Trading W-2 for Self Management- 0-92 Units in 16 months!

Trading W-2 for Self Management- 0-92 Units in 16 months!

Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes

I hope to provide an informative account of how I was able to scale to 92 units in 16 months, leave my W-2 job and truly find my passion.

Back Story:

I am 33 years old, I am married with two young (1 and 3) children. My career before REI was as an IT project manager at an insurance company. I currently own 92 multi-family rental units in Omaha Nebraska, mostly with partners and self-manage. The portfolio consists of properties ranging in size from duplexes up to a 24 unit building.

Financing: I received my initial capital through a HELOC on my primary residence. All my properties are traditionally financed with 20-30% down on 15-25 year AMs that balloon between 5-10 years. I have also used hard money and private lenders as well.

What Started my obsession with REI:

I, like many of the individuals on BP was frustrated with the lack of freedom as well as minimal feeling of accomplishments through my 9-5 job. I had always known I wanted to do something entrepreneurial but had no idea what direction to proceed.

Before I go much further I want to highlight some of the effects of beginning your investing career:

  • 1.People will doubt you and think you are crazy. They will say Real Estate is risky, they will say you have a great job, they will ask are you worried about plunging toilets at midnight. Be respectful to these people but do not internalize their words. Soon enough they will see your success and want to emulate your actions.
  • 2.You will have to sacrifice a lot of your fun time. No more lazy Sundays or lunches with your complaining coworkers.. you have work to do.
  • 3.Your sacrifices will affect your family, you will be on your phone more, likely you will now be working your full-time job and investing “job”. This is the harsh reality (at least for me) to get where you want to be. It is vital to surround yourself with a strong support system.
  • 4.You will become very aware of your goals and that most individuals do not have goals further than next week. This is ok, focus on yourself but give conscious effort to help others.

January 1st 2017: off of friends recommendation I picked up “Rich Dad Poor Dad”. I finished the book within two days and immediately realized my idea of wealth building was completely backwards.

In 2017 I had zero debt, a good job and was leveraging my 401k… I have traded that philosophy to acquire large amounts of debt, no 401k or IRA contributions and now have the freedom to control my own financial destiny.

Below are the steps I took to remove myself from my W-2 (and 30 years of working for someone else) and obtain a career as a real estate investor:

Step 1 (Education): Read and listen to as many books and podcasts as possible. Below are the books I have read and/or listened to (real estate and business):

This is the most important step in your journey, you must be constantly educating yourself! If you don’t like to read, listen or educate yourself than unfortunately you will likely not find much success (although I am sure there are those out there that have succeeded without).

Rich Dad Poor Dad, Millionaire Real Estate Investor, Multi- Family Millions (Dave Lindahl), ABC’s of Real Estate Investing, The Book on Rental Property Investing, Hold, The Advanced Guide to Real Estate Investing, The Due Diligence Handbook for Commercial Real Estate, Millionaire Real Estate Agent, The Book on Managing Rental Properties (Brandon Turner), The Emyth Revistited

Crushing It in Apartments and Commercial Real Estate, Emerging Real Estate Markets ,The ABC’s of Property Management, Wheelbarrow Profits, The One Thing, Outliers, Start with Why, David and Goliath, Chasing Excellence, Extreme Ownership, The Compound Effect, The Entrepreneur Roller Coaster, Be Obsessed or Be Average, The 10x Rule, The Obstacle is the Way, Ego is the Enemy, Am I Being Too Subtle, 48 Laws of Power, Atlas Shrugged, Man’s Search For Meaning, Sapiens, Tools of Titans, Four Hour Work Week.

Step 2 (financing): To get a better idea of what I was capable of purchasing, I met with four different lenders and began a relationship to acquire funding. I decided to open a HELOC on my primary residence, this allowed me to have access to capital if I came across an available deal.

***How did I choose the lenders? I choose a larger bank (better rates), two local banks (less restrictions, and one in which I already banked.

Step 3 (network with everyone): During my lunch breaks at work and in between changing diapers I would call/text anyone I knew or didn’t know to discuss real estate. Friends, brokers, lenders, attorneys. Anyone who either had a relationship to investing or was a person I looked up to based on their successes.

Find everyone in your network that is smarter than you and begin networking and explaining your goals. They likely know other smart people and those smart people will know someone who invests in real estate (Because smart people invest in real estate… just like A=B B=C A=C)!

*****I can't underscore how important networking is, I was able to link up with an experienced first partner who helped (and still helps) guide me through REI.

Step 4 (analyze deals and market): Analyzing multiple deals everyday as well as market rents for the areas I was targeting. I regularly searched through Zillow, realtor.com, Loopnet and Trulia. I used these sites to find properties for sale, current rents, as and look over previously sold properties.

Step 5 (leads): Immediately I realized that going about finding a deal through Zillow was nearly impossible and that brokers are not incredibly willing to spend time handing off deals to a newbie. So…. What did I do?

  • 1.Started posting on Biggerpockets (I received my first deal through a BP real estate agent)!
  • 2.Downloaded a list of multi family owners from Listsource.com
  • 3.After receiving the list I searched for phone numbers and began looking up every property (assessors website and Zillow) and becoming familiar with the neighborhoods. I would also walk the neighborhoods and properties over my lunch break and on my drive to and from work. (this is before I made a call or sent out any letters).
  • 4.Once I had a decent understanding of my criteria I began hand writing letters (191 to be exact) and calling the phone numbers I was able to gather online.
  • *****This was the catalyst to me finding deals and launching my career***** I was able to do six deals from that initial list.

Step 6 (start networking group): After attending the local REIA a few times and receiving a lot of value I realized that starting another group would bring at least twice the value. With the help of my partner I began a networking group which now in less than a year has over 200 members and regular attendance of 40+ individuals a meeting.

Property Management:

When I initially began learning about the power of real estate and passive income I assumed I would also be a passive investor and reap the benefits of financial freedom. Quickly I realized that if I were to take the passive approach my goals of quitting my W-2 would be extremely delayed (also I would be putting my life savings into another person’s hands). I realized that property management, although a job in itself, would allow me to control my career and financial freedom.

Caveat: Property management is Very demanding. Do NOT manage your own properties if:

  • 1.You are not a people person.
  • 2.You do not like talking on the phone.
  • 3.You dislike working weekends (or any hour of the day outside of 9-5).
  • 4.You do not want a second job. This is NOT passive, it requires you to create systems and deal with all the complexities that a business entails.

Reasons to manage your own properties:

  • 1.You are an effective manager and for the most part enjoy people.
  • 2.You want to reduce vacancy and expenses (after the property has been repaired my vacancy rate is below 2%).
  • 3.You want to start your own business and instill a certain “culture” at your properties. I focus heavily on customer service, I am not a pushover but try to go above and beyond as far as customer satisfaction.
  • 4.It keeps you very in tune with your investments, which may be the key to your success.

Thanks for reading and if you would like to talk please reach out through BP or any other channels! I would love to connect with more individuals and discuss Real Estate!

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Most Popular Reply

Investor · Omaha, NE · Member since 2016 · 33 posts · 26 votes
8y

@Collin Schwartz forgot one large detail that has been taking up a good portion of his time the last year and a half - giving back!  Thanks for being a mentor, for always being open to provide advice, and for starting up and managing the meetup.  Appreciate it buddy!

See this reply in the discussion

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  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Katie Sorensen thank you!

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Karl Cameron ignoring the negative people goes along way in finding successes and stepping into the unknown. Negative talk and complaints can really cloud a person's thinking.

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Mitchell Litam Yes my Why was definitely for freedom and to spend more time with my family. As far as books Rich Dad poor dad, millionaire real estate investor, Dave Lindahls Multi family millions and The Compound Effect are all necessary reads.

    Best of luck man and congrats on the upcoming wedding!

  • Rental Property Investor · Cleveland, OH · Member since 2018 · 191 posts · 432 votes
    8y
    @Collin Schwartz great job. I'm proud of you and I don't ever know you. Lol.
  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Nana Osei thank you for reading and your kind words!

    @Bruce P. best of luck in finding your first property!

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Lisa Shankus the hard money lender I use is local and only lends locally. I will however say that Fund That Flip seems great (I have not done any business with them yet). They came and spoke at one of the meetups and seem very investor friendly!

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Heather Allan yes many people talk about managing the manager. I prefer to just skip the middle man and do the "hard work" myself. I will say that great partners and contractors make a load of difference. Thanks for reading and glad you enjoyed!

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Que Roland great to hear your story! The hours and timing can be difficult with little ones, but I can guarantee that they will incredibly thankful that they are being shown what the "American Dream" is all about. It used to be pensions and 9-5's nw we have the ability to be entreprenuers and truly control our destiny. Nothing is easy but at least investing is "worth it". Best of luck in your endeavors!

  • Investor · Venice, FL · Member since 2017 · 11 posts · 1 vote
    8y

    Great information and very encouraging! I have read a number of those books and can't say enough good things about them. 

    I too am in the process, granted the beginning stages of leaving my W2 job, to pursue real estate and just got licensed this year. 

    keep up the great work!

  • Chicago, IL · Member since 2017 · 8 posts · 3 votes
    8y

    Very motivating, nice work!

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Frank Wolter your post was awesome buddy! I would love to connect and talk shop someday!

  • Gino BarbaroPro Member
    Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
    8y

    @Collin Schwartz

    MIH my friend. The sky is the limit once you are financially free!

  • Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
    8y

    @Collin Schwartz - good job! That's how I did it! Thank you for sharing!

  • Jersey City, NJ · Member since 2016 · 61 posts · 44 votes
    8y

    Congrats @Collin Schwartz !!!

    Could you talk about the properties you purchased and financing for each property? I recently purchased my 2nd property and I am starting to run out of money for a down payment. I am curious to see the type of deals you purchased.

  • Craig DrummondPro Member
    Shingle Springs, CA · Member since 2017 · 24 posts · 119 votes
    8y

    Simply awesome!  Very inspiring and I loved the detail provided w/the doses of the hard realities peppered in.  Thanks for posting!

  • Investor · Devils Lake, ND · Member since 2014 · 46 posts · 3 votes
    8y

    That’s awesome. Great job. I too currently working on acquiring more rentals. Kinda hard in the small state of ND but slowly getting there. Thanks for the book list I need to read and educate more...

  • Flipper/Rehabber · Raleigh, NC · Member since 2018 · 76 posts · 67 votes
    8y

    @Collin Schwartz Congratulations on all of your achievements and thank you for taking the time to share with the community! As someone in the beginning stages of the process I really appreciate the openness and clear communication. Good luck with the business moving forwards!

  • Philadelphia, PA · Member since 2012 · 104 posts · 8 votes
    8y

    Yowza-That is extraordinary!    It is a fantastic lifestyle (for the most part).  Much continued success!

  • Investor · Folsom, CA · Member since 2018 · 20 posts · 12 votes
    8y

    Congrats on your success! Cool to see a family man make time to accomplish your goals. Appreciate the book list as well! 

  • Investor · Montclair, NJ · Member since 2016 · 60 posts · 14 votes
    8y

    Excellent article! Thanks for sharing all of the details. Did you do all of your investing in-state or out? 

  • Real Estate Agent · Houston, TX · Member since 2016 · 13 posts · 3 votes
    8y

    How many properties would you have without a partner?  Just curious.  

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Jen Narciso all my investing has been done in state and specifically in Omaha.

  • Developer · Atlanta, GA · Member since 2018 · 2 posts · 2 votes
    8y

    Thanks for sharing and inspiring. Stories like these keep me focused.

  • Rental Property Investor · Papillion, NE · Member since 2017 · 398 posts · 1k+ votes
    8y

    @Gino Barbaro thank sir! Getting to sit down and speak with you and Jake was awesome. I will be reaching out soon to setup a virtual meeting. Thanks for all you do for the investment/education community!

  • Rental Property Investor · Seattle, WA · Member since 2018 · 24 posts · 29 votes
    8y
    @Collin Schwartz great story thanks for sharing!!
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