How We Got Here

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How We Got Here

• Brad McLeod
• Jennifer Minge

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Jennifers Experience

• Decided I wanted to invest in Real Estate
• Created quite a library of real estate books
• Attended the John Adams Investor Institute
• Joined GAREIA
• Attended the GAREIA Boot camp
• Sent letter to pre-foreclosure property owners

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JenniferProperty 1

• Purchased my first property as a Subject-To in a
  pre-foreclosure situation which was given to me
  by an agent who taught at the GAREIA boot camp.
  September 2004.
• Worked with another GAREIA member who helped me
  with all the rehab work that we did ourselves.
• Spent 3 months on the rehab.

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JenniferProperty 1

• Rented my first property in January 2005. My
  first tenant and she has been with me ever since.
  

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JenniferProperty 2

• Was given the lead on another pre-foreclosure in
  Norcross from another GAREIA member.
• Purchased property and fixed it up.
• Flipped property and make a profit of 12,000.
• Took 6 months from purchase to sale.

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JenniferProperty 3

• Purchased another SFR about .25 mile from my
  first property. This was a regular purchase from
  a burned-out investor who wanted out.
• Made purchase using my Roth IRA.
• Fixed up the property myself and with the help of
  a contractor.
• Rented the property for 1,050.

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JenniferProperty 3

• Found out that this property was in a very rough
  part of town.
• Tenant moved out and property remained vacant and
  was vandalized.
• Ended up being a burned out landlord since I was
  afraid to visit my own property.
• Sold at a loss.

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BradProperty 1

• Purchased his first primary residence in Atlanta.
• Lived here for many years.
• Had children and out grew the property.
• Moved to a bigger house in Sandy Springs.
• Rented out original residence thus becoming a
  landlord.

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Formation ofLang Thomas

• At a family reunion, we talked about what we had
  accomplished with real estate and decided to
  partner together.
• Wrote our 10 year business plan.
• Incorporated our business.
• Created a corporate identity.
• Got a business checking account.

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Lang Thomas

• Got on the list of multiple wholesalers
• Spent months driving around town looking at
  wholesaler properties which were all SFR
• Had a GAREIA member that had told Jennifer about
  a quad apartment building
• Finally decided to overcome our reluctance and
  purchased the quad building

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Lang Thomas
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Our History

• Purchased our first quad on 11/30/2005
• On 12/20/2005 tenant committed suicide
• On 12/21/2005 had our first vacancy
• On 12/23/2005 got the keys to the quad
• January 2006 evicted a tenant
• February 2006 rented the unit that had the suicide

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Our History

• February 2006 started rehab on unit where we
  evicted tenant
• We literally had to burn everything in this unit
  since it was so foul
• Put in new hardwood floors ourselves (with the
  labor help of a fellow GAREIA member)
• Completed rehab in April 2006

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Our History

• March 2006 filed in small claims court to recoup
  outstanding monies owed from tenant we evicted.
• April 2006 got default judgment against tenant
  but we never filed for garnishment.

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Our History

• Vacant unit sat for several months. Finally we
  decided to put a sign out that said ½ off first
  months rent. Immediately got 5 applications from
  tenants that were living in other quads on the
  same street.
• July 2006 rented our vacancy
• Started writing campaign to landlords in the area

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Our History

• In August started talking to a landlord who owned
  3 quads on the same street.
• We spent months analyzing water bills, leases,
  and repair bills while trying to determine if we
  should purchase all 3 of his quads.
• After about 3 months of analysis we told owner we
  would fax offer on Sunday.

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Our History

• Monday morning called owner only to find out that
  an out of state buyer had made an offer on
  Saturday and he accepted.
• We were offering to purchase 2 now and the 3rd
  one in 6 months.
• Guess what we are now talking to this
  California owner as he is definitely having
  problems keeping his units rented clean

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Our History

• November 2006 started talking to another
  California owner who had 3 quads. Under contract
  that fell through twice due to financing issues.
  He finally offered to sell us his worse property
  of the three. During the closing he asked if we
  wanted to purchase all 3. We agreed and were set
  to close at the end of December.

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Our History

• Had problem with financing since we did not have
  enough funds to show we had the 25 down payment
  for all 3 quads. We closed on 2 quads at the end
  of November which was a Friday. We were
  scheduled to close on the 3rd quad the following
  Monday. The previous buyer called and offered
  full list price and he cancelled our closing on
  the 3rd property.

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Our History
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Our History
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Our History

• Started rehab on one property in November during
  the closing.
• Building had one tenant and 3 units that looked
  like downtown Beirut.
• Spent about 15K getting this unit rehabbed.
• Had all 3 units rented by December 15th!

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Our History

• January 2007 took a hiatus on doing the rehab on
  the only vacancy in the second building.
• February 2007 completed the rehab by installing
  new hardwood floors and carpet.
• April 2007 rented to a tenant that lived in
  another quad on the street of our other building

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Our History

• April 2007 evicted a tenant in our quad we
  purchased in November
• Learned that you cannot put tenants stuff on the
  street without the Sheriff being present
• Immediately filed in small claims court against
  tenant for monies owed.

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Our History

• During the 30 day period for tenant to answer our
  lawsuit, I saw the tenant on television where he
  had been arrested for killing a man.
• Decided not to attend our court date against this
  tenant since we figured we would never get
  anything from him

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Our History

• Our contractor was making some serious money off
  of doing the rehabs for us on our 2nd and 3rd
  property.
• In one week we gave him a check to purchase
  materials to replace siding and he attempted to
  fix a leak on the main water line.

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Our History

• Contractor left paper towel in line when he
  closed it up which blocked all water flow to the
  last unit in the building
• Had to put tenant up in a hotel for 2 nights
  while contractor spent hours trying to fix his
  mistake
• Finally were told by contractor that it would
  cost 4k to fix by a specialized plumber

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Our History

• Monday morning got another plumber out to check
  what was going on. Called contractor to cancel
  his specialized plumber who was scheduled on
  Tuesday.
• Specialized plumber showed up Tuesday since
  Contractor did not cancel. Asked how much and
  was told it was to be 2.5K. Contractor wanted
  to milk us for 1.5K.

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Our History

• Got paper towel removed from main water line.
• Send payment demand letter to the contractor for
  payment for fixing line and return of money that
  we had given him for the siding.
• Anybody know how to get hold of Rick Henry let us
  know. We want to sue him!

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Our History

• June 2007 had tenant move out in the middle of
  the night.
• Filed in small claims court against the tenant
  and fiancé. Got default judgment against fiancé.
  We are in the process of garnishing his wages to
  cover ½ of the amount that we are owed.

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Our History

• July 2007 purchased our 4th quad building from a
  California landlord that was desperate to sell.
• We agreed to his price but only if he took back a
  25 second
• Since I wrote the terms for the 2nd, they were no
  interest no payments for 13 mths
• Purchased building for 6k in CC

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Our History
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Our History

• August 2007 saw quad listed Friday evening for
  249,900.
• Monday evening an agent called to tell us this
  was a pre-foreclosure and they would take a short
  sale.
• Filled out GAR form to purchase at 260,000 and
  sent to agent to submit.

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Our History

• Bank rejected our offer. Bank got another offer.
  We were going to submit 2nd offer at 280K.
  Agent found out that if we offered 300k with 5k
  in CC that the bank would accept offer.
• Submitted offer on Thursday evening.
• Friday evening bank accepted offer.

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Our History
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Our History

• During this time we had been pursing another
  building on this same street that had been
  foreclosed in January.
• We had made offers for 6 months.
• Finally bank accepted our offer.
• During the 30 day closing, Jennifer lost her job
  and bank refused to close the loan so we lost our
  earnest money.

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Our History

• Took advantage of the fact Jennifer was
  unemployed.
• She did the rehab on the building in one week and
  we had all 4 units rented and all 4 tenants
  moved-in within 10 days of our closing.
• Learned the ½ of first months rent was a magnet
  in attracting tenants.

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Our History

• October 2007 a California landlord that we had
  talked to was foreclosed.
• Attempted to do a short sale on both quads at
  305K. They were foreclosed.
• Bank lists one property at 257,250 on Wednesday
  evening, we look at it on Thursday and put offer
  in on Friday.
• Bank accepts another offer on Tuesday.

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Our History

• November 2007 submitted 2 offers to 2 different
  landlords on purchasing their properties in a
  land trust where we would assume their mortgage.
• One said no but is now possibly considering it.
• The other one is having her tax accountant review
  it and we are pretty confident this will close

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Our History

• Last Friday made offer of 260K on the quad that
  we could not close on when I lost my job and made
  an offer on the 2nd quad that was foreclosed.
• By the time of this presentation we could quite
  possibly have 2 more quads in our inventory of
  rental properties

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Our History

• What we have learned