He Sold His Car to Buy His First Property: Now He Owns 40 Rentals!

0:00Brandon Turner:Today's guest owns 40 rental properties, producing thousands in monthly cash flow, and he's only been in real estate for a few years. Before real estate, Larry Guerguis thought he'd be spending the next 40 years of his life working on Wall Street. But one conversation with a regretful investment banker changed his trajectory and set him on a path toward financial freedom through real estate. Larry knew he wanted to buy rentals, but how? He was a college student living in California with no W-2 income, so he couldn't possibly buy a rental property, right? But Larry wasn't taking no for an answer.

0:37Brandon Turner:He sold his car, scrounged together a down payment, and bought a duplex in a Midwest market he could actually afford. Then, with proof of concept and a few hundred bucks lining his pocket each month, He moved to Cleveland, Ohio, where he has built a real estate portfolio of 40 single-family homes and counting. Today, he's sharing how he bought deal after deal without qualifying for traditional bank financing. From focusing on low-price but high cash flow rentals to locking in higher rents with Section 8 Investing. Landlord Larry has found a formula that really works today.

1:18Brandon Turner:what's going on everybody i'm henry washington co-host of the bigger pockets podcast and today we have an investor story with larry gerges you might know him as landlord larry on instagram and tiktok so let's bring him on lawrence gerges better known as landlord larry welcome to the bigger pockets podcast my friend thank you very much for having me appreciate it we like to start off by learning a little bit about who you are, what you do, and how you even got into real estate in the first place. My name is Larry or Lawrence. Some people call me Landlord Larry on the internet. I'm from California, Southern California.

1:53And I started investing in Section 8 real estate, particularly during my junior year in college. And I did take a big leap from Southern California from the people that are from there. They know it's a very nice place to live. And I moved to the Midwest to do it full time right after college. So thank God it's been a blessing to do it. And I've been doing it for a little over three years now. And it's been great.

2:16Brandon Turner:What even sparked the interest in real estate? Because college is not that path. No, college isn't that path. And it wasn't always real estate for me. It was originally investment banking. I thought I was going to be the typical finance bro. Finance bros. Yeah, that was going to be my path. Living in New York, working crazy hours. It's a pretty funny story. I was actually just out at the bars with friends during my junior year of college, my first semester. And like I said, I went to college in San Diego. It's a fun place to be. But we were at a bar and then we went to a pizza parlor right next to it.

2:51And there was some guy sitting next to me, looked a little down. He was just kind of on his own. And I was like, hey, bro, everything all right? And he was like, don't talk to me. I only get two weeks out of the year off. I was like, okay, what do you do by chance? And he was like, I'm in investment banking. Okay. Like, I'd love to talk to this guy. Okay. Let's, let's hear it. So I ended up talking to that guy in that piece of parlor. My friends leave for like an hour and a half. And he gave me some pointers. The thing that really stuck with me from that conversation, what he asked me if I loved money, you know, not liked, not enjoyed, you know, spending it loved.

3:27And I said, no, no, I don't love money. Money's great. I think everyone enjoys having a little bit more of that, but loving is something different. And I didn't love it. And he said, forget about investment banking. Forget about anything finance, because that's what you need to have to work these crazy hours. And you make great money, but he says he doesn't even have the time to spend it. And I was like, all right. So after that day, I was like, we're going to figure out this real estate stuff out before we graduate so that we have some sort of path coming out of college.

3:58Brandon Turner:All right. Okay. So you got tapped on the shoulder and you took it seriously. So how did you go from that moment to actually taking action and working towards your first deal? I ended up selling my car, my first car, and I sold it for around 16 grand. Okay. And I was like, listen, I don't need a car. I use one of the family. I have a family hammer down car from 2008. I still drive that car. I love that thing. And I was like, I'm going to sell this and we're going to figure out a down payment for something. So you didn't buy in San Diego. No, unfortunately that didn't, I didn't have the budget for it.

4:36You know, didn't buy in San Diego, didn't buy anywhere in California. Pretty much. I just, you know, went on Zillow, Redfin, all those websites. And I, and I put my budget in, I put like 70 grand max purchase price. And the States that came up were, you know, Ohio, Missouri, Illinois, like parts of Illinois, uh alabama all these you know midwestern southern states i was like okay so now now we're not investing you know in our home state we're gonna have to figure out management you know like for me it was like we're gonna figure this stuff as we get there as long as i get the ball rolling then you know i'm gonna make a mistake and even if i like you know buy a house like the loan payment on it's 400 bucks like that's a 400 monthly mistake that i'll figure out over 30 years So I ended up coming across a place called Peoria, Illinois.

5:21Oh, yeah. I've been there a couple of times. It's interesting. I didn't go there to look at the property. I pretty much just trusted some handyman I found on a Facebook group.

5:31Brandon Turner:Seems legit. I see no problem with this. Oh, yeah, yeah. Legit's the word we'll use. So yeah, I joined all the Facebook groups in the Peoria area. And I just found a handyman. And I was like, hey, man, I just need you to go look at this property and see if it's not awful. At the time, even if he told me things that were wrong with it, I wouldn't know. Like I said, I'm college finance. I don't know what a water heater was, none of that. So I pretty much just needed a thumbs up or thumbs down from him. He gave me a thumbs up. Don't know the reliability on that, but I took it. And I ended up buying that house.

6:07I put around $15 ,300 down. Purchase price was$70? $65. So you did a conventional mortgage? I did a DSCR because I don't have a W-2. I have no pay stubs, no income. So the only one I applied for was DSCR. And closing took forever. And even to get the pre-approval before took forever because I was looking for a lender that'd go down to that loan amount. And the place where I found it was actually bigger pockets. During class, I was scrolling through. You could even see my history. It's just like sub 100K loan amount DSCR. And I'm like, does anyone know like a lender. Finally got connected one and bought through him.

6:46Brandon Turner:One thing you said that I liked was you thought through what the fear was, the worst case scenario, right? What's the worst case scenario? I buy a house and my mortgage payment is 300 bucks. And if it doesn't go well, I'll just be stuck paying 300 bucks a month for a while. I can figure that out. When we break our fears down sometimes and we figure out, okay, well, what's the real consequence to the action that I'm taking, we sometimes realize that the fear is not that big of a deal. So I like that approach you took. And I want other people to do that. If you're stuck in a decision, break down your fears.

7:18Brandon Turner:What's the worst case scenario? And can you survive that worst case scenario? Can you get back on your feet and not compromise your family's well-being, the roof over your head? Those things are important. But if it's just like, yeah, I might lose some money, but I'll be okay. I don't know. You might want to rethink that calculated risk. Yeah, exactly. The other thing, you just started putting in your budget on the realtor to look for a place to invest. And you landed on this property in Peoria. So purchase price, 65-ish thousand. You put about 15 ,000 down. And you said it was fairly turnkey.

7:52Brandon Turner:So no renovations? Not much, no. I maybe put a couple hundred bucks and painted some walls and stuff like that. And then that's about it. And then you needed a tenant. How long did it take you to find one? I needed not any tenant. I needed the perfect tenant because I couldn't afford a non-payment. Otherwise, I wouldn't make the mortgage payment. It took me a couple months, to be honest. It wasn't immediate because I started advertising just on Zillow. And I was getting a bunch of people and I was kind of messing around for the first time with tenant screening websites. Which ones did I like? Which ones gave me the information I needed?

8:25I ended up just kind of thinking, I was like, okay, if I need a tenant that's going to pay me for sure, let's look into Section 8. Because I was like, okay, let's take a look at it. I mean, baseline, like if I sign this government paper, I should get paid rent, right? And I was like, okay, so like, let's start to, you know, advertise on affordable housing. Advertise on affordable housing, found a couple tenants. It's, you know, very light screening, like screening wasn't really good at all. And got one. How did it go? Was it a good tenant? So the tenant didn't end up paying anything. Her portion was nothing.

8:59As like a lot of people know, Section 8 does pay 70 % to 100 % or even less depending on the tenant's income. Her income was nothing. So I was getting 100 % from Section 8, which was pretty sick. And I was cool with that.

9:10Brandon Turner:So the government was your reliable tenant that you were looking for. Exactly. That's what I was saying. I was looking for the perfect tenant. The government never misses a payment. So yeah, no, I ended up getting around$1 ,400 in rent. Okay. And my payment was$480 something, which wasn't bad. No, that's pretty freaking awesome. Yeah, yeah, yeah. That's really good cash flow. I was like, this is sick, you know, and I'm still in my college dorm doing this. So, you know, like I got a little bit of, you know, party money. It's cool. I was like, you know, my roommates ain't doing this, right? So I was like, this is sick.

9:44This is sick. I'll, you know, I was like, but for me, like in reality, like that was the moment where, you know, it clicked. I was like, okay, this works. Proof of concept. Exactly. Proof of concept. Like this works. And like, obviously, one one house, 700, 600, a thousand, whatever net is not life changing. It's not going to do much for me. Right. Not much for anyone, especially like you live in California. But if I can manage to scale up, there you go.

10:08Brandon Turner:All right. Well, made a few mistakes, but you came out clean on the other side, got some cash flow. And if you're anything like me, once I got a taste of that proof of concept and it was working after my first deal, I was like, how do I do a lot more of these right now? Because I was ready to scale as soon as I did that first one. So I'm very curious what that meant to you. And we'll learn about that right after the break. Summer bookings sound great until someone slips by the pool, gets hurt on your dock, or damages your property during a long holiday weekend. A lot of short-term rental investors don't realize their standard policy may leave gaps when it comes to short-term rental activity.

10:50That's why investors use Steadily. They offer landlord insurance built for real estate investors, including short-term rentals. And if you're a BiggerPockets Pro member, you'll also get 5 % off your landlord insurance premiums. Visit biggerpockets.com slash landlord insurance to learn more.

11:07Brandon Turner:Here's a strategy that most W-2 employees have never heard of. Normally, if you want to write off a rental property against your regular income, you need real estate professional status. That means tracking hundreds of hours a year. Rent to retirement just launched a program that skips all of that. It's called the STR loophole tenant placement program. Here's how it works. You buy one of rent to retirement's class A new construction investment properties. You set up an Airbnb listing and self-manage it for the remainder of the year. Rent to retirement, then rents the home as a short-term rental to establish it as an STR for the year.

11:42Brandon Turner:No furnishing required, making this the easy button to save five or six figures in taxes this year. And because you're the sole manager, there's no hourly minimum to meet. That lets you use a cost segregation study to accelerate the depreciation and potentially write off over$100 ,000 against your income, even on your first rental. Add in cash back up to 13 % of the home price, which exceeds$60 ,000 on some properties. With this massive cash back incentives, investors are seeing total returns up to 126%. New construction, A-class properties, and inventory is limited. Learn more at biggerpockets.com slash retirement or text REI to 33777.

12:27Brandon Turner:Again, text REI to 33777. I just booked a trip to the coast, the kind where the morning starts slow and the air smells like salt and citrus. A few days to wander, eat something new every night, and remember why we love to travel in the first place. But while I'm away, an opportunity is available to me that may not immediately come to mind. My place doesn't have to sit empty while I'm gone. I can list it on Airbnb and bring in a little extra cash. And with the co-host network, I could even hire a local co-host to handle the details. It's a simple and practical way to make use of an asset I already own.

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13:36Brandon Turner:All right, welcome back to the Big Figure Pockets podcast. I am here speaking with landlord Larry, and he just told us about his first deal that he did while in college. Pretty impressive, made some mistakes, but ended up with some good cash flow. What did you do next? So I'm still in college. Like I said, I just added that real estate major. So my college actually just got extended. And that just wasn't going to work, especially after seeing this work. After you get the proof of concept? No, you want to get out of there. So I kind of went to my academic advisor and I was like, hey, man, we're going to have to chop this up.

14:07How are we going to squeeze all these credits so I can graduate on time? Because I still want to graduate. He was like, you're going to have to take a lot of credits every semester and then also do summer and winter classes. Let's do it. So that junior year, second semester. I did, I think, 18 credits. I did six credits that summer. And then I did three credits during the winter. And then another 23 credits my senior year second semester. And thank God I graduated on time.

14:32Brandon Turner:That's wild. Yeah, that was a lot of... That is a lot of class. Because what's a full load? 12? Like 12 to 15. Yeah. Yeah. Wild. So I did a double overload, especially on my last semester senior year. I actually took a class at the community college nearby. So we finished. We finished, thank God. And during this time, I'm doing all the back end because I was preparing to move out to wherever I was going to invest. So I wanted to get my set DSCR lender, my lawyer, my real estate agents in whatever state I was going to go to. I'm still figuring this out at the time, but I did a lot of this on BiggerPockets too, just finding connections so that wherever I did move out, I can hit the ground running and also funding this portfolio that I wanted to do.

15:13Brandon Turner:What was that process like to get to the next deal? So like I said, I used all my money on that first deal. And I didn't have any personal assets, you know, to take money from. So I ended up kind of, you know, going around asking different people. But I'm very familiar with Discord. Like that's like my online presence. I love Discord. So I was going in different like crypto Discord channels. And like for lack of a better term, like just trash talking these people. like so like i was pretty much just telling them that like like their assets are not tangible and like it could be gone tomorrow like you have no idea like crypto is great but like you know i have nothing against it but i'm gonna do what i can to like tell these people that tomorrow could be worth nothing and like if all your money's in crypto that's a little bit of a risk so i just tell people like invest in tangible assets invest in tangible assets and i was doing it like to so many discords with hundreds of thousands of people and i got people that you know are serious not serious um and i finally got some younger guy right that like came up on some crypto money he you know messaged me on discord he's like yeah i do agree with you i have some money in crypto and i do want to like you know take a chunk of it out to you know invest in something tangible uh what are you talking about and i kind of you know like make a pitch deck with the Canva and, you know, like bootstrap that.

16:34And I was like, hey, man, you should really come down to San Diego and we'll have a conversation about it. He actually, you know, comes down to San Diego earlier in May. I'm graduating May, like end of May. He comes down earlier in May, taking out to some Korean barbecue, which he doesn't eat because he doesn't like raw meats like that. So, we were just talking the whole time and it ended up working out. Like we agreed to like a certain start money and I ended up taking that and moving out. The first place I chose was Cleveland, Ohio.

17:01Brandon Turner:Okay. And what did you decide to do with that money? You said you moved to Cleveland. I'm assuming you researched Cleveland before moving there? Yeah. So that entire senior year while I was doing my classes, that's where I actually needed to research where I was going. Yeah. So I researched Chicago, which I turned, I wasn't going to do that. I researched Alabama, Missouri. I actually had a friend in Missouri. So I researched a lot of Missouri, and then Cleveland, Ohio. And Cleveland, Ohio, just kind of, you know, first of all, it was like tolerable to live in. You know, there was a downtown, like, you know, even though I don't really use it, but I'm here for work.

17:39Brandon Turner:Blue is your Southern California, folks. Yeah. It's a decent city. It's fine. Yeah. It's got character, everybody. It's not San Diego, but it's good. Yeah. And it was an insane Section 8 market, and it still is. so I'd pretty much just after class like go on Zillow and kind of you know I felt kind of bad because I was kind of wasting these uh these agents times but I'd give them calls the listing agents and I asked them to like send me video tours of the houses and then also answer questions about the area because you know my understanding of obviously there's east Cleveland which is pretty bad and different parts in the Cleveland surrounding areas so I wanted to get an understanding of which areas are good or bad to buy in and like now also understanding the insides of these houses.

18:25I probably did this to like 50 Asians, you know, poor guys, like I wasted their time, but I got the knowledge that I needed so that when I did move there, I went immediately. The first week I was there, I toured easily over 60, 70 houses.

18:39Brandon Turner:What did you learn by getting the video tours? Like what were you looking for? And then what did you actually learn from that? For example, different video tours had, you know, older panels, older electrical panels, and some of them had new. I'd look at different basement walls. Some of them, you know, you could see condensation building up or horizontal cracks, vertical cracks, right? And I'd ask questions. I'd be like, oh, like, what is that? Because I had no idea. And some agents, you know, are very knowledgeable about houses and some aren't, you know, that's just normal. But the ones that were, which is how I found my agent, right?

19:11Because he was answering every single question about the mechanics of the house. I was like, this guy knows the stuff. I'd be like, you know, why is this like water heater look different than this one? Oh, it's an older one, you know? so it's due for however many years and now now i just know like the fact that they made that comment it's due to be replaced soon now i know like okay water heaters are roughly need to be replaced every 10 or so years right i had no i had no idea so just asking these questions kind of put those timelines for like or like difference between three tab two tab or whatever shingle roofs right yeah so yeah right these are all important things i didn't care about the cosmetic Like these things are all cheap.

19:47It was understanding like the mechanics behind homes. So asking these questions taught me like kind of a baseline. And then when I was there, I can kind of connect the dots and be like, oh, I did see that in the video. Look at that's like, you know, an older panel. I should probably be careful about this house.

20:01Brandon Turner:All right. So you got familiar with properties. You got familiar with Cleveland. You moved. Now you're living there. How long did it take you to get your first deal? What'd you do? Yeah. So I moved to Cleveland 2024 end of July. Immediately, I had that agent that I was speaking with, one of the ones that I was speaking with, asking for video tours and all that. And this guy was a dog. He knows everything about houses. I was like, I'm going to move this day. I believe it was a Thursday. And that Monday, we started looking at houses. And I made a huge list that weekend. Poor guy. I mean, I probably put like 50, 60 houses on that list.

20:39And on a sheet that I shared with him. I was like, we're going to tell all of these. And that gave me a huge understanding of what areas were bad. I mean, I was walking around places in Cleveland, gunshots, two doors to the left of me. It was interesting. And I knew like, okay, maybe this is an amazing place to buy. And then some other places were great. So first deal was a duplex. I was planning on going in just single family, but it was actually a duplex in kind of a rough area. I'm not going to lie. But there were two Section 8 tenants in there top down that had been there for one was like 16 years and one was 11 years.

21:13They'd been there forever. And the rent was super low. It was like 650 bucks each unit. So from my understanding of studying the Section 8 there, the authority there, I could increase the rents right away to the standard of 2024.

21:27Brandon Turner:Without doing any work. Without doing any work because they already passed Section 8 inspections, right? So I knew that it was turnkey enough. I toured the property in person. It looked great. The tenants took great care of the property. I met the tenants. I still have this tenant to this day. He's a great guy. And I was like, okay, let's put an offer. I put a pretty aggressive offer on. I kind of wanted to... And this was my first offer. So I was asking all the questions along the way. I read every single page, letter by letter. And thank God we got that first one at$88 ,000 was for that due price.