From teacher to 10 units in 10 months!

From teacher to 10 units in 10 months!

Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes

I’m so excited because I just closed on my 10th out of state unit today! I did my first deal ever exactly 10 months ago, thanks to the Bigger Pockets podcast, a lot of library books and a lot of good people. Before this I was an environmental education teacher for over a decade, and last year I got hooked when my friend had me listen to the podcast. So when yet another grant-funded position ended earlier this year, I chose to take a break from full time work and focus on RE instead...and it’s been so amazing!!

On my break I took classes in construction management and spent a lot of time going to meetups. Now I’m working as a project manager for a GC to get real world experience (building a ground up affordable housing development in LA), and I’m getting my real estate license. I also donate 1% of all gross revenue (not just profits) from real estate investments to affordable housing and community development, and am partnering with other investors to create a social equity financial model for our rental properties. More on that when I set up the blog. 

So my commitment to social justice hasn’t gone away, it’s just transformed into this new field (new to me) of real estate investing. I’m also really passionate about my non-profit colleagues finding their way to financial freedom as well. (If you can only read one book, read Your Money or Your Life). So far I’ve got 4 houses and 3 duplexes with none of my own cash invested except the first deal, and my goal is to be at 30 units with at least $60,000/year of net cash flow within the next 3 years.

My wife loves me AND is sick of me talking real estate all the time lol so if people ever want to catch up and talk RE I’m in! Some other folks in LA like @John Koster and @Shiva Bhaskar and I like to connect on out of state investing over beers every couple of months, and a new thing we’re talking about too is Opportunity Zones.

So anyway, I haven’t really shared too much of my story here and I just wanted to spread some inspiration for other go getters and life changers on the forums. 

As @Alexander Felice says, I think you’ve got to be a little obsessed. And take action! Thanks for all those who have supported me so far and to many more!

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Real Estate Agent · Washington, DC · Member since 2017 · 10 posts · 52 votes
7y

Amazing! You have accomplished so much in just 10mths. Congratulations!! Mind sharing how you funded and structured your first deal/rental purchase and how you were able to scale so quickly?

See this reply in the discussion

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  • Investor · Nutley, NJ · Member since 2017 · 72 posts · 56 votes
    6y

    ty!

  • Rental Property Investor · Los Angeles, CA · Member since 2018 · 68 posts · 34 votes
    6y

    @Sammy Lyon  Congrats!  Way to go!  I hope to meet up with you again.  I met you at a local meet up near USC I think it was.  

    Let's connect again!

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Marco Lopez:

    That's awesome. I'm an Estimator, previously a PM, for a Commercial Specialty Sub in the LA area and do residential on the side. Let's grab some beers!

    Hey Marco, that sounds great!

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Doug Peters:

    @Sammy Lyon  Congrats!  Way to go!  I hope to meet up with you again.  I met you at a local meet up near USC I think it was.  

    Let's connect again!

    Oh yes the South LA meetup! I love those meetups. Check the events there's a happy hour tonight in Hollywood too.

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Dametrius Clark:

    @Sammy Lyon this is great to hear! I’m a special ed teacher in Cleveland Ohio and I’m also trying to get started with real estate. This is motivating!

    Hey Dametrius - let's meet up next time I'm in Cleveland!!

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Renat S.:

    @Sammy Lyon

    You are super enthusiastic, lets see the numbers. 10 units in 10 months and you only put down for first property? That sounds too good. Let’s see the numbers and details.

    Hi Renat, challenge accepted ;)

    Deal #1: SFR. 20% down traditional financing. Invested $14,000.

    Deal #2: SFR. JV partnership. Partner brought purchase price and renovation costs as capital contribution. My job is to do everything else, we split ownership & all operating expenses and income 50/50. Partner’s capital contribution is prioritized at sale or refinance. On operating expenses since closing I have spent $2,300 (my half of a rent ready, since we had a tenant turnover).

    Deal #3: SFR. Hard money lender for purchase. Minimal repairs ~$1,000 at closing.

    Deal #4: SFR. Private lender for purchase. Loan was for higher than the purchase price and is not secured only to this property, so I have been able to use some of the funds to make the repairs on deals #3 and #5.

    Deal #5: Duplex. Hard money lender for purchase. Have an unexpected rent ready due to a tenant turnover after closing, so using private money for renovations and some of my reserve fund. Will refinance at higher ARV so expecting to get it back but I may end up investing ~$5,000 on the rent ready for about 30 days until the refinance closes.

    Deal #6: Duplex. JV partnership. We reinvested the funds from our BRRR cash out refinance (Deal #2). This will be another BRRR.

    Deal #7: Duplex. Private lender for purchase and renovations. May end up using $3,000 of my own money for going a little on the higher end of my renovation budget due to an unforeseen issue, so I’ll be going over the borrowed amount. I expect to get this back soon in the refinance since I’m doing a big reno on this one. 

    So my own money has come into play twice, both times when I closed on a property and the existing tenant moved out soon after closing. Using “none” of my own money for purchases and for most of the renovations is how I have kept healthy reserves for each property, which can tide me over on a tenant turnover to make repairs until I refinance. All in all it would add up to ~$9,000 of repairs for the 9 units after the first deal, and total $23,000 for all 10 units. Except for the $14,000 from the first deal, I expect to get back most or all of the repair costs since they are BRRRs. Stay tuned for the refinances though.

    I consider those "unexpected" expenses part of the normal operating expenses of a property, that are to be expected, rather than initial capital contributions for purchase and renovations. The rent readies did end up helping get me the higher appraised value too, making it easier to recoup the funds quickly through the refinance. I had budgeted for the repairs in my Capex and maintenance reserves—I just wasn't expecting to use them so soon! I don't advocate for people to buy property with no money in their reserves account, personally.

    It definitely makes me want to buy more vacant properties so I can just do the repairs right when we close rather than wait around to figure out the tenant is leaving! But I guess it’s part of the stabilization process when buying a property with inherited tenants… That is one thing I am having to get used to—the slower-than-I’d-like post-closing process to get the property up and running smoothly. I have found I enjoy the deal hunt more than the asset management.. and I am definitely learning as I go!!

  • Rental Property Investor · Newport Beach, CA · Member since 2018 · 44 posts · 22 votes
    6y

    @Christine Myers Sorry just seeing this! St. Petersburg! Let me know if you have any other questions!

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Candace O.:

    I work as an emergency substitute teacher and have considered getting my teaching license, but would rather do real estate.  This year I have partnered on a flip, bought a single family home out of state and started house hacking by renting out a room in my house.  I would like to know where you took courses in construction management as I hope to be more involved in flipping in the future.  Also interested in the details of how you did so many deals so fast.  TIA

    Hi Candis! Tried to tag you, see the latest post for the answer to your question on details!

    Construction Management was Cal State University Dominguez Hills 6 month certificate program: https://csudh.edu/ceie/construction/courses

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @John Dwyer:

    How did you finance 10 units in 10 months? I mean great, just curious. 

    Hey John! Just posted that at the end of the thread for you :)

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @George Eskander:

    Great post! @sammylyon can you elaborate more on construction management and how you fund and get your deals? Thanks!

     Hi George! I took 8 classes for a certificate program, scheduling, bidding, accounting, field project management, plan reading, safety, etc: https://csudh.edu/ceie/construction/courses

    And posted about funding at the end of the thread (page 8 lol)

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Allen C Herring:

    @Sammy Lyon Great story Sammy! Where did you find you’re deals and what type of financing did you use to get to your 10 units?

    Hi Allen! posted details on financing at the end of the thread (page 8) to answer your question!!

  • Real Estate Agent · Cleveland, OH (cleveland oh) · Member since 2019 · 19 posts · 5 votes
    6y

    @Sammy Lyon For sure! Let me know next time you're in the city.

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Account Closed:

    @Sammy Lyon can you help me and my husband in the steps

    Hi Lanora! What have you researched so far?

  • Louisville, KY · Member since 2019 · 13 posts · 10 votes
    6y
    @Sammy Lyon

    Deal #7: Duplex. Private lender for purchase and renovations. May end up using $3,000 of my own money for going a little on the higher end of my renovation budget due to an unforeseen issue, so I’ll be going over the borrowed amount. I expect to get this back soon in the refinance since I’m doing a big reno on this one. 

    So my own money has come into play twice, both times when I closed on a property and the existing tenant moved out soon after closing. Using “none” of my own money for purchases and for most of the renovations is how I have kept healthy reserves for each property, which can tide me over on a tenant turnover to make repairs until I refinance. All in all it would add up to ~$9,000 of repairs for the 9 units after the first deal, and total $23,000 for all 10 units. Except for the $14,000 from the first deal, I expect to get back most or all of the repair costs since they are BRRRs. Stay tuned for the refinances though.

    Hello!

    Thank you so much for your story! My wife and I are teachers as well. I'm still having trouble understanding one part of your story, however. Would you kindly help me understand?

    You refer to "your own money" a couple times. Is this the traditional income from your teaching job? Or something else entirely?

    Thank you so much!
     

  • Rental Property Investor · Orangeburg, SC · Member since 2019 · 73 posts · 16 votes
    6y

    @Sammy Lyon this is perfect, just what I wanted to read before bed. Cant wait to do my first deal.

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Shonari Wynter:

    @Sammy Lyon this is perfect, just what I wanted to read before bed. Cant wait to do my first deal.

    Awesome Shonari!! 

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Account Closed:

    @Sammy Lyon how to start real estate with little to no money ...

    Network like a maniac and tell everyone you’re doing real estate. Do a deal with your money first. You can do real estate with “no” money but I wouldn’t recommend HAVING no money. Read @Brandon Turner’s book on low and no money down investing. :) 

  • Member since 2019 · 5 posts · 1 vote
    6y

    Amazing story! I'm currently in the midst of deciding whether I want to take a break from work because I'm burned out and can't stop thinking about REI. Can I ask how you found a project manager role for a GC? I want to get more experience in real estate and was thinking that my project management skill set would likely apply best if I were to pivot industries.

  • Member since 2019 · 13 posts · 5 votes
    6y

    I would love to connect with you and your friends and talk shop.  I also have several properties I have purchased being out of state and looking to do about the same plan your on.  I live in the Los Angeles area for now.

  • Member since 2019 · 4 posts · 0 votes
    6y

    Congrats on a great scale and growth. We are experiencing great feedback and results as well with our homesofheroes.com platform. Very rewarding mission and calling. God Bless

  • Rental Property Investor · Ewing, NJ · Member since 2018 · 23 posts · 15 votes
    6y

    Good work ! Keep it up pal 

  • Investor · Nashville, TN · Member since 2019 · 40 posts · 25 votes
    6y

    @Sammy Lyon Thanks for sharing your story! I am a new inspiring investor and I love to hear how people got started. 

    I am curious, what made you decide to invest out of state? I ask because I currently live in Atlanta (where I was raised), but my heart lies in Denver (where I lived for a year after college). I dream of a multi family property there and would like to house hack the property to start. Any advice for someone interested in looking out of state? I know there are resources and books to help with this topic as well, but always nice to hear from personal experience. 

    Thanks and best of luck! 

  • Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
    6y
    Originally posted by @Charlene Fetzer:

    @Sammy Lyon Thanks for sharing your story! I am a new inspiring investor and I love to hear how people got started. 

    I am curious, what made you decide to invest out of state? I ask because I currently live in Atlanta (where I was raised), but my heart lies in Denver (where I lived for a year after college). I dream of a multi family property there and would like to house hack the property to start. Any advice for someone interested in looking out of state? I know there are resources and books to help with this topic as well, but always nice to hear from personal experience. 

    Thanks and best of luck! 

    Hi Charlene! I live in Los Angeles and the buy and hold cash flow strategy doesn't work very well here (at this point in the market). Other strategies like flipping and redeveloping do work in LA but that's not where I wanted to start. Also BRRR does work here but the numbers are much larger than I felt I could risk.

    Out of state investing got me closer to my goals which is passive income cash flow. I would say talk to as many folks as you can on BP who have invested there and work in RE there and go fly out and meet them! 

  • Member since 2019 · 5 posts · 1 vote
    6y

    @Sammy Lyon forgot to tag you in my first response... reposting now. 

    Amazing story! I'm currently in the midst of deciding whether I want to take a break from work because I'm burned out and can't stop thinking about REI. Can I ask how you found a project manager role for a GC? I want to get more experience in real estate and was thinking that my project management skill set would likely apply best if I were to pivot industries.

  • Investor · Naples, FL · Member since 2016 · 256 posts · 75 votes
    6y

    @Sammy Lyon well done!

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