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0-14 Doors in 16 Months!
I hope this post will help inspire new investors to keep pushing everyday until they reach their goals. I owe a lot of my success to the BP community and I hope to give back as much as I have received!
Three years ago I set a goal to own 20 units within 10 years. I thought it would be next to impossible, I had no clue how I would accomplish so much in such a short time. At first, this seemed like a good way to supplement my 401k and pension for retirement. Now I understand this will continue to be my wealth generation vehicle and key to early retirement.
It took nearly 18 months to find my first deal, it was a duplex that I watched drop in price for 6 months on the MLS. Eventually I was able to purchase this property for 89k, I put 40k into rehabbing it, and I refinanced 41k back out after 10 months. The current appraised value is 140k, and I have 22k invested in the property. Both units rent for 1550/mo and it cash flows 400/mo. I used that 41k cash out refi to buy my second deal.
A 6 family building I purchased for 246k off the MLS. The bank gave me a rehab loan of 25k rolled into my commercial note. I am halfway through the renovation project on this building, my cash flow when completed will be 1400/mo, gross rents are 3700/mo with laundry, ARV will be 320k. I have 50k invested in this building. This lead me into my latest deal.
A tenant of my current building heard that the owners of the building next to mine were looking to sell soon. (Identical 6 family building, but also has 10, 1 car garages in the rear lot.) I reached out to them and negotiated an off market purchase of 265k. The bank is lending a 40k rehab loan into my note. The problem was, I was pretty tight on funds after just purchasing my last property 3 months ago. I was able to show a private lender the numbers on this deal and they were happy to lend me 30k towards the down payment. They would have done the rest, but doing a 401k loan was much better terms, so I did the other 10% from my 401k. This is going to be a zero money out of pocket deal. When the project is completed it will gross 4700/mo with garages/laundry. It will cash flow 1000/mo after paying 100% financing, with no money into it. The ARV is 420k.
If you would have told me 16 months ago I would have 14 of my 20 unit goals completed today, I would have laughed at you. The lessons learned, the connections made, the wealth created in this business has changed my life forever, in a short time period. The BP community has helped me shape who I am as an investor, a real estate agent, and my life in so many countless ways. Thank you to everyone who has been there along my journey to this point, and as I continue in the future to even larger goals!
I would love to hear from other newer investors, and help give back anyway I can, feel free to reach out. Thank you!!!
Special thanks to: @Joshua Dorkin @Brandon Turner @Scott Trench @Mindy Jensen @Joe Fairless (and countless others) for all you have done in shaping my world.
Inspiring post. I will keep this bookmarked for the future. I too have a goal of doors in mind. I still have a ways to go but you have proven that it can come sooner than expected. Thanks for sharing.
That’s awesome! This was an inspiring story man, Im a new investor myself looking for the right opportunity to get my feet wet. I hope to secure at least 3 multi-unit properties within the next 5 years along with my brother who also invests in multi-unit properties.
Great story thank you for sharing. It motivated me to look for deals harder and buy if the numbers work. Don't wait for a perfect scenario. Do you think that more units than better for a first deal? My goal is to purchase 4+ units as a first investment.
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Originally posted by @Marta K.:
Great story thank you for sharing. It motivated me to look for deals harder and buy if the numbers work. Don't wait for a perfect scenario. Do you think that more units than better for a first deal? My goal is to purchase 4+ units as a first investment.
I think a 4 unit is a best way to get started, especially if you are house hacking or living in one unit. It really teaches you how to manage tenants, unlike a single single family. Plus it gets the most utilization of your 30 year fixed mortgages, that you wont be able to get on bigger multifamily deals. I started with a duplex which was fine, in hindsight knowing what I know now, I will only go bigger than 5+ unit buildings from now on, the economies of scale in my market make it a much better investment for my situation.
@Joseph Cornwell
What an inspiring story, thank you for sharing it! After your first investment, do you have any advice on how to avoid getting screwed by a contractor?
Originally posted by @Krishna Chava:
Congrats @Joseph Cornwell. I like the fact that you took you first plunge with a MLS deal that has been on market for 6 months. Most people would assume there is something seriously wrong with it. It takes conviction to believe in your judgment to buy such a first deal and I am glad your conviction paid off nicely.
@Krishna, generally what's wrong with it on MLS is the price. It's one of the top explanations at least.
@Margie Fuller Fact that something is on MLS for long time also means that people probably bargained and seller never came down.
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I quickly learned to never pay a contractor for work until you have inspected it yourself, I paid out for work that he said was done, and it was either not done at all or done incorrectly and he took about 3500 bucks for work he did not complete. I had a very thorough contract and scope of work drafted, and then learned it would cost more to sue him than I would win, and could take months or years. Now I have better contractors who are honest, and I inspect work before releasing funds.
Thank you for replying! Good luck with future deals. I like your tip about net cash flow 200$ per door in order to be considered a good deal.
I'm reading this in tears !!! Thank you for this .I'm going to stay focused and achieve my real estate goals. Good luck 🍀 and much more success.
well done have a few beers and relax for a night!
As someone in the Cincinnati area just getting into REI this was awesome to read—very inspiring. It reminds me that my goals may seem far away, but hard work can make it happen. Thanks for that and good luck in the future!
I smell an awesome BP podcast episode @Joseph Cornwell! Congrats on the success and thanks for sharing your inspiring story. I'll enjoy following your continued success. Best of luck!
congrats! So awesome!
Thank you for sharing! $89k for a duplex is crazy for my area.
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@Andrew K. I hope to be interviewed someday! Hopefully I can add value to the thousands of other podcast listeners as the others have added value in my business!
@Frankie Woods Thank you!
@Alexis S. 89k was a crazy deal for this area as well. The comps at the time were all over 140k, and lately I have seen duplexes in this neighborhood going for 200k!
Congratulations. This is motivational!!!
Congratulations. I wish you continued success and continue aiming higher.
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