456: 1000X2020 Update

SHOW NOTES FOR EPISODE 456: 1000X2020 UPDATE

When Bill Manassero launched the Old Dawg’s REI Network in 2016, he knew he had to set a formidable goal for his real estate investing efforts to keep him both motivated and focused .  He set out to acquire 1,000 units or doors by the year 2020.  In todays podcast, and with only two months remaining in 2020, Bill shares where he is at with his goal and if he will achieve the goal he set out to achieve more than four years ago.

Tip of the Week

• Don’t Run Out of Cash – Picture this: You’ve bought and sold your first house and made a nice profit.  You’re in the middle of your second rehab and you’re purchasing your third deal. Your marketing is paying off as the forth deal comes around; it promises even more profit than the first three.  But now you’ve got a problem – you’ve run out of cash!  You can’t buy that forth deal or any other good deal that comes down the line, until you rehab and sell the second and third houses.
• This is the old Cash Crunch, and don’t let it happen to you.  You should be putting down as small a down payment as possible when you purchase your investment properties.  You want to leverage (other people’s money) to your advantage, and accumulate as much property as you can, while using as much of other people’s money as possible.
• How do you do it?  Establish a relationship with a hard money lender as soon as possible.  Sure the money costs you more.  But you’ll factor the costs into the deal when you make your offer, so your profit is still where you want it to be.
• Hard money lenders will lend you up to 65% of the after repair value (ARV) of the property.  If you’re negotiating the right types of deals, this should be all the money you need to purchase the house and do the repairs.  If your numbers are not working out, perhaps you’re focusing on the wrong types of sellers.
• Remember, you should only be focused on motivated sellers… people who for one reason or another must sell their property in a short period of time.  Develop effective methods to have these sellers consistently contact you and you’re on your way to wealth!  – Source: Dave Lindahl

1000X2020 UPDATE

Introduction

For those of you not familiar with my goal, in 2016, I set the goal to obtain 1,000 units/doors in six years.  And since, I bought my very first properties in 2014, my target date to reach my goal was the year 2020.  The goal was simple: I would just double the number of units every year. I have all of this on an Excel spreadsheet that you can download here: 1000X2020_WORKSHEET.

Here’s my status to-date:

In 2014, I started with three properties, totally 4 units– 2 single family homes and a duplex.  The duplex and single family properties were in Memphis.  I also bought a single family home in Atlanta.

In 2015, I was supposed to buy 8 units (doubling the number of target units I was supposed to have at the end of 2014) but I only bought a duplex (2 units) in Indianapolis. (We were moving from Port-au-Prince, Haiti to Southern California, finalizing adoptions and a bunch of other stuff  so it was a tough year to search and acquire properties) So, at the end of 2015, I was 6 shy of goal.

In 2016, I purchased a 22-unit apartment.  My goal was to double the 4units from 2014 plus the 8 units in 2015.  8 plus 4 is 12, double that and you have 24 was my target goal for the end of 2016.  However, I was 2 units shy of my goal of 24, plus the 6 units I was shy in 2014, had me at 8 under goal by the end of 2015.

In 2017-2019,  My written goal for 2017 was to acquire 72 units, which would give me a cumulative goal of 108 units by year-end.  But I am targeting 100 plus, so I will surpass my goal and make up for prior year deficiencies, plus be 20 units over my goal going into 2018.

Near the end of 2019, I co-sponsored and was a GP on the acquisition of 529 units in Irving, Texas.  This gave me my first big boost

In 2020, I became a part of a team that is building Senior Living facilities throughout the U.S. We are  currently building and raising funds for four 92 unit facilities or 368 units.

Putting Together a Plan

• I’m big on writing a workable Strategic Plan
• I knew that just setting a goal wouldn’t be enough
• I had to be deliberate
• The first part of the plan was key – I had to identify my “Why”
  • Simon Sinek wrote a great book on this topic called “Start With Why”
  • This is key because if you don’t know why you are doing something…
    • You probably won’t be motivated – that is the key element of knowing your why
    • If you don’t have a why, when things get tough (and they will get tough,” You’re more likely give up without persevering!
    • You also won’t know how to get there because your why helps you figure out what kind of investing you need to do

My “Whys”

• Here’s a podcast where I talked about my “Whys“
• Continue to support my non-profit in Haiti – Child Hope International
• Helping my children (7 children) and grandchildren (4 so far)
  • Living by faith for 20 years was actually a wonderful experience and I could do multiple podcasts just on that
  • But our reality was also living simple
  • We had an overabundance of joy but sometimes not much cash
  • which has many benefits too but it also means that financially, you are limited
  • As I was approaching retirement, I wanted to help my family financially:
    • To give my daughters (I have 4, 3 unmarried) the weddings of their dreams
  • To help my kids with their education
  • To help them get their first home
• Next: I needed to set my mission, vision and specific goals – not necessarily the same as your why

Setting Goals

• I wanted strongly quantifiable goals
• That’s why I needed a tested and proven strategic plan
• The great thing in starting with a plan is that you work, revise and refine it every year – you find out what works and you do more of that and less of what doesn’t work
• In other words, I wanted to set strategies that had likely results (for example, if I sent out 500 direct mail pieces, I could expect, for example a 1% return or 50 responses, out of which at least one would convert to a sale)

The Need to Leverage

• When I was buying properies alone, without investors, it was simpler but would work only up to a certain point
• Later, as I’m looking at hundreds of units and multimillions in dollars, I realized I needed to partner with others.  Not only for the required funds but for the expertise that I didn’t have and to spread the risk
• In the beginning, doubling the number of units was fairly easy but when it came to acquiring 216 (the goal for 2018) and 646 (the goal for 2019) I knew I would need major help

Syndication

• I realized that syndication was the next logical step
• Yes, the SEC requirements and other factors made investing a bit more complicated but the benefits far outweighed the extra paperwork
  • I could partner with seasoned investors
  • I could share the financial benefit with investors

In Summary

I am currently at 924 units (Hey, I accidently on-air said “late 900s” – my bad – I’m in the low 900s).  There are 529 units in Irving Texas, multiple Senior Living facilities in Florida and Williamsburg, Virginia and more planned.  If we are able to get another senior living facility going before year-end, I will make my 1,000 goal.  I am also looking at some great 100-plus unit apartment projects right now that could happen before year-end as well.

Syndication has allowed me the opportunity to get into some great deals, partner with great co-sponsors, get great experience

But please note, I have never pursued a project just to make my numbers.  In fact, I didn’t buy anything – not even a duplex – in 2017 and 2018 because I could not find the right deals.  The fact that I am even near my goal is rather surprising to me, to be honest with you.  I will never compromise nor lower my expectations or criteria to just “make my numbers.”  I am committed to being part of only the highest level deals.

DISCLAIMER:  Many of the above strategies take knowledge and have a higher degree of risk.  You need to do your research and/or work with someone who is experienced to reduce your risk.

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Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com