All Forum Posts by: Judy C.

After managing apartment communities for many years and learning the ropes, I finally bought my first SFR in 2005 at age 39. I was planning to buy one a year for 15 years on 15 year notes and then refinance one each year to have an ongoing stream of tax-free cash flow. As luck would have it, I stumbled on to some great deals and they worked so well that the investments seemed to take on a life of their own and the numbers far exceeded my original plan. Before you know it, I had accumulated 25 or so SFRs and duplexes and then found an 11 unit apartment building with 36 storage units that were loosely managed and well below market. This one and a couple of other bargains provided part of the funds through cash-out refis to graduate to larger apartment communities. It took about 10 years for me to go from depending on an employer for a paycheck to being financially independent. I still oversee and direct my team daily to see that my investments are properly managed but I no longer have to report to the office daily or do the work myself. It has been a life changing experience for me. I couldn't have done it without mentoring from successful investors and the education gained in getting a real estate broker's license and reading lots of investing books. I wish I had found Bigger Pockets sooner because it is a great network! It is so much fun to hear all of your individual journeys.

The contract is critical because it spells out the entire legal agreement.  It is there to protect you if you find yourself in court so the last thing you would want is for it to be voided because it is copyrighted and you were never authorized to execute it.  Plus if you found yourself being sued for a personal injury case or death of a tenant(s), you don't want the jury to use this to weigh in their evaluation of your character.  As landlords and being perceived as having (pardon me but "Bigger Pockets"), we have to be careful to follow all of the rules and laws.  There is so much at risk if something goes wrong.  There is a lot of liability involved in this business and you really want all of the protection you can get.

@Aaron The two parties have agreed that the lease continues on a month to month basis until a written notice is given but the specifics on the notice are deleted.  The tenant has been authorized to continue renting by the contract so it is not a tenancy of sufferance because the landlord has consented to allow this month to month extension.  Yes, with the original language, the lease renews each month for a month at a time until either of you give a written notice, although with the cross-outs, it is now unspecified when that written notice is effective.  State law should dictate that a 30 day written notice would be sufficient if there is no fault.  If the was a lease violation, it would be different.  If the tenant is in default, Texas law allows a 3 day notice to vacate.  The contract normally shortens that to only 1 day (check your contract to verify).  Glad things are going better for you!!

@Alina Trigub  Thank you for the encouragement! 😊

@Tyler Ashworth Did you ever buy any investment properties in Abilene?  @justin 

@Justin Kurtz  How is it going with your move to Abilene?  I am thinking of trying to get a network of investors to meet regularly to exchange ideas.

@Yonah Weiss Thank you! There is always that period of a few sleepless nights when you first get started but it feels so good once it all falls into place.

Investment Info:

Large multi-family (5+ units) buy & hold investment in Abilene.

52 Unit Apartment Community in South Abilene

What made you interested in investing in this type of deal?

My background is multi family management and brokerage. I love investing in deals and relish the challenge of making them work.

How did you find this deal and how did you negotiate it?

It was listed by a colleague. He had not been successful at selling yet because it was not profitable at that time. We agreed to pay a little more based on future value due to large units and location.

How did you finance this deal?

Local lender. I am a minority partner in this deal.

How did you add value to the deal?

Implemented stronger management and leasing policies. Rent increases and better marketing made it all work.

What was the outcome?

Doing well now after some hard work & time.

Lessons learned? Challenges?

Its all a challenge but so rewarding when it works out!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Ben Russell Coleman Bank Abilene Banking Center is amazing.

@David Waddleton I may be a little partial but I think Abilene Texas is a great place to invest. Why? Several reasons including strong rental pool. Texas is a state that has a high percent of renters. Roughly 1200 people per day move to Texas. The PopulatIon of Texas Is predIcted to double by 2050. A large majority are young people who are more often renters. Abilene is a secondary market where house prices are still affordable and rents have proven stable and allow for profits. There are 3 private universities, Dyess Air Force Base, and other renter draws. One drawback is no state income tax so property taxes are higher but this can be covered by rent if numbers work. I could go in...One suggestion, if you do invest long distance, make sure you have an experienced and knowledgeable  broker and property manager in the area that you can rely on. Check references. It makes all of the difference!

Investment Info:

Large multi-family (5+ units) buy & hold investment in Abilene.

Purchase price: $4,200,000

Purchased a 170 unit apartment community in Abilene, TX. Rents were well below market and it needed lots of TLC. Did a major rehab. Was able to negotiate a master lease for the property and take over management prior to purchase in order to generate some of the funds needed for the down payment.

What made you interested in investing in this type of deal?

I have spent my entire career in real estate including multi family management and brokerage. I have insight from the management side that helps me see where there is room for improvement in management for immediate growth of equity. I knew it was a great opportunity but would require a lot of changes.

How did you find this deal and how did you negotiate it?

I have always lived in the Abilene, Texas area and involved in multi family real estate so I knew the owners. They often came to me for advice over the years. They just became tired of the headaches and were ready to sell. They knew it would be simple and could walk away with a guaranteed income in the interim and a nice payday once I put a new loan in place. It has worked out well for all of us.

How did you finance this deal?

Negotiated to take over property immediately. Executed a master lease with a one year option to purchase for a fixed price and guaranteed them a set amount each month. I took financial responsibility for getting units ready to lease and beginning some rehab which they agreed to all funds invested. This would have been considered an interest free loan to them if I had not purchased. I received a credit at closing for capital improvements during interim, security deposits & real est commission.

How did you add value to the deal?

Implemented new office and leasing policies and spent many hours staffing, training, overseeing rehab. Corrected utility billings, implemented conservation efforts, such as replacing all exterior light fixtures, tightened policies and increased curb appeal and remodeled office & interiors.

What was the outcome?

The income has increased greatly along with the expenses. It is just getting to the point of leveling out. It takes time sometimes to see cash flow but the equity has grown substantially.

Lessons learned? Challenges?

I had an on-site manager who was fantastic. She relocated and I promoted the assistant manager who was not strong. This was a mistake. I wish I had recognized sooner that she was not doing a great job. It would have saved a lot of oversending and poor tenant choices. Having the right people in place is key!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Scotty Lindley and Anthony Sandoval who are now with First National Bank Albany/Breckinridge were the bankers involved. They were awesome to work with and totally understand investment lending. I was so fortunate to have them involved.

@Jerel Ehlert Great info!  I also agree with @Greg H. -it was not a great idea for your agent to remove both options for written notice after a month to month lease.  State law should take over since there is no other written agreement between the parties.  If you don’t want the property back at lease expiration, have them sign a new lease for whatever period you guys agree to and have it reprinted without the strikeouts so that you don’t have to worry.  You could also just correct it and ask them to initial if they are in agreement but sounds like things didn’t go well.  Otherwise, a 30 day written notice of non-renewal delivered in the correct way should be sufficient to have the right to take back the property.