Sprinting a Marathon: Overseas REI from 4-22 units in 15 months

[Christopher G.]

Servus aus Bayern!  Hello from Bavaria! (I'm actually writing this from Poland but live in Bavaria)

I'd like to share my REI story as it's been a wild ride and I know a lot of you out there are just getting started and wondering how to do it long-distance. I'm a recent Army veteran and so between 2006-2013 my wife and I bought 4 properties and flipped three houses in NC, GA and TN. Then kids, career, and family life took priority between 2013 and 2017. Actually, my plan was very loose, retire from the Army in 2022 then flip a few houses and buy a few rentals which would make me FI enough to not have to work a 9 to 5. While living in Germany, that plan all changed, as I found myself leaving the Army in early 2019. From August 2018 - October 2019, I have grown my portfolio from 4-22 units, hired an amazing broker / PM (never met her in person or seen any of these new properties in person), did a BRRRR, used some retirement IRA money to invest in a syndication deal. I'm currently working to REFI a few properties so that I can continue to purchase more properties. My ultimate goal is between 35-40 properties hopefully within the next two years.

In mid-2018, I decided I couldn't wait, I had to buy rentals ASAP as I wasn't sure when I'd be leaving the Army, but I figured I had about six months left. I knew I wanted to use the Buy and Hold strategy towards FI. By this time, my family and I had been living in Germany since 2016 and we wanted to stay in Europe, no desire to return to the States. I started educating myself; Rich Dad Poor Dad, Long Distance Real Estate Investing, …. and many more. My four properties all had property managers and were all located around Army bases, Fort Campbell, Fort Bragg, and Fort Stewart. I knew the Fort Bragg (Fayetteville) area the best so I decided to contact my PM there and see if she was interested in purchasing properties for me, helping me fix them up, then managing them. Of course she was at first…however I soon saw that she didn't really understand what I was trying to do and lacked the drive and certainly didn't feel the time pressure that I was under to find and buy income producing rentals. We took 3 months to find a SFH and when I was on vacation in Seville, instead of working through how to get an earnest deposit to the seller within 24 hours or the deal was over, she told me we should just walk from the deal! Needless to say, I pressed her to figure it out and we closed on property #5 in Aug 2018.

It was then that I got on BP, researched my current PM’s company, and connected with a few people that also used this PM company and they all told me to run (I’ve used them since 2006, still do, and had minimal trouble but I knew this broker wasn’t going to get me to my goals).

Finding the perfect Broker and Property Manager

Back in Germany, I knew I needed to find a broker who also did property management. I didn’t want to split those key functions up between two companies. A quick Google search and after reading some reviews, I reached out to a PM company. The owner called me back within an hour on a Saturday, something that my previous PM refused to do! Within minutes I knew this lady knew her business. She knew the area, was a fellow investor, knew all the key players; contractors, lawyers, title companies etc. I was sold. Best decision I made on this journey. I can’t take credit, mostly dumb luck.

Not enough space to go into all the details but we closed on a duplex in November 2018 (units 6-7), a SFH in November 2018 (unit 8), a 3 duplex deal in February 2019 (units 9-14), two separate duplex deals in August 2019 (units 15-18), and a 2 townhouse buildings (4 units) deal closed in October 2019 (units 19-22). After this run, I decided, or it was decided for me, that I need to pause from purchasing and investing in stabilizing the properties.

All of my properties were either purchased using conventional financing or cash. My dad setup a mutual fund account for me when I was 16 with money that I had saved from birthdays and working; I've added to it ever since. This was the source for all my down payments and repairs. All properties have between 8-18% ROI.

Most of my properties are in C- to B areas, more C than B. I must admit, a few of them I was just excited to get accepted offers, probably should have done more due diligence on the area and read the home inspection report a bit closer. I was, and still am, in the acquisition phase so I knew that many of the properties would need updating and that in a few years they would all be stabilized with increased rents. That’s where I’m at now, a few properties are currently having tenant turnover, these are tenants that I inherited with the properties, most have been a pain and probably why the properties were sold at a discount! Glad to get rid of them but fixing what they left behind isn’t cheap.

I still consider myself a newbie, most of my recent success is because I have an amazing property manager who is an expert in this business. I don’t use any rental income for personal expenses, every dime goes back into paying for inherited, though needed, repairs, and saving for the next down payment. I’ve made mistakes along the way, learned a ton, and am putting systems in place to better automate my business and gain more time to spend with my family and enjoying Europe.

Doing this all from overseas has some obvious challenges. I can’t drive around and check out neighborhoods and potential units. I’m reliant on online real estate websites for research and when my very busy PM can visit a property instead of just going myself. There are no RE meetups here. I don’t get to meet and discuss my expectations with a contractor face-to-face, though my PM probably does a better job than I would do.

Here are some tips that I’d highly recommend for starters or those who are on their way but still a newbie like me:

1. Find a broker who is also going to manager your properties. If you don’t do this, your broker will help you buy anything if they aren’t managing it…A broker / PM is going to make sure that you don’t get yourself into trouble as it is only going to mean more work for them.
2. Separate your personal and RE checking accounts. Obvious I know. I did that since 2006 but it wasn’t until Dec 2017 that I had my CPA teach me how to setup and use QuickBooks Online.
3. Hire a Virtual Assistant. I couldn't keep up with so many transactions and I had a feeling I might not always be recording in QB the right way. I hired a VA from the Philippines and he did within a week what was taking me months. I gained sooo much time back and for a very inexpensive price.
4. Make a digital library of all your files. I’m going through a REFI now and the bank is asking for everything except my recent COVID test (negative).

If you are still reading, thanks for not getting distracted and pressing through! Kind of hard to condense 15 months into 2 pages so if you have any questions, ask away. I’m currently in Poland for work so excuse the delay. Thanks, and happy purchasing!

Chris