All Forum Posts by: Michael Beeman

@Jay Hinrichs   Yes, not everywhere is this possible. I was resourceful at obtaining capital, but by doing a side hustle to come up with the initial capital, and by doing massive amounts of homework and being able to show exactly how things work on spreadsheets, and with a full business model, I was able to find a couple investors.  It's also difficult to do this in some markets, but if you drive within 90 mins of nearly any major market and start searching, it can be done. (I personally know quite a few people who have done it). I'm sure you do too tho. It's a trade off, if they would like to do it that way, they just have to put more time into it. 

@Michael J. I have generally used this one bank. But what we have been doing is going in with a business plan from the BRRR calculator here on BP, then we have the property appraised.. as is.. and .. as improved. We put 20% down on the purchase, use our own money/crew for the rehab, then we go back to the bank for the cash out refi. Once the bank sees that the appraisal is confirmed. They will refinance us. One trick i learned was that when telling the bank what i was going to do for the rehabs, i would highly overestimate the costs drastically, then the appraiser tends to evaluate the building much higher. (this works very well on 1-4 unit buildings) 5 units and above I get specific with my cost analysis but i also show what I will be renting them for, my expected expenses and my business plan.. I show all this to the appraiser, and it greatly enhances my after rehab appraisal, and i save money on getting a second appraisal.

@Kerry Baird  Thank you!!  It's been a lot of work, and it's been very exciting watching it grow. I can't wait to see what the next chapter holds!! In less than a year, we have become the largest landlord/rental property owner in our small community. We are still reinvesting 100% of our proceeds and we plan on doing so until June 1st 2019, where our goal is 120 cash-flowing units. Then our plan is to leave our regular 9-5s and semi-retire into property management and acquisition. Our final goal is to be able to basically step away from the business in 5 years and have enough units that we simply oversee our property management company, that runs itself. 

@Michael J.   I seem to have found the right banker locally.  And we haven't pushed it to the max, nor have we tied up all our cash in one deal. But he will typically refi as soon as we have the units rehabbed and rented and he can get confirmation of the new appraised value of the building..  It's pretty awesome. The 10 unit building that we purchased and it needed 4 vacant units rehabbed and rented, He's already told us when we have our plan finished and he can get the appraiser back in to confirm the new value of the building, he will be able to refi to 75 or 80% of the appraisers value. This has been a common theme with this particular bank. 

@Lee Lockhart  Thank you!!!   It's been a crazy ride, but I'm loving it. I just got off the phone with an estate manager that is handling an estate sale and had an 8 unit building that we have struck a deal on, well below market value. by June 1, my plan is to have close to 50 cashflowing units. 

This is a brief overview of how I went from a family business employee (with 7 children), only earning 60k/yr, filing bankruptcy in early 2016, to someone who will be completely financially free 18 months after I purchased my 1st property May 15 2017.

I began my Real Estate Study in late 2015, I mostly read books. All the Rich Dad books (but they are full of motivation and mindset, but don't have any actual substance), I read and listened to many podcasts, while driving for my regular job, or while working on my "side gig" where I cut, split, and delivered firewood after work hours. The idea of financial independence when you are working that hard, is incredibly inspiring. So I listened, learned, and saved money. I saved money as much as I could out of my paycheck and saved all of my proceeds from my firewood sales. I found some great podcasts, Joe fairless has a good one, along with Rod Khalief, and BP had a great one. I found it eventually then realized BP had this great website. I found the BRRR method and I was hooked. I live in Rural Illinois and while few podcasts cover rural investing, the principles remain the same. So I began talking about it with friends and family, and when it became apparent that I knew what I was talking about. I had 2 people that wanted to start the biz with me. They both invested $20k each for 1/4 of the business and I kept 1/2 (400 shares) and 1 non-paying, voting share (so that I remained in control, of the final decisions). So now I "owed" my new business 28k dollars, but we had enough to get started.

We purchased a vacant 6 unit building that needed 4 units completely remodeled, and a large old house that we planned to convert into a Triplex. Even though we floundered for almost 6 weeks with a contractor that did horrible damage, We finally found the right guy, ended up finishing 25k over budget and tied up over half of our initial 52k we had to invest, with no way to BRRR out of that messup. Fron there on out, I found much better deals, a SFH that I bought at auction for 12k, it appraised for 40k, we refinanced it, put a 25k lien against it, and it rents for 650/month, pays it's mortgage, and cashflows. Plus we created 13k out of thin air. We also did this with one other house, and a 10 unit building. Altho the 10 unit refi is coming up in May/June. There were growing pains in learning how to use systems (we use "Rentec Direct"). There were growing pains in how to manage tenants, But, all in all, we've been very aggressive when we find a deal. I and my partner @John Hagen have learned a lot, been a little surprised by the speed of what we were able to do. I can say this, you can't do it alone. 

I built a great team. That started with my partner @John Hagen, but continued with my wife who works tirelessly for our rehab crew, which is also headed by our maintenance man, and he's been amazing. My mom (who is the other investor that owns 1/4 of the business) is more of a silent partner, but she has done some small loans from time to time to our business to help it get thru cash crunches that come with growing and rehabbing nearly every dilapidated unit we buy. But I am extremely proud of this team. We currently own 29 multi-family units and 2 SFH's (95% occupancy). We have 7 more multi-family under contract for April, and we are steaming forward. I am proof that even tho u may be middle class and have a lot of things going against you. You CAN DO THIS!!!!

*I "Dave Ramsey'd my budget, and "Robert Kiyosaki'd my investment mind.  You can too!!

@Bob Crane  I am pretty sure there are very few "gotchas" on Lake Mattoon.. But, I will say that the amount of value that you can get is probably going to be based on location. Some places in that area are heavy with "trailer park" type of spaces. .  

@Thomas Lorini  @Earnest Boyd  @Hunter Johnston   I hope all is well with you guys. We have just signed a purchase agreement to add 5 more units 3-2BR and 2-1Br units to the portolio. I'm excited. That brings us to 20. And we are managing 27 because my mother has a 7 unit building that we will take over management of, next week.

@Sung Park   Thank you!! I'll try to do that. 

I'm looking at 11 apartments in a market about 1 hr from my home. But, I'm trying to find out where I would go to find data on important things like Average household Incomes, Unemployment Rates, maybe even vacancy rates and what the average rent rates are in the area.