
    Originally posted by @Earl Hatmaker:
    @Alice Lau you need to go to meet ups and find a broker who specializes in Multifamily. Deals online mean that the brokers TOP players passed and you probably should too.

    Most deals are off market and possibly the owner hadn’ even thought about selling.

    GOOD LUCK

     just joined my first biggerPockets meetup in New Brunswick, NJ. hopefully that will get me started! thanks!!

  • John FedroPro Member
    Investor · Austin, TX · Member since 2009 · 410 posts · 295 votes
    7y

    Great story Skylar! Great name too. I have no doubt that these stories are just the tip of the iceberg. You have likely gone through a tremendous amount of struggles and lessons to get to the point where you are. Keep up the great work moving forward! There is much more to come. All the best.

  • Real Estate Agent · Renton, WA · Member since 2017 · 204 posts · 151 votes
    7y

    What an amazing story @Skylar Dejesus thanks for sharing, it's stories like this that inspires others here at BP to take action and follow their dreams in real estate. As it is my intentions to own an apartment complex myself.  Keep up the good work.

  • Shawnee Mission, KS · Member since 2018 · 13 posts · 5 votes
    7y

    What an awesome story! Thanks for sharing. 

  • Flipper / Landlord · Tyler, TX · Member since 2016 · 255 posts · 126 votes
    7y

    How can you possibly get these high dollar loans? Especially with someone with no trach record ?

  • Specialist · Santa Barbara, CA · Member since 2017 · 38 posts · 21 votes
    7y

    Congrats on the success! I need to pick up a copy of Rich Dad Poor Dad.

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