Taking Real Estate Investing to the Next Level: How the Pros Do it
With Ed Rogan, Co-Founder
So Percy and I live in the same neighborhood right now so we both live in Philadelphia area and we live in a town called Collegeville, which is about 20 minutes outside of Philly. When I started doing my journey and introduction into real estate, one of the first places I went to get acclimated from my Google search on learning about it was bigger pockets, which is if you're not familiar, it's a social media site for real estate people who are interested in real estate. So I went in there and I found out, you could see where people are from and everything. And I came across Percy, couple of his posts, saw that he was from the same town as me so I reached out to him with a private message there and we got to meet up a couple times. We had a couple of discussions, he told me a little bit about what he was doing. I was telling him what I was looking to do. And, we had about two or three meetings, by the third meeting I had actual deal that I came across because at this time I was calling owners directly and I had found a guy who was interested in selling. And he sent me the financials to his deal, you know, so I had the actual rent roll and PNL that I had done over. And I said, hey, listen, here's a deal that I was able to get out of market direct with the seller. There's no brokers involved directly spoke to the managing partner of this of this deal and here's the financials. Here's the numbers. I crunched the numbers, came up with the back of the envelope valuation, and I said, are you interested in going forward and trying to put an offer here and and see if we can take this deal down? So he seemed intrigued an he was interested. So from there, we we never got that deal. It didn't work out but from there, kind of built momentum. So we found another deal and then another deal.
And the left at that time, I was still working at my job. He still was doing other things on the side. But we were both.
We had both had a passion for the business we were starting to get into. And at the time, it was more about investing in a deal. As an investor and just owning a property and getting it in return as an investor.
But I saw the bigger picture as I continued looking at these other firms out here, what I was trying to do was model the real successful companies out there. First deal was 124 units in Alvin, Texas. Town just south of Houston, in the suit in the Houston metro. 1979 vintage. We bought it when there was a fire while we were under contract that burned the building down. We lost 12 units and what happened was the we got a credit to the purchase price and the amount of our estimated repair costs to build that building back. So that was our first deal that we kind of went into those problems and then learned by a baptism, by fire. First having to deal with a closing where there was a fire in the interim and then two having to build back 12 units in addition to repositioning the tenant base, because that deal was owned by a mom and pop investor that managed it himself and they had great occupancy when we bought it, but there was a lot of bad debt. We were getting very poor economic occupancy right out of the gate. So we had to go through the process of re positioning the tenant base requalifying the tenants remarketing the property. Basically doing a full turnaround of the market reputation for the building. And it's really worked out well.
I'm very proud of that deal because we took a lot of negative feedback on that project. And a lot of people said it was, it wasn't a good deal and it was too far outside of Houston and we stood by our initial intuition that it was in a good market that is going to be seeing growth, that there's no new supply coming on and we felt that it was going. We really felt it was going to be a strong project because because of those those few metrics and it's turning out well, it's working out based on what we plan. We've been able to, you know, since we got over the hurdle of renovating, you know, the units and repositioning the tenant base. We've been up over ninety five percent now since the end of our, end of Q4 of year one and into Q1 of year, two. We've been up over ninety five percent. So and now going into the spring leasing season, we're putting an exterior coat of paint on and we're repaving and striping the parking lot to improve the curb appeal. I think that's going to be a huge have a huge impact on how well we hit this spring leasing season.
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