All Forum Posts by: Justin Woodworth

Well, it happened. I was making phone calls to off market properties and came across a landlord who was tired of the day to day and ready to vacation. We had multiple conversations over the phone about numbers and goals etc. I first had the deal put together where I would have no money in and she would land contract all 3 over to me for a monthly payment. After a meeting with her accountant and lawyer she decided she wanted to sell one of them traditionally for a lump sum and then contract out the other two. This deal took 3 months to put together with many coffees and goal setting conversations since interest rates rose 1.5% during our conversations. Here is what the final deal looked like.

Purchase All 3 Duplexes (In Immaculate Condition) At Assessed Value

Total Purchase Price: $911,200.00

Purchase Price 1st Duplex: $311,000.00

1st Duplex: 3 bed 1 bath / 3 bed 1 bath unit

20% Down, 6.75% Interest

Current Rents: $2975 

Market Rents: $3700

Appraised: $412,000.00

Purchase Price 2nd Duplex: $298,200.00

1st Duplex: 3 bed 1 bath / 1 bed 1 bath unit

0% Down, 5% Interest, 5 Year Term With Option To Renew

Current Rents: $2400

Market Rents: $2825

Estimated Value: $385,000.00

Purchase Price 3rd Duplex: $302,000.00

1st Duplex: 3 bed 1 bath / 1 bed 1 bath unit

0% Down, 5% Interest, 5 Year Term With Option To Renew

Current Rents: $2400

Market Rents: $2825

Estimated Value: $385,000.00

Total Estimated Value Gained On Purchase - $273,600

Room For Rent Increases: $1,575

This was a huge win and an amazing opportunity. I'm so thankful to God and to my team that helped me put this all together. THE DEALS ARE OUT THERE EVEN IN A HARD MARKET. 

@Sara Mc

Hey Sara,

Are you looking to strictly be a photographer for multifamily or are you looking to invest? I've been investing in the Madison area for 5 years now. I'd be happy to chat.

Justin

Hey BP'ers! Just wanted to share the good news. This last year was absolutely crazy for me with business and personal stuff but things have started to turn around!

Through calling property owners throughout the Madison area I ended up getting a lead on a 16 unit out in Fitchburg WI. We closed on it last month and have already started getting rents bumped! 

Purchase Price: 1,800,000.00

Units: 8 3 Bedroom/1 Bath, 8 1 Bedroom/1 Bath (but with 2 rooms finished in the basement for each).

The property was conservatively under rented by about $3500 a month. We are projected to increase rents significantly over the next year.

I guess when you  put in the work, good things happen. 

LETS GO!

Hey BP'ers! 

This month marks 3 years of owner occupying a duplex and investing in real estate. I was reminiscing and felt like sharing a progress report! 

At the time I was averaging 68 hours a week working as a firefighter/EMT barely making ends meet. My current business partner one day handed me Rich Dad Poor Dad and I felt the world of opportunity open up. Fast forward a whole year and I managed to save $17,000. I took that $17,000 and purchased a duplex (4 bed, 2 bath each side) for $305,000. My payment was $1980 a month and my tenants were paying $1500 a month. Before purchasing the property my wife and I were renting out a 1 bedroom apartment in Middleton for $1050 a month not including utilities. After we left that apartment and moved into our property we cut our monthly rent expense down to $480 plus utilities. 

"3 years later" - SpongeBob's Narrator

I have 14 units with my business partner and my wife and I are moving out of our first duplex hopefully in 2022 (ideally into another duplex). After doing the math and updating rents both sides of my duplex should rent out for 1675+ a month (conservative) and the property will cash flow over $1,000 a month. 

My partner and I purchased 8 units this year up in Sun Prairie. The purchase price was 875k and it appraised at 950k. After purchase and raising the rents the COC return for the property is 21.9%. I couldn't believe we pulled this deal off as it was the first commercial multi family deal we had ever accomplished.

If my wife and I had not owner occupied our duplex, I do not think that we would have this level of success. My parents never dreamed of their son owning over a million in real estate (debt so far, equity in 30 years LOL) and it still shocks most of my extended family when they ask me what I am up to. 

My goal in 2022 is to not only improve my rental portfolio, but get 10 Bigger Pocket followers into their own multi family property. It's difficult to put my gratitude into words. Had it not been for Bigger Pockets I would not be where I am today. With over 200 podcasts listened to and 40 real estate investing books read, there is no better place to start than here. If you are looking to take the first step, I would love to connect and help you realize your goals.

Here is to a successful 2022!

Cheers,

Justin

Investment Info:

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

Purchase price: $875,000
Cash invested: $175,000

8 Unit, appraised for 950k, purchased for 875k, made 75k on appraisal, cashflows 38,400 a year, 21.9% COC Return

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

The numbers were fantastic and the property was in wonderful condition.

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

Craigslist, negotiated in person.

How did you finance this deal?

My partner and I brought cash to the table.

How did you add value to the deal?

Property was under rented (every unit was $850 or lower) and market rent for the units is $1100.

What was the outcome?

A fantastic cash flowing property where we made 75k on the appraisal.

Lessons learned? Challenges?

If a seller offers you a small seller's note, take it.

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

My team analyzed the deal and underwrote it. Talk to me if you have questions!

Investment Info:

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

Purchase price: $875,000
Cash invested: $175,000

8 Unit, appraised for 950k, purchased for 875k, made 75k on appraisal, cashflows 38,400 a year, 21.9% COC Return

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

The numbers were fantastic and the property was in wonderful condition.

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

Craigslist, negotiated in person.

How did you finance this deal?

My partner and I brought cash to the table.

How did you add value to the deal?

Property was under rented (every unit was $850 or lower) and market rent for the units is $1100.

What was the outcome?

A fantastic cash flowing property where we made 75k on the appraisal.

Lessons learned? Challenges?

If a seller offers you a small seller's note, take it.

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

My team analyzed the deal and underwrote it. Talk to me if you have questions!

Hey BP'ers!

It has been an exciting couple of months for my business partner and I. We closed on a 8 unit out in Sun Prairie WI and after getting through the book "Traction" and "Best Real Estate Syndication Book Ever" we have finally nailed down our 10 year, 3 year and quarterly goals. As such, one of my objectives has been to call 5+ property owners a week. 

I had a really great time talking to multiple investors so now I have been calling MUCH more than that. As it sits we have found multiple multi million dollar portfolios where the sellers are looking to get out. We have set up our underwriting process and our due diligence check lists. It is so exciting to have over 15 million dollars to evaluate. If you would have told me a year ago (I owned 1 duplex at that time) that this is what most of my time would be going to I would have called you crazy. My partner and I have the goal to close on 8 more units before the end of the year (I personally want to nail this 30 unit but he doesn't know that quite yet) and it looks like we are going to be ahead of schedule. Before we do this full time we want 100k a year in cash flow after property management, vacancy and repairs/maintenance. 

The reason I wanted to post this is just to hopefully give one person confidence that they can go out there and DO IT. There is limitless opportunity out there just waiting for you to call. 

Seriously, go out there and do something big.

Justin

Hey Bigger Pockets family,

It has been a very long time since I wrote in the forums but I figured some people get inspired by stories of success, so here is mine. I started off 2 years ago with 15,000.00 looking to invest. I listened to 100 BP podcasts and read every BP book trying to get prepared. I ended up purchasing a duplex on the east side of Madison for 315,000.00, got 10k worth of credits and paid every nickel and dime I had to own it. Now 2 years later it is appraised at 355k and is going to cashflow like crazy (1650 a month projected once we move). Both sides are 4 bedroom 2 bathroom which is super difficult for families to find. I also now have a 60k HELOC to use whenever I want!

After purchasing the duplex I realized my Realtor made 10k for about 4 hours of work. The next month I got my real estate license and started my own business. Now I gross 6 figures + and am purchasing my first four units. These were off market deals that a friend of mine found and now we are partnering up. I am super excited and nervous all at the same time. 

Man, 2021 is going to be one hell of a year.

Thank you BP community!

Justin

@Ben Pierce

Hey Ben! Madison is a fantastic market but may not cashflow the best compared to some outlying areas. I would be happy to talk to you about Madison if you needed a contact out here.

Cheers

@Travis C Brown

Hey Travis! Where in Wisconsin are you looking to invest? I am a Realtor in Madison and just got a client of mine into a duplex to owner occupy. Once he moves out of it it'll cash flow above 40%. Shoot me a message and I would be happy to talk to you!