All Forum Posts by: Michael Swan

Hi @Jay Hinrichs,

Don’t get me wrong here.  It was really painful to cut my losses and move on from those first two.  One I went 2 years and the other 2.5 years.  That was me, my wife, and my Mom and Dad’s life savings.

The most W2 earnings my wife and I have ever made was $80,000 before one year total family income.  That was a HUGE expensive lesson!! We are in the process of last stage of repositioning 2 complexes, the middle of repositioning 6 others and just buying these two complexes.

I manage the heck out of my property managers etc...  I went through workshops and training too, along with following David Lindahl’s Multifamily Millions for repositioning Value deals.  This is not passive!! You need to be on top of everything or it can get away from you in a hurry!!

Swanny

Hi @Jay Hinrichs,

It is a big risk if you have never owned Apartment Complexes going into a new market, without a proven team that has already been there and done that in that market.

There are sooooooo many pitfalls or landmines to unsuspectingly walk on.  I was in the beginning just figuring, trading in a San Diego Condo I purchased in 2011 for $100,000 making $5,000 cash flow per year for a $12,000 cash flowing Apartment complex and doing the same on another.

Chasing yield I thought would be safer than value. Boy was I wrong. Luckily, I kept learning and researching and fine tuning my approach for Value instead and finding the right team members, through painful trial and error and am now seeing incredible increase in NOI, cash flow, and appreciation. The two deals right now are $2,000,000 for 57 units in a nice area called Mentor, Ohio and a few minutes east of that a 24 unit at $762,500 in Painesville, Ohio.

So, fast forward from May of 2015 that 10 unit on Noble Rd. In Cleveland Heights to now 10 apartment complexes and 200 units.  Those first two losses were very expensive ($350,000) losses.  

Just remember, buyer beware.  ONLY talk to other owner’s that have invested there.  Make sure you can raise rents at least $100-$150.00 per unit in a 2-3 year period.  There has to be huge upside in rents.  Hopefully, not too much crazy rehab to do so.  Charge $25-$30 pet rent, per pet, two pets max, plus a security deposit for the pets too.  Start charging water/sewer fees at least $20.00 a month for water/sewer 1br units and at least $30.00 per month water sewer fees for 2br units.  Plus, replace all toilets with time.  Outstanding product by Niagara - Stealth elongated bowl.  Tenants love it!! .80 gallons per flush.  Niagara Massager shower head.  Again Tenants love it 1.7 gpm.  Tamper proof aerators on the bathroom sink .50 gpm and tamper proof aerators in kitchen sink 1.5 gpm.  Plus, charge waster/sewer fees and watch expenses drop dramatically.  LED lighting too throughout the complex.

Your PM has a job to save you money and increase the money coming in every month.  In Lake County for your basic 800-900 sf 2br we get $750.00 rent and when you add those other charges, we are about $800.00 a month.  We buy these things for between $30,000-$36,000 a unit now.  The entry rents when we purchase are about $600.00 to $650.00 a unit for the 2br and $475-525 for the 1br units. The 1br after we take over go to at least $650.00 a month.  

In Mentor we will be able to easily get $795-$850 for the 2br and $695-$750 for the 1br.

I keep hearing about the prices people are paying per unit for other places and their rents are soooo much lower than what I am getting.  It seems they are chasing yield in places like Lakewood etc..

Again, buyer beware!! Go in on your first few deals with seasoned investors.  Too many landmines or pitfalls to step on doing it alone.  A lot of fake news out there people.

Message me to talk more.

Swanny 

Hi @Jad Boudiab,

I am closing on a 24 unit in Painesville and a 57 unit in Mentor soon.  I sold my Shaker Heights 8 unit on the corner of Almar and Warrensville Center Rd. 3255 Warrensville Center Rd.  and my Cleveland Heights 10 unit at 2435 Noble Rd.  Those two, I overpaid and thought I was buying yield deals.  Not the case.  Those were my first two 1031 Exchange deals and cut my losses and moved on.

Those two were money pits.  I now am focused on value plays in Lake County.  You live and you learn!!  

I will be a principal in 200 units primarily in Lake County, Ohio.  I also have a 12 unit doing really well at 24600 Euclid Ave. in Euclid near brand new Amazon Fulfillment Center and a 24 unit in Akron doing very well too.

Feel free to reach out to me anytime.

Swanny 

I am in Olena!!

Swanny

I love the NE Euclid area and Lake County in general.

Swanny

Hi Jared, 

Reach out to me and I will help you.  I can’t wait to help you.

Swanny

Another good point @Sergio Altomare is that I sign on every loan.  The smaller deals are recourse loans and I sign for them and ALL my  assets are on the line if something goes wrong.  The larger deals are Freddie type loans and those are non-recourse loans.   I still sign on those too.   It gets real really fast when you take in money from others.  Personally, all my deals follow David Lindahl's Multifamily Millions book for repositioning Value plays.  

I figure why reinvent the wheel when David Lindahl (at one time a landscaper) could do this, so could I as a lowly paid teacher in a parochial school.  The most I ever made as a teacher, also as an adjunct professor at a community college too at the same time, working about 60 hours a week, with a Masters and 8 years of education was $60,000 and my wife as a special Ed. aid in the classroom made $20,000 max or $80,000 combined family income.  

If I could do this and David Lindahl could do this, so could I.  Now I have approaching 10 apartment complexes and 4 or 5 of those are with my money and others that wanted to go in on my deals.  Everyone in my deals needs to read David Lindahl's Multifamily Millions book too.  I am living pages 47-130 in the hard cover everyday.  There are sooooooooooo many golden nuggets for repositioning apartment complexes in that book.  I highly recommend that book.  I don't belong to David Lindahl's program at all.  That book is the bible I follow and keep it right next to my chair at home and look up things weekly in that book.  

NO I am not a rep of his company etc.... I just really get the concepts in that book.

Swanny

Hi  Victor I have about 175 units in Lake County and Euclid.  I am not a broker and just an investor.  

Swanny

Hi Dan,

Feel free to reach out to me and message me.  I was on Podcast 238 and did just that what you are wanting to do.  That was in 2015 and now I am approaching 10 apartment complexes and approximately 200 units in totality.  If I can do this then you can do it too.

This is right up my alley.

Swanny

Hi again all,

Integrity, honesty, and guarding your money with your life is the kind of person you want to invest with.  The people that invest with me @Account Closed on this past week's podcast gave me a shout out saying at the beginning of the podcast that Podcast 238  is at the top of the list on most listened too EVER!! Thank you Brandon!!!! It aired in 2017 and people constantly contact me and tell me they could really relate to what I was saying.  I have been educating and leaving my phones open most days from 3:15-6:15 PST. I live in San Diego.  since, 2017 when Podcast 238 first aired.  

There are many people, I can't count how many I have helped, since 2017 when podcast 238 aired.  How do you get people to invest in your deals?  Help as many people as you can, without expecting anything in return and it will come back to you big time!!

That phone line is always open if anyone wants advice.  Message me and that is another way I could help you too.  I am a teacher at heart and will always be.

Swanny