In part three of our Multifamily Millionaires Series, you’ll discover how Chris, once a burned-out franchise owner, transformed into a successful real estate investor with a $3.374 million net worth in just 3 years!
First Investment: Martin Ave.
Chris’s first investment was a 23-unit apartment building purchased for $875,000. After several renovations and strategic rent adjustments, this property recently appraised for $1.75 million. Now Chris is pulling out $590,000 through a cash-out refinance to re-invest in another property.
Second Investment: Colony Park
Next, Chris purchased a 20-pad mobile home park for just over a million dollars. Following a similar model of value addition, Chris increased rents and billed utility charges backs to increase revenue. Fast forward three years, and this park is now valued between $2.1 and $2.2 million.
Third Investment: Magnolia
Chris found his third deal on the MLS, a seemingly unremarkable eight-unit multifamily. But Chris saw potential others didn’t, potential in the community’s economic growth. Through targeted renovations leading to rent increases, this property increased in value from $725,000 to approximately $1.35 million.
Through these investments, Chris’s net worth soared from around $500,000 to $3.374 million. What did this newfound wealth bring him? It unlocked financial independence, and no longer burned out, he regained his time; something many of us desire but rarely achieve. Are you curious about how he did it? Let’s dive into this interview where he shares his story with us.
Meet Chris: From Franchise Owner to Multifamily Millionaire
Peter: Welcome, everybody. Hey, I have Chris here with us. And as I mentioned before, incredible, incredible, story of how he created $3.374 million dollars in equity in about three years. Welcome, Chris. Thank you for joining us today.
Chris: Hey, Peter. Thanks for having me.
Peter: You’re welcome. Chris let’s jump into it. Share with us your why; why commercial? Where were you before you joined our program?
Chris: Before I joined the program, I owned a couple of Orange Theory fitness franchises. I’d been doing that for about seven years, and I was looking for something new. I was a little bit burned out. I wanted to experience something else, and something that could be long term to build wealth. That’s what first got me interested in commercial real estate.
Peter: So, you’re a fitness buff, right?
Chris: Yeah, I am. I guess you could say that.
Peter: And those Orange Theory’s were taking up quite a bit of your time. Is that what happened?
Chris: They were. Yeah, we were busy. It was a lot of work. It was great, but it was a lot.
First Multifamily Investment: Martin Ave.
Peter: Let’s jump into your deals. So, in the three years you purchased a 23-unit apartment building, a 20-pad mobile home park, and an 8-unit multifamily apartment building. Let’s start off with the 23 unit, what we call Martin Ave. Tell us a little bit about that one.
Chris: Sure. Martin Ave is a 23 unit, as you said. It’s a mix of two bedrooms, one bath, some one bedroom, one baths, and studio apartment. With this one, there were actually 22 original apartments and there was one that was storage and we converted it so now we have 23 units.
Peter: And, as with all your holdings, you did a phenomenal job, taking them from where they were to where they are now in terms of increasing their rents. Walk us through Martin Ave because, ladies and gentlemen, this week, Chris is pulling out $590,000 as a cash out refinance. That took you a few years to do, walk us through the process of taking the rents from this level to that level. First, what were the starting rents? Let’s pick a 2 bedroom. Where were they?
Chris: 2 bedrooms were at $650 to $700.
Peter: And a couple of years later, after doing renovation, working with the property management team, where are they now?
Chris: Where they are now, our base rent is $1,000 for the two bedrooms.
Peter: That’s a huge jump, Chris. And imagine doing this over 23 units, that’s a lot of upside, right? So, you bought this property for $875, 000?
Chris: $875,000. Correct.
Peter: And two months ago, it was appraised for how much?
Chris: $1.75 million.
Peter: $1.75 million! That’s how you do it, Chris. That is awesome. That’s the one you’re doing a cash out refinance on, correct?
Chris: Correct.
Expanding Horizons: Colony Park
Peter: Great. Let’s jump onto your mobile home park, Colony Park. What was the purchase price and what did you do with it and what is it worth now?
Chris: So, the mobile home park, it’s a 20-pad mobile home park, purchased for $1,000,080. And we did a similar thing as we’ve done with Martin Avenue. With this one, I’d say our average rent increase over the last three years has been about $300 total. And then bill back all the utilities to help offset expenses.
Peter: So, on your mobile home park, you were not only able to increase the rents $300 a month across the board, but you were also able to charge all the utilities back to the tenants. That’s awesome, Chris. And Chris, correct me if I’m wrong, but both deals were purchased off market. Is that right?
Chris: Correct. I believe that’s the best way to find the best deals and I believe so more and more the further along we get.
Surprise on the MLS: The Magnolia Project
Peter: And then, deal number three was a deal that was listed online, right? And we found this 8-unit, “Magnolia”, we call it. That one, even though it was on the MLS and maybe not as spectacular a deal, I think a lot of people didn’t see what you saw in his deal. Tell us, why would you buy a property that’s already on an MLS? What did you see in this 8-unit property?
Chris: What I loved about this one was the area that it was located. The town that it’s located just has very strong rent potential and rent growth and just a very nice economy around it. And the rents were way below market, and I knew that if we did a little bit of work to them, we could bring things up to market level.
Peter: Let’s talk about this. Rents below the market. So, give me an example of what they were and what you brought them up to.
Chris: Sure. Some of them are a little bit different, but I would say our rents were somewhere between $700 and $850 upon purchasing – all 2 bedroom, 1 bath. Now our rents are between $1350 and $1425 across the board.
Peter: Amazing, and this took you a couple of years to do, right? I just want everyone to realize that these jumps are not automatic. Chris had to do a lot of research, work with contractors, and work with the property management company to make sure that the rents are achievable and then execute. It takes a couple of years to create this type of value.
Chris: Sure, and one thing with this one, it took a little time to get the rents up. Some we were able to move quickly, and some took a little bit longer, but we had to do more immediate renovations on this project versus the others. However, through your coaching I was able to get a renovation budget that was looped into the loan, so that was helpful from day one. We had a plan on what we were renovating and how much we were going to spend and all of that was wrapped into our loan. So, that was a major benefit or something that I didn’t know how to do on the first two properties. Come property number three, I understood what to ask for, how to ask for it, and I was able to move things along a little bit quicker.
Peter: So, on this 8-unit, the lender gave you money to acquire the property, plus gave you money to do the complete renovation.
Chris: That’s correct and because we were doing renovations in the plan within the first 6 months, they offered 18 months interest only. So, we’re able to get that as well.
Peter: And I guess to add the cherry on top, you really didn’t put that much money in on the down payment. Your investor came in, put in almost the whole thing. Is that right?
Chris: That’s correct.
Peter: Yeah, that’s how you do it, Chris. That’s awesome. So, on this 8-unit property, you bought it for $725,000. What is it worth today?
Chris: Right now, it’s about $1.35 million.
Peter: Amazing. Oh, one thing we didn’t touch on is your 20-pad Mobile Home Park, you bought it for $1,000,080, and we were with you the entire way. We did lot of work over the course of almost three years, getting the rents up and getting it stabilized. What is it worth today?
Chris: I’d say between $2.1 and $2.2 million.
From Burn Out to Financial Freedom
Peter: I did the math before this call, just adding up everything in our accounting system. And it appears that your net worth, from what they’re worth to what you owe, we’re about $3.374 million over three years!
Chris: Yeah. It’s wild.
Peter: You’re engrossed in it every single day. I’m not, I’m the outside looking in. I get to oversee your actions, but yeah, you get to experience the freedom of labor. So, congratulations on this.
Chris: Thank you very much.
Peter: You’re welcome. So, with this $3.374 million net worth, you’re a millionaire multiple times over. Has that changed your perspective on life at all? What has it bought you?
Chris: I would say it’s just bought me a lot more time. It’s kind of a generic answer, but it’s given me time in a lot of different ways. It’s given me time to travel. After selling the businesses, it’s given me time to get into the real estate business. It’s given me time to spend time with family, to see friends, take small vacations, big vacations.
Also, it’s allowed me to really have time for myself, for personal growth. I have a lot of different goals and ideas and things that I want to engage in and be involved in. So, it’s allowed me time to work on different projects or work on different things for self improvement. So that would be one of the biggest things, just giving me a lot of time and peace of mind doing them.
Peter: Chris, I’ll never forget I got a call from you, maybe you remember the call where you said, “Peter, what do I do with my free time now?” Do you remember that call?
Chris: I do! It seems silly now, but I had all this time, and I felt like, I had to use it well. But that was my question to you because I had a lot more than I was used to.
Reinvestment Plans
Peter: And immediately I thought, wow, this is why he joined the program was to get his time back. And now he’s asking me, how do I maximize the time I have now? So, you have a big cash out refi event happening, this week or next week. What do you plan on doing with it, reinvesting?
Chris: Yeah, majority will be reinvesting. You know, once we’ve finished everything up, which should be in the next day or two, I’ll be sitting down with you, sitting down with my coaches and looking at what I have to work with and setting some new goals. So, I plan to reinvest in the areas that I currently am and see if I can grow. That’s the main thing, although I’m sure I’ll use some for maybe a trip. I have some ideas, some fun things as well, but a big portion will be towards reinvesting and doing it again.
Words of Wisdom from Chris
Peter: What pearls of wisdom could you share with someone who is wanting to jump into this business and do what you just did, what would you tell him?
#1: Find a Mentor
Chris: First thing that I would say would be to get some coaching, to get a mentor. That would be number one. It was the most important thing for me. It’s allowed me to be able to learn a lot, to take my time and to be taught the correct ways to do things; just learn about something I knew nothing about.
So, it really increased the speed of my knowledge base for commercial real estate. I would say getting a mentor and then, in that same breath, it’s given me confidence. It’s helped me avoid pitfalls, but it’s given me confidence to continue to move forward. You know, I believe I have a lot of capacity to do a lot of things. I believe all people do. And by having a coach and a mentor, it really helped me to set accurate goals and then step by step, accomplish them. So that’s been the biggest thing for me.
Ask Questions and Leverage Knowledge
Peter: That’s great. And Chris, I do have to say that when you first joined the program, I go, “Wow, this guy sent to me 20 questions a day!” And I love it. That means you’re hungry and we’re here to feed you.
Chris: Yeah. Yeah.
Peter: That’s what it takes, right? When you invest in our coaching program, we invest back into you, and we want this mutual agreement to be beneficial to all. You work hard, we work hard, and we get these results. That’s the way it works.
Chris: Absolutely. You know, I remember, I do ask a lot of questions and definitely a lot up front. And you all have been so great at always getting back to me and helping me think through things. That’s been my favorite part or most valuable part. I always felt confident that I could get the answers that I needed. And if you don’t, you’d help me get them or help me figure them out.
Peter: Yeah. Chris, how we see it is that, when a person comes off the street like you and wants our help, we realize they’re about to make their largest financial decision ever in their lives. So, we need to be with you and understand that you’re trying to do it safely and be successful. We take it very seriously. So, when you’re asking any type of question, we take seriously that you actually don’t know, and you can see that our answers are structured in a way to make sure that this is completely settled.
Chris: Absolutely. Yeah, you all are extremely thorough, which is something that I look for. You definitely kept your end of the bargain. Cause like you said, it’s a big jump. Some bigger than others, but to be able to have confidence that you have my back 100%, then, now, and for things to come, just gives me a lot of security, a lot of confidence.
#2: Build Strong Relationships
Peter: Great. So that was Chris’s pearl of wisdom number one. Do you have a second one to share?
Chris: I would say really work on building relationships within this business. And it sounds generic, but what I mean is, if you’re looking for property management, or if you’re currently in the business and you have property management, really building strong relationships to make sure that they understand you and what your needs are; and that you understand how you can be the best client for them. I think it’s important that you work together, and you find people to be part of your team. Just as my coaches are my leaders and my coaches, but they’re also my teammate. I want to do well; for them, with them and I want other people that I work with to do the same.
So, that’s important. It’s been important for me with my management, with my coaches, with some of the off-market properties that I purchased. I still stay in contact with the people that I bought them from because they are longtime owners. They’re older people with more wisdom and more property, so I still communicate with them if I have a question or need advice and they’re happy to do so. I think that’s something to really put time and energy and effort into. And it’s much more enjoyable that way for me as well.
Peter: When you think about it, Chris, your first two deals with us, you closed on the same day basically, your mobile home park and your apartment building. Two different owners and you have phenomenal relationships with both sets of property owners. And they actually wanted to work with you, right? They had choices and they wanted to work with you because you nurtured and honored the relationship. Then, the middle of all this, you were able to work for property management, a couple of them that we fired, it’s part of the business, but now you have great property management that takes care of the property so you can travel.
Then on your third deal, your small multifamily, that one was on the market, and you were able to convince that agent amongst all the other bidders to work with you. So, this is evidence of how important these relationships are in this business. It’s not how much money you have, it’s your ability to get people to like you and respect you and you honor them on the other side.
Chris: Yeah, absolutely.
Peter: Chris, I just want to say thank you for sharing this inspiring story. How you went from, I think your net worth was somewhere around $500,000 or $600,000 when you first joined and now it’s $3.374 million in just three years. Phenomenal job, going from a burned-out franchise owner to multifamily multimillionaire.
The Importance of Coaching
Chris: And thank you and thank your team, for teaching me, coaching me and supporting me. It’s made all the difference and it’s been a major jump and improvement or enhancement of my life over the last few years. I’m thankful that I joined your program. I did my due diligence, but things can still go wrong. They did not and you guys have held up your end of the bargain. I’m truly appreciative.
Peter: You’re so welcome.
Overcoming Mental Barriers
As a coach, I understand you may be asking yourself, “Why can’t I do what Chris just did?” It’s all part of a mental game. Success, whether in life or commercial real estate, is fundamentally a mental endeavor. You might find yourself thinking, “I don’t think I can do what Chris just did,” or maybe, “I don’t know how to do what Chris did.” One of the most significant barriers to success is fear of the unknown. You’re likely hesitant to leave the familiar behind. This hesitation acts as a massive blocker to your potential success! You must overcome these mental barriers of self-doubt, lack of knowledge, or fear of the unknown to be successful in commercial real estate.
Over the years, we have guided our students to overcome these mental challenges and achieve the same successes as Chris. We invite you to reach out and learn how to navigate this mental game. Text PETER to 833-942-4516 to explore what’s on your mind and address these mental hurdles together.
Every Successful Multifamily Millionaire Has a Mentor
By following Chris’s path, guided by our team at Commercial Property Advisors, you too can find financial freedom, closing the gap between where you are now and where you want to be. Conquer your mental hurdles, learn the ropes, and take a step toward becoming a multifamily millionaire. Apply here and get mentored by me and my team: Commercial Property Advisors Protege Program
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