How did you get your first 10 rental properties?

How did you get your first 10 rental properties?

Real Estate Consultant · Washington, DC · Member since 2017 · 34 posts · 27 votes

Hey BP Fam, do you remember your first 10 rental properties?

As a newbie REI, I would love to hear more about your experiences starting out. I've set a 10 year goal for myself to acquire 50 rental units. As a shorter term goal, I want to get at least 10 rental units in the next 3 years (maybe a couple of SFHs and a couple of duplexes or 4-plexes). I've heard for new investors many banks require at least 2 years of rental income on your tax returns before they will allow only the rental unit by itself (not your debt-to-income ratio) to qualify for the investment mortgage. (Side note: has anyone been able to get around that 2 year requirement).

I'm looking for some anecdotal evidence on how realistic is my goal of 10 units in 3 years and 50 units in 10 years. Can anyone tell me how long it took for them to get their 10th deal, or 10th unit? Also, what did your first 10 deals or 10 units compose of (ex. Single family homes, duplexes, 4-plexes, larger multifamilies, apartments)?

Additionally, what strategies did you use to finance your first 10? (BRRR, hard money lenders, conventional mortgages, house-hacking, saving for 20-25% down each time, helocs, private equity firms, syndication, private lenders or investors, etc.)

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Investor · IN · Member since 2012 · 263 posts · 168 votes

9y

@Tiana O.- One at a time. Only concentrate on one at a time so you don't get frustrated or discouraged. Alot of newbies get overwhelmed and burnt out since they set lofty goals. When I started out, I didn't have a "number" but as the years went by they accumulated like rabbits. I look back now and say "Wow! How did I do that???"

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Joshua D.
Investor · Columbus, MT · Member since 2013 · 1k+ posts · 1k+ votes
9y
@Remus Phillips
I cannot speak for @Joe Splitrock but I can say that as a guy that has been active on this site for 4 years we see questions like this from newbies asking how to "calculate cash flow?". It seems as if they want answers handed to them on a spoon. And they are not willing to dig for it themselves. In my experience these people NEVER succeed in realestate. It can be very frustrating to see this literally 10 times a day on BP.
Let's just say you hit a hot button there. I seriously hope that your not the kind of guy that will quit and do nothing, go out and prove me wrong.
I do know Joe has a ton of experience and he would not be on here if he did not want to help people. So be willing to listen.
Joe don't be so rude sometimes. ; )
sorry I'm a middle child...
4 Reply
Remus Phillips
Investor · Bowie, MD · Member since 2017 · 47 posts · 8 votes
9y
@Joshua D. thanks. I just think jumping to a conclusion about a person's work ethic based on one question asked is ridiculously presumptuous . As I said, he had no idea who I am, what I have accomplished, my professional or educational background, or even why I asked the question. I could have asked in an attempt to foster future relationships. The response was just rude and offensive. I have overcome many obstacles in life to reach the point where I am now. Real estate investing is not going frustrate me to the point of quitting. I am not sure there is anything that can do that.
I am sure @Joe Splitrock has a ton of experience, but I would just rather not be subjected to rude and offensive posts from people who do not have the decency or respect to communicate without making blanket assumptions. That's just me. Thanks again though and I look forward to growing and learning from members in BP.
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
9y
Originally posted by @Remus Phillips:

@Joe Splitrock not to be rude, but your assumption that just because I thought it easier to ask rather than search myself I must be in over my head is ridiculous and judgmental. You have no idea what I have done, was doing at the time I posted that, what I do for a living---to reach the asinine assumption you have reached. This is the type of thinking that birth prejudices. In the time you have typed these two messages you could have easily gave a quick answer then refer me to where I could get the answer myself. That would have been kind. That would have been friendly. That would have been helpful. But no. What did you do? You revert to assuming the worst--and even more, you revert to posting an offensive post.
You are prejudice against an entire state. I know nothing about you, your sex, race, religion, education, career, etc. Prejudice is an opinion not based on reason or actual experience. My experience is that people who are unwilling to put the effort in will not succeed in real estate.
You could have typed two words in the search box and gotten an answer faster, but instead you posted the question. Try googling the term "house hacking" and you will understand.
I meant no harm and sincerely do hope you use the resources on BP to better yourself and your investing career.
2 Reply
Tavaris Little
Greenville, SC · Member since 2016 · 105 posts · 16 votes
9y
Brandon Brown I'm looking for a duplex now and I'm just curious, did you live in the property for 6 months, 1 year, or 2 years? I'm hearing different things and also my lender told me they won't check to see if I'm living there or not. Want to make sure I do the right thing
1 Reply
David Zheng
Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
9y
@Joe Splitrock
I'm glad you see why I posted my hot topic a couple weeks ago LOL
and I 100% agree with you.
There's a reason why the saying "God helps those who help themselves" has been around for such a long time.
1 Reply
Herman Stevens
Bakersfield, CA · Member since 2015 · 9 posts · 4 votes
9y
As an individual...5 units.
1. Bought an owner occupy single family in 2013 and rented rooms to individuals. Low down conventional loan.
2. Bought an owner occupy 4 unit multifamily building in December 2016. FHA loan.
Partnered with a friend in Q42016.
1. 4 unit building in escrow and closing within one month.
2. 2 unit building in escrow and closing within one month.
3. Offer unofficially accepted on 6 unit building. Will be in escrow soon with 30 day close.
4. Initial proposal sent on a 7 unit building.
I strongly recommend an owner occupy 4 Plex using an FHA loan.
0 Reply
Brandon Brown
Rental Property Investor · Nashville, TN · Member since 2015 · 102 posts · 129 votes
9y
@Tavaris Little I lived there for about 18 months but my lender said I only needed to live there for a year to fulfill the FHA requirement.
A side note: no lender has ever mentioned to me I need 2 years landlord experience to use my rental income to offset my debt ratio. Both lenders I use only require a lease agreement and from that they consider 75% as income.
Hope this helps.
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Tavaris Little
Greenville, SC · Member since 2016 · 105 posts · 16 votes
9y
Brandon Brown after those 18 months did you get another rental property? If so were you able to get another FHA loan for the second property or another type of financing?
0 Reply
Brandon Brown
Rental Property Investor · Nashville, TN · Member since 2015 · 102 posts · 129 votes
9y
No I actually moved out of the country for my job. I plan to get another when I return to the US.
You can only have one FHA loan at a time. To use FHA again I would have to refinance to conventional.
1 Reply
Tavaris Little
Greenville, SC · Member since 2016 · 105 posts · 16 votes
9y
Ok gotcha. Thanks for the help
0 Reply
James MasottiPro Member
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
9y
@Brandon Brown and @Tavaris Little - A quick read that will clarify a bit more I think.
https://www.fha.com/fha_article?id=539
Podcast Guest on Show #312
1 Reply
Tavaris Little
Greenville, SC · Member since 2016 · 105 posts · 16 votes
9y
James Masotti thanks for that link. It did give some clarification
0 Reply
David Sidharta
Rochester, MI · Member since 2017 · 7 posts · 0 votes
9y
@Joe Splitrock Thank you for your pre-judgement. FYI, I am newcomer in US and just joined this BP for a week. There are a lot of things that I learned during the first week, simple things such as BRRRR, house hacking, etc. I saw another post use BP cash flow analysis & I cannot find it... hence I asked the question. Another nice gentleman informed me that this feature is available for pro member. thx
0 Reply
Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
9y
Originally posted by @David Sidharta:
@Joe Splitrock Thank you for your pre-judgement. FYI, I am newcomer in US and just joined this BP for a week. There are a lot of things that I learned during the first week, simple things such as BRRRR, house hacking, etc. I saw another post use BP cash flow analysis & I cannot find it... hence I asked the question. Another nice gentleman informed me that this feature is available for pro member. thx
I don't understand your comment. I have never responded to you and I don't even recall ever seeing a post from you. I did direct another person to the tools for calculating deals and you don't need to be a Pro member.
Click on Tools in the menu and select FilePlace: Free Forms & Files. Type cash flow in the search box and there are several spreadsheets available. You can download for free and use it unlimited times. There is a limit to the number of forms you can download in a day/week if you are not a Pro member, so keep that in mind. However, you do NOT need to be a Pro member to get access to these forms, so the nice gentleman misinformed you.
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David Sidharta
Rochester, MI · Member since 2017 · 7 posts · 0 votes
9y
@ Joe Splitrock: seems like i had blurry eyes... reading too many information (but not stucture). Thank you for the info.
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