I Bought a 10 Unit Apartment for $16,000!!!

what's going on guys so today we are going over my most profitable deal ever you do not want to miss out [Music] all right so obviously this isn't my prettiest deal but it is the most profitable so what's rule number one then really matter how pretty it is all that comes down to and flipping and investing is the numbers let me give you a little brief rundown of what exactly you're looking at so this is a 10 unit apartment that I bought about two years ago we are doing some direct marketing just for single-family homes and one of the sellers goes to us and they say hey I don't want to sell that home but I do have this 10 unit apartment if you guys are interested in that we weren't apartment investors but I always trained my guys when there's an opportunity say yes we will figure it out in the meantime so that's rule number two of this video is even if you don't know how to do something you can figure it out don't just say I can't do it if I would have had that attitude I would not have been able to get this deal he tells us go take a look at it tell me what you think so when I looked at this place two years ago it doesn't look like anything special right now but this is like super nice compared to what it was when I came here there was cars everywhere people were selling drugs people were selling a K machine guns I'm pretty sure someone probably murdered their mom in here I have no idea but there's rumors on top of that I couldn't get inside because everything was locked they didn't want anyone getting in the owner had said that he hadn't gotten rent in three years so I'm pretty much buying this blind I can't get in any of the units there's a whole bunch of mischief going on I wouldn't even want to go in there even if I could and then I was walking around the perimeter and I noticed there was some smoke above one of the windows we ended up peeking our head in there to our surprise one of the whole units was burned down [Music] so I reported back my findings to the seller and I said I don't think you realize how bad this is he's out of state in LA older guy owned it cash yeah he wasn't getting rent but it's not like it was costing him a ton of money so he didn't really care that much at this point as I said I wasn't an apartment guy I didn't know what it was worth I had an idea of what it would cost to fix it up because you know fixing up apartments and houses pretty similar so I asked him what do you want for it originally he had said he wanted four hundred to five hundred thousand I said okay I I honestly have no idea if that's a good deal or not so I did the best research I could looked on the tax records to see what other ten units have sold around here a ten unit apartment isn't a very common thing so there wasn't a lot of comparables that way but I did find one that had sold for $700,000 so at least gave me a little bit of a baseline so knowing that there was gonna be a whole bunch of headaches with this with the evicting people with fixing them up not knowing the condition of them I just told the guys said I give you $200,000 for it like if I'm gonna put in this work this thing could be hundreds of thousands of dollars in rehab I mean if this one sold for 700 this thing really cheap to make it worthwhile and he told me he said no to hundreds way too low no way I take that so we negotiated for months he had said that he wanted to come and fix it himself and I said sir no disrespect you're like 70 years old living in LA there's no way you are gonna be able to get these people out and fix him up and do all that from LA and he's pretty stubborn guy he's an entrepreneur too and he said well I'm gonna move to Vegas I'm gonna go do it myself I'm gonna go kick out all that riffraff for you know not paying and doing all the things they're doing I said dude you might die doing it yourself I said you've had all this success your whole life you've built up pretty good wealth why would you put yourself through that you know at the end of your life you should be retired right now you know eventually after a couple of months negotiating we finally came up with a deal that worked for both parties so during that time I ended up recommending to him a seller finance option and so with seller finance it works out for both of us because for me I could buy this without having to go get a loan and for him he wasn't making money on this anyway so he might as well make some money from me getting a guaranteed payment but I knew that I wouldn't be making money on this for a long time I knew it was gonna take me a while to evict everyone and I knew it was gonna take me a while to renovate them all I told him I go hey if we're gonna do this I need some time to not make payments he understood he was totally cool with it so here's the deal we worked out I ended up getting in for $300,000 I only had to put $16,000 down and that was essentially to pay off all his back due taxes that he owed on it and I negotiated a 10-year seller financed now the first three years of that I didn't have to make any payments at all and then the next seven years my payments were only 1250 a month on a 10 unit apartment let that sink in I'm standing in what used to be a pool we didn't fill this up he ended up doing it a while back foot there used to be a pool right here which makes absolutely no sense with a 10 unit apartment there's no way you could justify the cost of having a pool with only 10 units so once we agreed on everything getting him the sign was also difficult because he's older guy he didn't want to do electronic signature and I knew it was a big deal so I wanted to make sure everything went smooth so I drove down to LA personally to go get him to sign and he was being very non-responsive on the way there and I wasn't sure if he was gonna show up or not but he did we built good rapport and we signed the contract and around mid 2018 I bought my first apartment so the first thing that I had to do with this apartment was get rid everyone nobody was paying rent nobody had a lease illegal things going on in here it was bad news we ended up serving everyone eviction --zz it took about six months to finally get everyone out of here because what would happen was we do vicked somebody illegally and then they go and move into a different apartment and then we had to go in and victim again it's crazy how the law works but that was what we had to do it's ridiculous after six months we finally got everyone out of here once we got everyone out then we had to go assess the damage done to all the units and surprisingly they weren't that bad of shape I was actually really surprised you got to remember this part of town isn't the best area you don't need like this lavish unit all the units had some tile flooring that was in pretty good shape so we ended up keeping the tile this brown paint we ended up just keeping it doesn't really affect the rent one way or another so it doesn't look great but they're all fully rented so it doesn't really matter in some of the unit's the showers they were just fine so a lot of the time all we had to do was paint and do the kitchen so it actually wasn't as bad as I thought so that was good I wanted to get all of the units that were closest to being ready done first so we could start making money on them get this place occupied and that's exactly what we did the cool thing that happened was a missionary from Africa needed a place to stay and I just so happened to be finishing up our first unit I wanted to do something cool for them and help them out because they needed a place so I let him stay in that very first unit help them out and it also puts somebody that I know and trusted in here you know while we were getting everything complete so it was a blessing all the way around we actually finally just moved him into a different place you can find that video right here or in the description below that was an amazing thing to give them but yeah let me show you one of the unit's right now [Music] so this is what the majority of them look like now it's a little dusty because this is actually the last unit that we're renovating I saved the fire damage unit for last because I knew it was gonna be the most rehab the biggest headache and so we have the other nine units already rented this is the only one that hasn't been rented but we were able to do a lot of the rehab you can already see the kitchens done this is the original tile flooring that all the units had so I just kept it this is actually where the fire was so this is the last piece that we need to get approved by the city so this one that we're in is a two-bedroom unit there's one other two-bedroom and then the other eight or one-bedroom units to break down the numbers on this the two bedrooms rent from anywhere from 800 to 900 that's market and the one bedrooms go for about 700 so with all ten of them rented out this will be the last one we are looking at over $7,000 in rent and remember I don't have a payment for three years all of that goes directly to me my only expenses would be the property manager taxes insurance and then any repairs we gotta make but the beauty is we've pretty much repaired all the units before we rented them out so there shouldn't be a ton another thing I like to do in all my rentals is put tile or LVT in them I don't like any carpet because it has to get replaced all the time hard flooring is the best way to go [Music] here's where we stand at the time of this filming I've owned this for about two years we've got nine of the unit's rented out the last one will get rented out once the city approves the final repairs we'll be getting over seven thousand a month in rent I've got one more year of no payments at all and then the next seven years my payment is only twelve fifty a month as far as renovation goes we've kind of just done it as we've gone along with it and we spin around $200,000 renovating all the units a C's permits all that stuff as of now the apartment is worth around a million dollars I've done way more research since I bought it I know commercial a little bit better and I've talked to others about it so if you want to look at it in the big picture we paid three hundred thousand for it we've put about two hundred thousand into it and it's worth a million if I were to sell this today I profit over half a million dollars when you count all the cash flow that we've gotten all these months and if I hold this for a long time all that cash flow will just continue to add to our profit that's why this is my best deal ever I don't have many deals where we make half a million dollars we get to go help people and change lives we get to go clean up the community this is a huge win all the way around thanks for watching guys if you like this video and you want more content on seller financing I need you to hit the like button and I need you hit the subscribe button you do those two things I'm gonna make more content for you guys to learn how to get more deals just like that one that I got also make sure you follow me on all my social channels I'm very active on there you can see the day-to-day life of being a real estate investor and make sure you comment below on the different types of videos that you want to see I'm trying to put out as much content as I can so I don't know what you guys want to see unless you guys leave a comment and until next time take care Oh

Channel: Ryan Pineda

Views: 408,965

Keywords: real estate, house flipper, cash flow, financial freedom, entrepreneur, las vegas, future flipper, house flipping, rental properties, passive income, real estate investor, real estate investing, wholesaling real estate, ryan pineda, graham stephan, meet kevin, max maxwell, bigger pockets, garyvee, tai lopez, grant cardone, purchase apartment building, multifamily, multi family, apartment investing, apartment investing for beginners, multifamily real estate investing

Id: TWErmPVT4TE

Length: 10min 48sec (648 seconds)

Published: Wed Jul 01 2020