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Updated 22 days ago, 11/07/2024
36% Rent increse Two weeks Into First duplex as a 19 year old Investor
Hello, Bigger Pockets community!
I am very excited To have finally closed on my first investment here in Liverpool NY as a 19-year-old investor as of last week and be auditioning for the Bigger Pockets rookie podcast this Monday! After a couple of years of treading the path to frugality to build this financial runway, I've networked with the greatest people who made this all happen, of course, it took the strength, determination, time, etc to place myself where I am today but, without the mentorship of my two great mentors whom I wish used BiggerPockets so I can mention, I don't believe I would have made it thus far relying on some whimsical dream that this will all pan out accordingly, thank you for everything Greg and Lashawn.
In addition, I would like to thank Bigger Pockets for connecting me with the greatest realtor @Stephen Schmitt Who took my dreams and aspirations to the core when we first connected and spoke about my future goals to replace my W2 job for financial freedom. within three months of me deciding to pull the trigger and get pre-approved, we found this killer cash-cow that apprised over purchase price!!!
After owning the property for 1 week and putting in a lot of sweat equity, I've concluded that I want to keep the Inherited tenants based on the condition of their living space and the quality of the people, Knowing I want to keep them to save myself the headache of a turnover and vacancy of a projected move out If I were to suddenly increase rents. I turned to the Diontalk Binder strategy which educates the tenants on the current price of market rents, section 8, etc, and what I could potentially earn if they were to move out ( In this case being 1500 for a 3b 1ba). they then realize this and know paying a $400 increase (36.6% Increase) would be the best option vs moving out, living in cheaper housing, or going to market rent in the area. As a result, I've increased the rent to my standards and past other landlords' standards who are afraid to go past 10%!!! while leaving with happy tenants who will stay!
I hope to share the rest of my story hopefully being featured on the BP on the rookie podcast. If not I will consistently update here to create the biggest outreach I can considering my age!!!
Thank you Bigger Pockets community. for everything!
Link to Binder Strategy-
;lc=Ugwqmdl6Wt2H7Y4nv5F4AaABAg.A65NVRLFOeqA65OWWQk8i2
#5 Market Trends & Data Contributor
- Investor
They're not happy tenants, they're stuck tenants. Don't confuse the two.
You're 19, good for you to getting involved but keep it trim. You don't want to broadcast this.
Quote from @V.G Jason:
They're not happy tenants, they're stuck tenants. Don't confuse the two.
You're 19, good for you to getting involved but keep it trim. You don't want to broadcast this.
Stuck? The tenants proposed the rent increase to $1200, not me...... I'm a little confused here. If you watched the video I provided in the post It will explain how the strategy works very clearly.
also thanks for the advice! but without the whole "broadcasting" thing that you mention, I don't think I would have generated the outreach to the people of my age today who ask me for guidance on their first investment.
Have a great rest of your day and thank you for your consideration!!!
@Elijah Berg ‘a lot of sweat equity in 1 week’’? How so?
- Rick Bassett
- 475-900-3100
Quote from @Rick Bassett:
@Elijah Berg ‘a lot of sweat equity in 1 week’’? How so?
Hi Rick! By myself, not much would be possible. So thankfully with the help of my mentor and his crew of Six, we were able to complete all prep and are amidst our final pass for sanding floors before our water-based polyurethane.
We discovered the previous owner had dementia which explained most of the work we needed to do, Our short-term is improving that unit to rental standard, not necessarily adding property value as he and I are still drawing floor plans for Long term.
Thank you!!!
Quote from @Tim J.:
As in my mentor decided to help me by paying his crew for a week? Then Yes, that's exactly what I'm saying.
Why does he decide to help me? because that's how our relationship works.... I've done plenty of work in the past for him where this is simply returning the favor to help on my first property!
Thank you!!!
So this is some kind of communal organization - there is a "mentor" at the top, and a bunch of "mentees" who do work for each other/for the mentor.
Hopefully the asset is all in your name and your name only.
Congrats on getting a rental property so early in life.
Quote from @Tim J.:
So this is some kind of communal organization - there is a "mentor" at the top, and a bunch of "mentees" who do work for each other/for the mentor.
Hopefully the asset is all in your name and your name only.
Congrats on getting a rental property so early in life.
No, hopefully, one day soon though!
I met my mentor Greg through my gym as I am a registered amateur USA boxer and I always wondered why this older fellow was always boxing with us at the gym and never at work. He told me he was a Landlord and I asked him "As in a real estate investor?" and he said yes, from there I've spent countless hours working with him on his properties out of the gym to expand my knowledge the best I can.
yes, the asset is entirely within my name, and thank you so much for the Congrats on the success!
thankfully I get to share my story further in-depth next week as
I have the opportunity to record with Ashley Kehr and Tony J. Robbinson for The Bigger Pockets Rookie Podcast episode coming up!!!
Congrats on getting the property early and for putting in the grind to get the property in a better place.
Keep up the hustle, good things never come easy in life.
A very encouraging post! Thanks for sharing the Dion Talk Binder link. I had never heard of this. At annual rent increases, I do scour Zillow for market rents in the area, which I share with my tenants. I think it puts the increase into perspective and I get no pushback or arguments from my tenants. I'll watch a few videos and see what I can learn. Thanks again.
Quote from @V.G Jason:
They're not happy tenants, they're stuck tenants. Don't confuse the two.
You're 19, good for you to getting involved but keep it trim. You don't want to broadcast this.
Agreed. I guarantee both tenants were at least passively looking at other apartments that same day.
Quote from @Michael Carter:
Quote from @V.G Jason:
They're not happy tenants, they're stuck tenants. Don't confuse the two.
You're 19, good for you to getting involved but keep it trim. You don't want to broadcast this.
if they wanted cheaper rent? move downtown into an apartment. If they Wanted to stay inside a duplex within class A+ neighborhood?
(in which they did)
then pay the price, or another tennant will🤷
Quote from @Elijah Berg:
Quote from @Michael Carter:
Quote from @V.G Jason:
They're not happy tenants, they're stuck tenants. Don't confuse the two.
You're 19, good for you to getting involved but keep it trim. You don't want to broadcast this.
if they wanted cheaper rent? move downtown into an apartment. If they Wanted to stay inside a duplex within class A+ neighborhood?
(in which they did)
then pay the price, or another tennant will simple as that🤷
Quote from @Elijah Berg:
Quote from @Michael Carter:
Quote from @V.G Jason:
They're not happy tenants, they're stuck tenants. Don't confuse the two.
You're 19, good for you to getting involved but keep it trim. You don't want to broadcast this.
if they wanted cheaper rent? move downtown into an apartment. If they Wanted to stay inside a duplex within class A+ neighborhood?
(in which they did)
then pay the price, or another tennant will🤷
You made the claim that your tenants were now "happy" to pay a $400 rent increase. No, they're not and its naive of you to think that way. And like the first person said about how the tenants are more likely stuck than happy, you just proved that point. They're not stuck as in "there are no other options", they're stuck as in "there are cheaper, crappier options but we'd have to pack up our entire lives and deal with the other expenses/headaches that come with moving so I guess we might as well just suffer with the increase".
There are landlords who are proud to own properties while offering their communities a nice and safe place to live (and enjoying the benefits of having someone else pay for your appreciating asset). And there are landlords who only care about maximizing profit and nothing else. I'm not saying you're one or the other, I don't even know you. But I do know our city needs a lot more of the first type.
Two things are true at the same time.
1. You're doing a great thing for your financial future. Raising rents to market levels is a big deal and hard to do.
2. You lack the proper perspective. It would pi$$ me off to no end if a 19 year old came to talk to me with a binder telling me how good of a deal I am getting by seeing a 36% rent increase. A good thing happened to you and a bad thing happened to them. Full stop.
@Elijah Berg You're posting because you want an atta boy. So do I and the rest of us. I get that, and you're doing great. I see that it has been 3 months since the original post; how are things going?
Quote from @Travis Timmons:
Two things are true at the same time.
1. You're doing a great thing for your financial future. Raising rents to market levels is a big deal and hard to do.
2. You lack the proper perspective. It would pi$$ me off to no end if a 19 year old came to talk to me with a binder telling me how good of a deal I am getting by seeing a 36% rent increase. A good thing happened to you and a bad thing happened to them. Full stop.
@Elijah Berg You're posting because you want an atta boy. So do I and the rest of us. I get that, and you're doing great. I see that it has been 3 months since the original post; how are things going?
Hi travis! Thank you for your response! 1- thank you for the congrats.
2- For them or anyone older such as yourself, At the end of the day a “Perspective” is simply just a perspective, everyone will always have a different view. I may be 19 but that does not have any factor in how I efficiently operate my business, as you can see. Most of this help comes from Both of my mentors so yes I am grateful
3- tennacy is going great and sound! Ive also had the opportunity to be featured as a guest on the official Bigger Pockets Real Estate Rookie Podcast. Check it out! I posted the link or you can find it on BP Rookie #465
Quote from @Michael Carter:
Quote from @Elijah Berg:
Quote from @Michael Carter:
Quote from @V.G Jason:
They're not happy tenants, they're stuck tenants. Don't confuse the two.
You're 19, good for you to getting involved but keep it trim. You don't want to broadcast this.
if they wanted cheaper rent? move downtown into an apartment. If they Wanted to stay inside a duplex within class A+ neighborhood?
(in which they did)
then pay the price, or another tennant will🤷
You made the claim that your tenants were now "happy" to pay a $400 rent increase. No, they're not and its naive of you to think that way. And like the first person said about how the tenants are more likely stuck than happy, you just proved that point. They're not stuck as in "there are no other options", they're stuck as in "there are cheaper, crappier options but we'd have to pack up our entire lives and deal with the other expenses/headaches that come with moving so I guess we might as well just suffer with the increase".
There are landlords who are proud to own properties while offering their communities a nice and safe place to live (and enjoying the benefits of having someone else pay for your appreciating asset). And there are landlords who only care about maximizing profit and nothing else. I'm not saying you're one or the other, I don't even know you. But I do know our city needs a lot more of the first type.
That’s absolutely great and wonderful for the investors who are in the position to stabilize that!!!
as of right now, I'm a 19 year old real estate investor with his first cash flowing duplex.
As a result I must Study the market and know what i’m worth. I Offered it to them at 10% below market with him paying utilities. he wanted it, so I screened him to verify he can afford it. If he didn't want it or can't afford it, I would have reward him with 60 days time to find another place, then find a new tenant that can pay what it is worth…. Any other sympathy is unfortunately just Poor Business Practice.
Thank you!!!