Dear readers, yes this is a true story. The funny part is that I have been so focused on my clients' investment properties that I only realized the results for my own portfolio just this month, after 4 years! The realization came as I was filling out my real estate schedule to get approved for an 11.6 million dollar loan with my partner for a 116 unit multi family property— a crazy advancement that I had been dreaming of for the last 3 years. The move to this point was difficult. I felt that I constantly was butting up against a glass ceiling until now.
To be fair, the initial $100k came from my father as a gift. I know I am incredibly lucky to have a father who can provide me such an opportunity, and for a long time that made me invalidate my own successes because it felt like of course I should be successful with such a start. However, now that I see what I did with the money and also have the experience to see how other people have squandered the same opportunities, I finally feel that I earned what I made from it and not to be ashamed that I received an easier start. In the end, I still learned this business from scratch, with no education in it, just by watching and doing.
How Did I Do It?
My first purchase was in May 2016 of two houses from an investor who I had worked with to provide due diligence materials for the auction. They were two 3 bedroom, 2 bathroom properties both on Wood Knoll Dr in Jonesboro, GA for $92,000 total. At the time this was expensive 😂! They needed a few thousand dollars of work, but not too much. I bought them together in cash, crediting my real estate commision into that (as a licensed agent) coming to a total of $90,656.
Then, I purchased Pineglen in November 2016, a 3 bed, 1.5 bath home in Riverdale, GA for $55,000 but with a mortgage, so I only put down $18,235. I bought it renter occupied, and the same renter still lives there now.
At this time, I had already made money in two months, and had about $52,000 left to reinvest. So I purchased my next property, a 2 bed townhome in Hampton, GA for $55k with a mortgage. Therefore, only putting down about $6,000!
Then, I financed the remaining property on Wood Knoll Dr that I had originally bought in cash in April 2017 for a loan amount of $51k and received about $19k back from the value increasing.
Finally, I purchased a 2 bed townhome in the tax auction for about $13-15k. This one was renter occupied already, but I had to wait a year and a half before taking full possession and paying an extra $1000 to my attorney to do so. Even though there is a high HOA fee there of $220 a month, the property is now worth about $58k and the rent is $925/month meaning a return of 33% on cash flow, plus the property is worth 4.5 times as much!
Now I am left with about $49,000 in cash that goes to my savings account! Plus the gross cash flow from 2017-2021 equals $199,988, or about $120k net income including mortgage interest payments.
The Final Result
Now four years later, the value of these four houses has gone up to a total of $454,396, with a current total investment of $40,235 in cash, and a total loan amount of $97,971, equaling an IRR of $144.47%!
So all in all, $100,000 or any amount of money can be very powerful in achieving your goals if used right. BACK TO BLOG HOME