He Bought 58 Rental Units in Just 4 Years by Solving Other Landlords’ Problems

0:00When the Great Recession hit, Andy Gil's business went under. The future he thought he'd created disappeared overnight. And the fear of being in that position ever again became his new obsession. So he grinded. He hustled. He faced major setbacks along the way. And in 2022, he got serious about real estate investing. While most people around him upgraded their lifestyles, Andy took extreme measures. He downsized his house. he drove old used cars, and he pinched pennies so he could funnel every extra dollar he had toward buying rental properties. Most investors aren't making these types of sacrifices.

0:40But for Andy, it was a temporary trade-off for a more secure financial future. And it is already paying off. In just four years, he's scaled to 58 rental units and counting, and he's done it all in today's high interest rate environment without a super high paying job. In many ways, Andy is just the average investor, but he also knows his superpower. He uses his creativity to cut through the noise, to spot opportunities that fly under most buyers' radar, and he solves problems for hesitant sellers. Today, he's even gonna pull back the curtain on a genius strategy you've probably never heard of, but it's one that helped him take down a 30-unit property with very little of his own money.

1:32What's up, friends? I'm Dave Meyer, Chief Investment Officer at BiggerPockets. Today on the show, we have Andy Gill, an investor in Connecticut who was previously on episode 803 back in August of 2023. And he's also been one of our most popular speakers at BPCon the last few years. So excited he's going to be back on the show and hear what he's been up to. Let's bring him on. Andy, welcome back to the BiggerPockets podcast. So good to have you here, man. Thank you. I'm always flattered to be asked and always pinch myself a little bit that I get these opportunities. Well, it's always great to have you here, Andy.

2:08This should be a lot of fun. You have been on the show before, but for people who haven't heard your previous episodes or didn't attend your wildly popular session at BP Con last year. Tell us just a little bit about yourself, where you are in the country and what you do in real estate. So my name is Andy Gill. I am on the East Coast in Connecticut, directly between Boston and New York. And we own and operate a portfolio of about 58 apartments currently, all within about 30 minutes of our house. So I'm also a contractor and we're building new homes, new renovations. I've been doing that for basically my whole adult career, so 25 years, but I didn't start buying real estate.

2:50I didn't understand that owning the asset was the goal until about five years ago. So we've been in about four years. Oh, wow. Okay. So you were just doing contractor work for other people, homeowners, real estate investors, I assume, for 20 years. What clicked? What happened that made you realize now is the time for me to start trying to hold on to these assets. I had a really bad business experience that I learned a ton from that taught me that I didn't understand finance and I didn't understand a P &L. I didn't understand any of that. And so I had to get smart. And so and then I had another opportunity, another mentor and learned how to manage.

3:31If you can't measure it, you can't manage it. And so being able to project costs and walk it in. And after I kind of developed those skills and people skills, I realized that owning the asset, not just improving it, was the path. So we started looking for flips, and that didn't work out. And our first purchase was 12 condos here in Connecticut. So you just went for it? Went for it. I got a partner to go 50-50. And yeah, my contracting career, being able to do rinse-repeat work, 12 identical condos spoke to me. So I could understand. And once I understood one, I understood them all. So regarding the tenants, understanding how rent would move, what the improvements would be, how all that stuff, I was comfortable with that.

4:14So we jumped in the deep end. What does your portfolio look like now? So we have 58 apartments in various different structures. Amazing. Some we own ourselves, some we own single partners. And we got into a 12 family with two other partners. And they're all spread. they go as high as Putnam area in Connecticut and low as about Norwich in New London County. And so we manage all of those but 12. That's a lot. That's scaling quickly, 58. How did you finance it? Sounds like with partners, but did you have money saved up from contracting? I grew up pretty with limited means and early in my marriage, we didn't have a lot.

4:52And my son has cystic fibrosis, which is heavy heavy financial implications. And so it took us a while. And I took a real hard hit with that business loss during the Great Recession. So it took a while to, and we learned to live below our means. And then slowly we realized that we were starting to save. And so we stayed minimal and we drove used cars and we moved to a smaller home. And then we had a little bit of cash and we were able to get in with a partner and learned commercial financing. And so that was originally how we went in. We bought, got a commercial loan with a five-year arm and it was a value add.

5:29And, um, and we created quite a bit of equity in that just by coming in and stabilizing the property. And then we were able to move some of that equity into other deals. But along the way, like once you prove you can do the thing, so if you stay, uh, singularly focused on what you're great at, then people will loan to you. Most of all the financing we do now, or most of the loans we get now are private. And so we'll talk about this deal that we have taken down over the last 18 months and will continue. So like a three-year plan is privately financed. We're going to turn our attention and talk about this awesome, very cool, unique deal that Andy is doing that I'm very eager to hear about.

6:08But I just want to ask you a little bit about that financial sacrifice you made. You said you downgraded, you live below your means. how did that impact your ability to be a real estate investor? And how do you look back on it now? Like, was it a big sacrifice? It sounds like it was worth it, right? Yes, it certainly was worth it. At the time, I think it was more out of fear at the time. Like I didn't, I was afraid of debt. And so, and now I'm, you know, debt being good versus bad and how you define that is, you know, different for everyone. But I really just wanted to, I didn't want to owe anyone anything.

6:43And so living below our means was freedom for us. So I didn't want to have to work to pay for a car that other people viewed as us being well off. Like it didn't mean, that didn't mean anything to me. Good. So we downsized the, you know, we downsized the house and I raised my two kids in an 800 square foot house. It was still, you know, 850 square foot house. And we're still here now. And so was it a sacrifice? I mean, I guess, but it was the way, it was how I felt safe was at that time. And then I realized that we were growing a net worth with equity and savings. And then when that was, when it was appropriate, then we shifted that into investments.

7:28So yeah, I think that living below your means, I think understanding what your overhead is and everyone should look at their personal, you know, their personal as overhead and being able to clear that. And I don't mean everyone. Not everyone has the ability to do that. But if you do have the ability to live below your means, you should. You mentor a lot of people, right? You talk to a lot of real estate investors. Do you find a lot of people are willing to do this to sort of reduce their lifestyle, even if it's just temporary, to pursue real estate? I don't think everyone sees the value. From a social media high level, okay, this is the life.

8:04If you buy these things, people pay rent and you make money, lots of money, but you know, it's not passive. So when you start talking about what it actually takes and the amount of grind and the different steps, like, so to get through acquisition is a marathon and then you start and then you meet your tenants and then you have to figure out how to screen tenants and collect rent and do maintenance and what value add you should do and how do you do all this stuff. So there's a ton of education with it, but a lot of people do not follow through or, you know, they don't see the value in it. And so you really have to, I think you really have to want it.

8:36And I think that you have to dig in and put some of your wants and desires in the parking lot for later. Yeah, I think that that is true. It can become passive, but it can't be passive up front. Like if that's what you want, you either have to be already really rich, right? And so you can go and like be a lender or go invest in syndications or something, or you should just invest in the stock market. It's very difficult to say, I simultaneously want an avenue, a path to accelerate my financial situation that's better than every other option out there, like real estate, I believe it is. But I also don't want to do anything.

9:18That is a really hard thing to ask for, unless you are fortunate and are already really wealthy. And I just think not everyone has to downsize their house or drive a used car, but like, you got to find something that you're willing to give up to, to pursue it. Right. It's not free. You have to put something into it. Uh, and I, I, I've found a lot of younger people are willing to do what you're talking about. Like when I started, I was 22. I lived in my friend's grandma's basement for three years. I didn't even think twice about it. It was fine. I was like, yeah, whatever it's a bed. Uh, but I do think doing it at the age you're at when you had kids is something that I hear of less.

9:59How long ago was that? We're in our fifth year now. You know, it's a - Fifth year? Yeah. Yeah. We started, I'll be 49 this year. So I was 44 when we bought our, I mean, we'd done flips earlier. It had been a contractor a long time, but the first buy and hold, I was 44. Wow. And so five years later, I would assume with what you're telling me, financial situation trajectory has completely changed by making those sacrifices about your lifestyle, but also putting in a lot of work and just sticking with it. Yeah. It's, you know, I didn't have a 401k. I didn't like, we were just paying for, you know, trying to pay more, just keep, you know, keep putting the table.

10:35And so I knew I had to do something. And so we, you know, we went for it and I didn't know it was going to go. I didn't know I was going to get in when it was still going up. You know, interest rates were already spiking. And, um, you know, I didn't think it was going to be like this, but, um, but I had a belief in myself, like my, I was got good at something and I pay, I identified the specific metrics that I needed to be like monitor and watch. And it's gone, it's gone well. And now when we buy things like we have a good plan and, um, you know, we go to execute it, but if it doesn't go as well, you know, we know when to, to let it go.

11:07Well, awesome. Good for you, man. I I love hearing your story. It's super inspiring and relatable. It's something that really everyone can do. And I'm just happy for you and all the success you've had. Thank you, man. But you haven't stopped, obviously. And you told me you're doing a really cool, interesting deal that's going to really expand your portfolio. And I want to dig into that, but we've got to take a quick break. We'll be right back. Investing in real estate has always been smart, but it hasn't always been simple. Now it's both, thanks to the Fundrise Flagship Fund. The Fundrise Flagship Fund launched more than five years ago with a mission of delivering low-fee access to blue-chip private market real estate.

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15:18Welcome back to the BiggerPockets podcast. I'm here with investor Andy Gill. Before the break, We talked a little bit about Andy's background and how he got to where he is today with a sizable portfolio in Connecticut. But Andy, last time you were on the show, you said, I think you told us that you were ready to do something new, but you didn't know exactly what it was going to be. Now you know what it is, right? So tell us about it. Yeah. So I had an idea. I figured that if I could take under management of properties that I didn't yet own in older landlords that I knew would be selling that were a bit frustrated, I'd be already controlling the property and be able to be in the first position to make an offer and acquire that property.

16:00So I sent out a bunch of mailers that I designed with AI and they were really cool. And it basically said like, being a landlord sucks, you should sell to me. Something along those lines, I don't remember. It was like cartoons and stuff. And I hit one of my longtime friends and builders that I didn't know owned properties, or I forgot that owned a bunch of apartments. So we talked and I was like, well, you know, he's like, my wife is all over me. She wants me to sell. She wants to travel more, blah, blah, blah. And I've been working with this guy for 20 years. Fast forward a year. And then he's like, I think I'm ready to start talking to you about that.

16:32And so we kind of curated this deal where he didn't want to pay the capital gains. and he wanted to be careful about the depreciation of capture, but he bought a long time ago, so it was pretty minimal. And so I created a proposal where we would transfer properties to me staged over time and he would hold the note and we'd put a small amount down, but I wanted to manage them upfront right away so I could see under the hood and get comfortable just because we had limited capital to take on something this big without partners. So we started doing that And it took a while, it took a year to put all together.

17:07And it was a phased acquisition where we bought some, managed others, and then over time transferred the rest of those into our ownership, into our portfolio. So we're about halfway through that now. And plans of transferring the remainder in the coming 12 months, I guess. Wow. This is very cool. All right. I really, we got to talk about this and dig into this. So first and foremost, your thought was, if I basically become a property manager for other landlords, I assume you can make some money in it. But you weren't really doing it for that. You were doing it for deal flow. As those landlords potentially want to sell and offload, they're going to come to you first and you'll have early access.

17:54I love that strategy. Did someone tell you to do that or did you just think of that on your own? No, that was me. That was my thought process. Wow. It's genius. Thank you. Yeah. Don't tell anyone about it, all right? Yes. Tens of thousands of people are about to hear that idea and copy you. It is. I mean, but it really comes down to like, would these people hold financing for others? Well, you need to develop the skills so that they would. Yeah. You know, like it's, and so yes, they will if you prove yourself, if you add value. So I take care of problems and I let that be known. And it has become more safe to transfer it to me than anything else as time has gone on.

18:35I love that strategy. It makes so much sense. So tell me about the mailers. Because a lot of people send mailers. I, as a landlord, get all of them all the time from wholesalers and people want to buy my properties. What were you saying that was different than just a normal mailer that goes out? You want to be relatable and approachable in the real world as well as in the perceived world. so I designed a you know a cartoon character and of myself and what I do and I use so I use all the images of like I wear flannels I'm a I'm a very uh tactile hands-on person I do my own lawn mowing and snow removal as much as I can not you know I have to hire a lot of it out but I'm very hands-on so I wanted to relay that and who I am and what I do and it worked like I had a it was like a flannel and a tool tool belt and a dog and you know and and uh and a pickup truck and And it basically said, like, I'm a landlord too.

19:26It sucks. It sucks. You're probably done. I get it. Yeah. You know, people call you and it must be annoying. It must suck. You should sell to me. Do you actually think being a landlord sucks? No, I love it. I actually love it. I don't either. I don't think it sucks. Like, all these things are like, oh, being a landlord stinks. Do passive. I'm like, really? Like, there are annoying parts, but there's an annoying part of every job. Like, it's just, yeah. Okay. But you're selling it. So, like, I get it. And, you know, if you're, especially too, if you're hitting someone who's been a landlord for 30 years, maybe they're over it.

19:59And that, that I could see. And you're, you're fresh, man. You're five years in. So yeah, you're ready to go. Yeah. Yeah. 49 year old fresh legs, but yeah. Super fresh. Yeah. So, and it worked and, you know, it worked. I got a bunch of calls. I actually got a bunch of calls in that, that one mailer. I think we sent out like 600 mailers or something like that. And I got a hundred calls. Wow. What? That's very cool. I just want to say, too, because you're a big AI user, and we're going to talk about that in a little bit. But I just like that you used AI to be unique and an individual. Because I think if you just go on and use AI and use the template, like you said, that anyone else uses, you're not standing out.

20:44It's no different than just hiring another company to do it. But you sat down and thought about, like, who am I? How can I showcase myself? and then you use AI to do the execution. That, to me, I assume you attribute the success of that mailing campaign and this response rate you got to just by doing something a little bit different. I did a follow-up to that too with like a handwritten, like a, well, it's quasi-handwritten letter. And it said, being a landlord, I got scratch and sniff Snickers of like dead fish. And I put them in a... It's the most New England thing I've ever heard. Yeah, I did.

21:18I bought them on Amazon. And it was like, yeah, scratch and sniff stickers. Well, okay. All right. So anyway, your friend, this guy you know, he calls you. How big is his portfolio? 30 units. 30 units. It's a mixed spread. Yeah, it's spread out over seven properties. Okay. Close, like in your target area. He's been doing this for a while. It sounds like his wife wants to travel, but he doesn't want to sell it today, right? And it sounds like you didn't want to buy it today. I mean, I would have had to bring in partners, so I didn't have the cash to take this hole down all at once. without giving up significant equity, which would have been fine too, but he didn't want that.

21:52And so what's the structure? Let's walk through it. You figured out a way you take over management. That was the first step? Yep. So it was two contracts. So the first would be a management contract for duration of time. The second contract would be for the purchase and sales. Okay. Yeah. Did you agree on prices for the sale up front or was it just kind of like a right of first refusal where if he decided to go sell, you had the first shot at buying it and making it off. Yeah, so the first one, we did the appraisals and it went based on that. The remaining ones were with prices to be agreed upon at the current market.

22:30We actually just agreed on a per unit price because we're like, let's stop paying for appraisals. So you just basically said, you have 30 units, I'm going to pay you, I'm going to make up a number, $100 ,000 a unit, and we're not going to go and get eight appraisals right now. Right. Because then you're like, it's fine. You win some, you lose some, you know, but it's a summer three beds, summer two beds, summer in better areas than others. But you know, if you're taking the whole thing, it made sense. Well, I imagine a big part of the appeal of this to the seller is simplicity. He doesn't want to spend, you know, half of his days right now with appraisers and title agencies and like, make it simple.

23:08And so how far are you into this deal structure? We're about halfway, yeah. So you've been managing the properties for how long? Coming up on a year now. Okay. Yep. It'll be a year soon. And we've transferred three of the seven properties. Okay. And we're working towards the remainder. Yeah. Awesome. That is so cool. And how are you feeling about the structure? Is it working well for you? It works really well. And in that, like for management, it works really well. Because I'm already in control of the property completely. I already know the tenants. I already know what the problems are. I already know.

23:42I'm already collecting rent. So essentially, I basically just go into rent ready and move it from his account to mine. And do you think the seller's happy with the arrangement too? He loves it. He loves it. He actually, so he's a builder also. And so now we're talking about going into development because as he wants to retire, he wants to stay involved and doesn't actually want to retire. He wants to work less. So we're talking about developing other rental properties. There's a thing called an 830G here, affordable housing. And so he's getting into that developments where we can essentially disregard the zoning regulations and increase density.

24:19So he's into that. So we're working on some developments that we would partner on also. So we get along really, really well. He's an awesome guy. That's so great. Did you follow up with other investors who responded to your mailer? Or once you found this, was that sufficient? I did. There were some in, but they all were just like every other, you know, that you get a call from a postcard, right? So they're, you know, some of them, Hey, maybe later or whatever. And so I was keeping a spreadsheet, but then once we got into this, I was like, this is all I can, I've bitten more than I can chew right now.

24:47So we need to stagger this. So I hadn't, I basically stopped. Yeah. I don't really chase down, I don't chase down any deals. I get phone calls on them a lot. Um, and so stuff that, you know, once you, once you, if you singularly focus on being good at something, you'll, you will get referrals and things will come your way as you develop and grow. That is such good advice and so true. You don't have to be good at everything in real estate, but if you can be good at one thing and people can count on you for that one thing, it's going to help your career. Well, congrats, Andy. It's super cool. I love the approach that you're taking here.