30 property portfolio & 45 property porfolio

[Jordan Murrell]

About one year ago I moved to Las Vegas to play professional soccer. Last March our season began and ended due to COVID 19. At first, sitting at home and staying safe was great. Then I realized I was at the mercy of someone else. I worked for someone else and they could cut all income for me and my wife at any time. The fact is, I was disposable. Now, you may be thinking... You play professional soccer. You get paid millions. No. Not the case at all. Typical wages range about $0-$3000 a month for 10 month long contract.

The second week of March I was looking for a way to create income. I read “Rich Dad Poor Dad” and I realized I was looking at it all wrong. A mindset shift. Speaking to others about my new thought process, my old coach introduced me to BiggerPockets. From that moment on, I was hooked. I listened to all the podcasts and read all the books I could get my hands on.

It was September. Not going to lie to you, I had analysis paralysis. My girlfriend at the time, now wife approached me and asked “what are you waiting for?!” You need to purchase a property otherwise you never will. Figure it out along the way.

Had some hiccups purchasing my first rental property. Ended up reading David Greens book “Long Distance Real Estate Investing” and saw my next steps. Identified my market (Memphis), put together a team and put in offers for property that fit my criteria.

Fast forward from October. I now have a couple rental properties and managing a flip. My goal for the next 3 months is to acquire 16 properties.

After networking, lead generation and funneling. There are two investors both looking to offload their portfolio here in Las Vegas. One seller has 30 properties and is moving to another continent for family reasons. The other wants to 1031 exchange into larger commercial properties.

The plan would be to acquire 3-7 properties from each investor. Originally my goal was 16 properties this year but one of the podcasts truly inspired me to make my 1 year goal into a 12 week goal aka “The 12 Week Year.”

This seems like a large task so I have started the “Intention Journal” by Brandon Turner.

How would you complete the transaction of 3-7 properties from each investor?

[Todd Rasmussen]

@Jordan Murrell

There is a reason the portfolios are for sale and you purchasing all of them or a large portion is a HUGE convenience to the current owner. Don't underestimate the value you are providing by being willing to assume all of these at once.

Many portfolios are available because aging owner operators have slowly ridden them to the ground. They suck the net proceeds out for personal use and then can't afford a repair or tenant turnover. Then they end up renting to a less desirable tenant, and then they have economic vacancy or more expensive turnovers and the process repeats until they get fed up and sell. That was the case with the portfolio we purchased earlier this year. It can be a hugely profitable opportunity, you just have to go in with your eyes open. Expect lots of tenant turnover and deferred repairs / maintenance if your seller is a tired/fed up owner operator

Keep letting them talk against themselves. Sounds like you are a natural negotiator.

They might be most apprehensive about giving you title on all these properties for low to no money down. If that's the case you can break the portfolio up into a smaller number of properties and buy five now with option to buy so many in a year if all the conditions of your owner's financing are met.

Also make sure you value this deal with the seller using NOI and the cap rate. You can use sales comps to figure your ARV as long as you'd be willing to sell them individually down the road but only talk about this as a commercial investment with your seller. If the portfolio is underperforming you'll build a significant margin into the deal just for that.

Also again, this is a HUGE undertaking. Take a realistic look at what you can/want to be obligated to. Just home inspections is going to cross the 25K mark and that will be spent to decide if you want/can buy them! Partners is a valid solution, but if you need their expertise and money you either have to find dumb money or you'll find yourself diluted to where you'd be better off staying focused on the properties in your market area and tuning your existing business model to make/keep it sustainable.