Snowballing to 14 Rental Units and $8,000/Month Cash Flow (Starting with $15K)

0:00Why not buy a house instead? dead. Logan was just 18 years old with no credit and only$15 ,000 to his name. So could he really buy rental property? After mailing over 200 handwritten letters, he landed a four-bedroom townhome in his dream neighborhood. And then he rented out three of the rooms to his friends. Now, all of a sudden, he wasn't just living for free, but he was also saving a little extra money each month that he could put towards his next deal. From there, he snowballed from one property to the next, and today he owns a 14-unit rental portfolio that cash flows nearly$8 ,000 a month.

0:37And Logan's not doing anything that the average person can't do. He's just doing the things they usually won't do, like pulling lists of sellers, sending direct mail, and picking up the phone and talking to people. He's doing all this while he's still working his day job. You too can build a cash-flowing rental portfolio much faster than you think if you use the simple, proven strategies Logan's about to share.

1:05What's going on, everybody? I'm Henry Washington. And today, we've got a great story with investor Logan George from Tallahassee, Florida. So let's bring him on. Mr. Logan George, welcome to the podcast. How's it going, Henry? It's going fantastic, man. I'm glad you're here. Man, I'm excited to be here, man. I'm one of your biggest fans. Oh, I'll take that. I love compliments. I appreciate it. But it seems like you've got some pretty decent experience early on in your investing career. So why don't you start at the beginning and tell us about how you first got into real estate? Yeah, man. So my name's Logan, grew up around real estate.

1:41My family's been in it. My dad had some rental properties back in the day. What's back in the day mean to a guy like you? Back in the day to me means probably 2006, 2008, you know, dude, I was in my prime then that was prime time. So I was probably like 12 years old then. I remember going around, you know, my dad had a little lunchbox he kept in his truck and, you know, it was cash back then. And he'd say, all right, we're going to collect rent, you know? But anyway, long story short, he sold all those and it was time for me to move away for college. And I was looking at what rent was going to cost me.

2:16And I was like, okay, so for a one bedroom, one bathroom apartment that I probably don't want to live in, I'm going to pay, you know, a thousand dollars a month in rent at the time. This was about six years ago. And my dad was like, you know, you ought to look at trying to buy something. I didn't have any credit. I was 18. I was working a$15 an hour job at a gym, saving every penny I made. And, uh, he gave me kind of the, these are three neighborhoods close to Florida state, which is where I go to school. And, uh, I got down, started writing handwritten notes, wrote like 200 handwritten notes.

2:50One guy got back to me and was like, hey man, you wrote me a note about a month ago and I want to sell my townhouse. What do you want to give me for it? So from there, we worked out a deal. I couldn't go get a loan. I had 15 grand in my name, no credit. So we worked out an owner financing deal on that. I gave him 10 grand down, paid$110 for the townhouse. So this was a four-bedroom townhouse. I rented out the other three bedrooms to some of my buddies. So I was living for free, making a little bit off of it, and it snowballed from there. Heck of a first deal. You did several things here that I think almost anyone can do.

3:30First and foremost, you selected or your dad helped you select some areas of town that would be close to the school. And I assume those were chosen for obviously proximity for you to get to school, but also future value, I'm assuming? Correct. These were actually communities that were built when he was in school here. So these were built in the late 80s, early 90s, the community that I actually ended up buying in. So they had some age on them, but they're not 100 years old. There's still some appreciation to be had. So that's how we kind of chose that. And I wrote a note to every single person in there.

4:11So essentially what you did was an off-market deal finding strategy called direct mail marketing. And that strategy usually involves you building a list of people who you would like to offer to buy their house, and then you send them a piece of direct mail. Most of the time, people have some sort of generic messaging or they use some print house to send mail. you actually wrote the letters yourself because you were doing it to a smaller list of people, it sounds like. So you hand wrote 200 letters, first of all. That's an effort in itself, because that takes time and effort. What did you actually say in the letter?

4:46It was very basic, you know, and I did want to make it somewhat personal. So, you know, it was like, hey, I'm Logan, young guy, moving to Florida State for school, really just looking for something in the neighborhood, would love to chat with you if you're at all interested in selling. I love that. I love that because it adds some personality to it. A lot of these direct mail pieces people get, like I said, they're typically generic. They all say the same thing or a very similar thing. So if you're going to send direct mail, you do have control over the messaging. I think that young people investing in real estate have such an advantage because there's a lot of older people looking to get out of the game and they see themselves in a lot of these younger folks who are getting into it.

5:28And so it's a great way to not just buy property, but build relationships with seasoned investors. So you sent 200 letters and then you got one response, but you mentioned that you owner financed this because you didn't have credit built up yet. So talk about the loan structure. What did that look like? Basically how it worked was whatever I ended up paying him, he had a$6 ,000 deficit on his loan, Okay. But he had the cash to cover it. So he just essentially paid the six grand and then took the monthly income from you just as cashflow in his pocket. Correct. And what were you paying him per month?

6:05I want to say it was like 500 bucks at the time. Oh man. It was like nothing. You put 10 grand down though. So you did put some skin in the game. Right. Right. So I put some skin in the game. The property didn't need anything. I was able to refi it. And luckily it was, you know, late 2020 at the time. And I got it. I still have that loan. It's a 3.15, I want to say. So, you know, with taxes and insurance and everything at this point, I think my payment's right around 750 bucks, you know. What were you charging your buddies to live with you? So I think we started at$335 a room. So, you know, they were getting a good deal.

6:46They were my boys. And then we split the power bill. So, you know, I was happy because, you know, at the end of the day, 18 in college or 21 in college, you know, it paid for the beer on the weekends and all my bills were paid. So you went from thinking you're going to pay a thousand dollars a month for a two bedroom to getting paid about$500 a month to live in this townhome, which is amazing. And I've spoken to colleges before, real estate groups in colleges, and they've always asked like, what should we do? What should we be thinking about? How do we get into the space? And I tell them all the same thing.

7:20You should be looking for something that you can buy right now that you can live in and house hack and rent to your friends because you're paying something to live now. You might as well use that money, buy something in a college area that's gonna have appreciation and then rent to your friends and you can live for free. Eliminating your largest living expense, that early on allows you to start to save a lot of money. So I think that was a really, really cool strategy that you pulled off for your first deal. Yeah, absolutely. And then, you know, I lived there for four years, but two years later, I looked at it and I'm like, okay, this place is worth 160 now.

7:55Yeah. And, you know, that kind of snowballed. And I'm like, okay, if I can repeat this, how many times does it take before, you know, I don't need to worry about anything else at that point, you know? Yeah. Cool. Great interest rate, cash flow and great. What does that place rent for now? $2 ,000 a month. $2 ,000 a month, you're paying about$700 in a mortgage. I would say you're making some decent cash flow. That's amazing. We've got to take a quick break, but we'll be right back with more from investor Logan George right after the break. When I bought my first rental, I thought collecting rent would be the hard part.

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11:37All right, we are back on the BiggerPockets podcast with Logan learning about his portfolio. Let's jump back into it. Awesome first deal. You did a lot of strategies that took some work, but maybe didn't have systems built behind them. So how did you move from that to your second deal? So after that, I started selling cars when I got into college. It was making a good income. You know, I'm a hustler. You seem like the kind of guy who could sell cars. Yeah. So, you know, I was seeing these big checks coming in and I wasn't spending any money. I mean, if anybody here knows about the car business, you know, you go to work, you eat and sleep and that's it.

12:15But this is about three years after my first deal, 2023, another townhouse popped up in the same community. And this one was a three bed, three bath. They listed it for 160. It was immaculate on the inside. They just got done redoing it. And I was like, you know what? I think I can get$1 ,700 a month out of this thing. That's, you know, beats the 1 % rule. I have some money to spend. I'm going to go buy it. So that was on the MLS. This was a peak of everybody going and buying everything without negotiating. No inspections. Yeah. So I actually was like second in line and they told me they had a full price deal and I was like, no big deal.

12:55They called me back two days later, buyer backed out. So I actually bought that with an FHA loan. Oh, okay. And moved into it. Yeah. So that's when I originally rented that first four bedroom, took two of my buddies with me, lived there for about a year. And then in that timeframe, I ended up buying two more duplexes later that year. So where the heck does that come from? So later in the year, I knew that I was looking to get out of the car business. I was just driving myself nuts, working 60 hours a week. And I had all this cash saved and I had not spent any time looking at the market or finding deals or anything.

13:35So kind of sat down one night and I was like, you know, I've been listening to the BiggerPockets podcast. So I was like, you know what? I need to move into some sort of, you know, small multifamily and maybe get a little more bang for my buck. So I pulled a list this time. I put in there, you know, two to four units was what I was looking for. I wanted the, you know, the ugly duckling on the street, ideally. And sure enough, after making probably 250 phone calls. I spoke with this older lady who lived in a duplex. Her son lived in the unit next door, wasn't paying her any rent. And she's like, you know, I just want to move.

14:15This place needs some repairs that I can't afford to make. I'd love to chat with you about it. And literally I was like, cool. Well, hold on one second. Pulled out my phone. The address was 15 minutes away from where I was. I was like, can I come see it? 15 minutes? She's like, sure. So I swung by, met her, walked through it. We chatted about everything about her life and we became good friends very quickly. And I was like, look, I have no clue what this is worth. I just kind of started looking. Let me kind of figure out what I can give you for it. And let's meet up on Monday. And this is like a Friday.

14:52So over the weekend, I pull some comps and go to sit with her. And she's like, look, I kind of had tentatively in my mind between like 180 and 200 was what it was worth as it sat. And she's like, you know what, give me 170 for it. And I was like, I was like kind of surprised. Right. And she's like, you know, but, but I'm going to need to talk to my son and we're going to have to really contemplate really pulling the trigger on this. And I was like, you know what, I'm going to give you 180 for it, but you just got to do the contract with me now. Let's just go ahead and make it happen. and we'll go from there.

15:25Are you comfortable doing that? And sure enough, she was happy doing that. I actually went and got a conventional loan on that property. So I had to put 20 % down and I put about 20 grand into it after they moved out. That was in 2023. And I still have the same folks living there, but I get 2 ,300 in rent out of that property every month. You pulled your list from PopStream. I'm sure you had to go and skip trace and get phone numbers. So you got your list, You've got your phone numbers. You know the areas you want to market to. So you start dialing. What do you say to these people when they answer the phone?

15:58So, you know, coming from sales, it's another sales call, you know. Hey, Henry, real quick. My name's Logan. Is this you over here off of, you know, Capstone Drive with that duplex? Is that you? You know, they'd say, yeah, yeah, that's me. I own it. Well, awesome. Hey, I'm a young guy in the area, you know, getting into investing. And one thing that I do kind of put out there, I'm not a realtor. and some realtors get their business. I got a little more traction by adding in there, you know, hey, I'm not a realtor. I don't want to sell your property. I'm actually interested personally. Have you ever thought about selling it if the money was right?

16:31And, you know, after 200 times of getting told no, you know, the next phone call hurts a little bit, but all of a sudden, boom, you get that one yes. And, you know, you feel like you hit the lottery. Yeah. You know, it's a good feeling. Cold calling is an excellent way to get a deal because not many people do it. The harder it is to find a deal, the more profitable that deal can eventually be because there's not a lot of competition when you're marketing that way. There wasn't a lot of investors just picking up the phone, calling people. Right. And there's still not today. But back then there was even less.

17:05Best part of the whole deal is we sit down at her table and I actually brought a paper contract with me. And she pulls out this stack of mail this thick. And she's like, Logan, you wouldn't believe I get these letters weekly. And I've been saving them because I've been thinking about selling and you just happened to call me and nobody's ever called me before. And it was literally letters, people, hey, I want to buy your property. You know what's cool about that is all those people warmed up that lead for you. And then you called at the right time. Look, marketing for deals is just a function of you getting on the phone with somebody in the exact moment they're considering selling.

17:45Sometimes we manufacture that moment. Sometimes you sending the mail manufacturers the moment that they're thinking about selling. And then you send another piece of mail and they answer. One of the things that I did when I started to mix up my off-market deal finding strategies, I started to get better results. In other words, I would pull a list and I had been sending mail to it. Instead of me pulling a new list and calling it, I used a cold calling company. I just started having them call the same list I was mailing. The first time I did that, I bought two deals from people I had been mailing for months.

18:16They had just never responded to my mail, but they responded to the phone calls. And so you're just going to find that people connect differently. Some people will answer mail. Some people will answer the phone. So if you can reach out in more than one way, that's a good way to increase response rate. So awesome. You cold called. The lady said, yeah, I'd like to sell you the house. And then the other thing you did that was very smart was you set the appointment immediately. I think a lot of people, when they're making calls or when they're answering calls from direct mail, there's some fear. There's some uncomfortability.

18:51I got to go get in these people's face and look at their house. And so they do one of two things. Either they delay the meeting to give themselves time to mentally get in the right headspace, or they let the seller dictate when they meet. And the seller isn't thinking, I want to make a deal right now. Most of the time, what they're thinking about is I don't want to be embarrassed. So how do I get my house cleaned up? How do I get prepared for this meeting? And speed to lead is so hugely important when you're doing off-market deal finding. And so I like that you pulled up the address and said, I can be there in 15 minutes.

19:26Can I come look at it? I do the same thing. If I can get there within the hour, I am there. And I always tell them, look, don't clean for me. Don't pick up nothing. I've seen crazy houses. I've seen houses with no roof. Like I don't care about your stuff. I just want to see the house. I'll be in and out of there in five minutes. Don't waste time picking up for me. Kind of releases some of that tension that sellers have. But if they're ready to sell, the sooner you can get there, the better. I love that you had speed to lead. And then the other quality that I think was very good was that you went and you were personable.

19:59So you showed up and you started to be human with her, chat with her. I always tell people when you're in somebody's home, when you're in their space and you're evaluating that property, yes, you should be looking at the property, but you should also be looking around at the stuff. What can I use to relate to you on? Do you have something that I can show you that I'm a human being about? I was in a house one time and the guy was a painter. My dad was a painter. So we started talking about painting and it really humanized to me. And that humanizing starts to build that trust and helps people see you as just another human being and not some Yahoo trying to come in and lowball off around a house.

20:35And you said you guys became friends and that helps me. I actually, she was an older lady stressing about moving too. So I actually had a buddy who worked for a moving company at the time. And I was like, no worries. Don't stress about the moving. I'm going to send my boy over here on whatever day you decide to move and you don't have to worry about that. So I actually paid for her moving too. So that's it, man. Look, solving problems. This is exactly what deal finding is about. It's about solving people's problems. Her problem was I want to sell. I'd like to sell fairly quickly with less hassle and I don't want to move.

21:07Cool. Got it. I can handle all of those things, right? Super great. So I love that you did that. You bought the property conventional loan, 20 % down. and then you spent 20 grand on the rehab. Sounds like a pretty cosmetic rehab. It's a duplex. So you rented both sides out and you were getting a total rent of how much? 2 ,300 starting out. And what was your, about what were you paying per month on that mortgage? About 1 ,300 bucks. Atta boy. Man, what a cool story, Logan. You've employed a lot of strategies that people think are challenging or difficult and you just did them by being yourself, being trustworthy.

21:46and genuinely just trying to be a good dude building a portfolio. And it's turned out to help you get some awesome deals. And I just wanna say to anybody who's thinking about making phone calls, don't think about it from the perspective about how scary it is, but it took you 250 calls to get a deal. So everybody is listening. If you knew that you had to make 250 cold calls, but on the 250th one, you were gonna get a deal that you were going to be able to cashflow over$1 ,000 a month and start to build true wealth, what would you do? You'd start calling immediately. Two phones, one in each hand.

22:23That's right. That's the game. People don't want to do these things because they're worried about what if it doesn't work. It does work. There's proof that it does work. So every no is one no closer to your yes. The more calls you make, the closer you are to getting that deal. So did you do it again for your next one or did you try something new. Yeah. So within a month after we wrapped up that first deal, got right back on the phone. I was like, duplexes seem to be working. There was some good cashflow there. Started making my calls. And this time it was like 15, 20 calls in, talked to a gentleman named Curtis.

22:58And he had a duplex, big, huge duplex actually with a giant garage attached to it, which I thought was kind of cool, about five minutes away from my house. So we actually met up same way with the first lady. I was like, Curtis, how far away are you? You're five minutes from me. And we met over there about 20 minutes after we got off the phone. And Curtis is a more seasoned investor. He's in his late 60s at this time. He's like, look, man, I got this portfolio. I'm at the point I'm tired of screwing with it. I've had this since 1999 is when I bought it. It's been great to me. You offer me something fair?

23:35He's like, I get these calls all the time. I get mail all the time. He's like, today's your day. So tell me what you think. And we walked through, we agreed on a number. And at the end of it, he's like, Hey, you know, I'm going to have a lot of taxes to pay here. I might even be willing to finance some of it for you, you know, with a, with a decent down payment, you know, my ears kind of lit up. I'm like, okay, well, maybe we can move a little, a little quicker than we could otherwise. Anyway, Curtis and I met up two more times after that. We've become good friends since, but we worked out an owner finance deal on that.