039: Buying over 400 Rental Property Units in 3 years with Jonathon Twombly

Jonathon Twombly started his career as a litigation attorney. He loved the exciting work and working on big cases in New York, when he first started out. As his career progressed it became much less exciting and appeared to have much less potential, than he first thought. Sure he was making great money, but it came at a huge sacrifice because of all the work he had to do. He also was not building anything substantial financially. Circumstances helped push Jonathon out of law and he decided real estate was what he really wanted to do. After some massive failures, Jonathon has bought over 400 rental units in about 3 years. We talk about all of it on this episode of the InvestFourMore Real Estate Podcast.

Why did Jonathon grow tired of being a litigation attorney?

After Jonathon received his law degree, he went to work immediately as a litigation attorney in New York City. Jonathon loved the excitement and working on big cases right out of law school. Over the years, the job became less exciting as the job became more about paperwork than practicing law. He also realized that his ultimate goal of making partner, was not as appealing as he thought it would be. To be a successful attorney you have to work long hours and sacrifice a lot. When he started to see what it was like to be a partner, he realized they worked even harder and sacrificed even more. Did he really want to spend his entire life working?

Jonathon decided he needed a career change. He decided real estate was what he wanted to be involved in, but could not get a job working with large real estate investment firms. He was told it was almost impossible for experienced real estate executives to get a job, let alone someone with a law background and no real estate experience. Instead of give up, he decided he would make his own job.

How did Jonathon crash and burn in his first real estate investing attempts?

Jonathon found a real estate investor who was looking for a partner. Thanks to Jonathon’s work on Wall Street, he had many connections who were willing to invest with Jonathon, if he could find great real estate deals. Jonathon and his partner went to work looking for large multifamily properties in Texas and Louisiana. They found a couple of properties that would work, and got both properties under contract. They had a mix of private financing and bank financing lined up. However, when it came down to finalizing the loans, the bank backed out. This left Jonathon and his partner out thousands of dollars in due diligence costs. They also had to back out of the other deal, because the same bank was financing that property as well.

Jonathon had been working in the real estate business for about a year with nothing to show for it, except lost money. He did not give up. He decided he would figure out investing in multifamily properties himself. He moved locations to the South East.

How did Jonathon buy so many units so quickly?

Jonathon had learned a lot working with his partner, even if he didn’t make any money. When he started looking at properties in the South East part of the country he immediately felt better about the numbers and investment. It took him some time to break into the multifamily investing world. Many brokers and investors will take someone serious until they have bought multifamily properties. Jonathon was able to buy and finance a 102 unit building for his first investment property! In the last couple of years, he has bought more buildings that total 404 units!

What has Jonathon learned in his multifamily investing journey?

Jonathon has a lot of advice for those looking to invest in multifamily properties.

• Don’t be afraid to start small. He thinks he could have gotten started faster had he bought some smaller buildings first and built a track record before trying to buy the large buildings.
•  Choose locations wisely. Real estate is all about location. While some areas may have great numbers, the local economy and other factors can greatly affect the returns.
• You have to network like crazy. Many of Jonathon’s deals have been off-market properties that were not listed. He only knew about the deals because he was constantly networking in the multifamily investing world.
• You have to act fast. He bought one property without ever seeing it in person. He knew it was an awesome deal and it would be gone before he could see it. He made an offer site unseen and it has been one of his best performing properties.

How to contact Jonathon

Jonathon has started his own blog about investing in multifamily properties. Themortarblog.com, is where you can find Jonathon and get a free eBook on how to get brokers to take you seriously.