Mr. Butler began in 2008 to acquire, renovate and hold properties. We all know the story of how the housing market fell to its lowest levels of all time. Most thought that the real estate market would never fully recover and hit the largest shortest of inventory 13 years later.
Mr. Butler did in fact see it as a game-changer to build wealth for his grandkids. Mr. Butler went shopping immediately because he was in a position to move on it with funds from several areas of savings, retirement, whole life policies, and credit lines including home equity line as well.
This enabled him to take advantage of the best deals at the time, but he did not stop there.
“I called it snowball effect,” coined Mr. Butler, “which means since I did not need the rental income, I allowed it to build for the next acquisition and the next one after that. This created an automatic reload. So I initially purchased 10 2-families (or 20 doors) and after property taxes, insurance, water/sewer, maintenance all remaining went back into acquisitions. These initial 20 houses were acquired and repaired for about a whopping $25,000 total acquisitions.
Later I used credit lines as opposed to cash for 2011-2013 since prices were still very expensive in the motor City of Detroit, Michigan. I picked up another 20 doors and the value has come back full circle. Today, I enjoy a very good cash flow and my portfolio is worth between $4.8 Million to $6 million and climbing upwards. As you know, distressed properties are practically a thing of the past in Detroit, MI today.”
“In fact, where I was all in at $25,000, the same house is now worth $100,000 to $125,000. What a difference a decade makes when you capitalize on opportunities.”
We asked what advice he can give today.
“Start with what you have and build. In other words, plan and blossom, and don’t be concerned about the number of doors but rather start on your path. Even if the floor in your market is $150,000 to $250,000 take the first step and get into the game because we know all too well that a10 years from now, there’s certainly a chance you could double your money with rents and appreciation.”
Yes, I know what you are thinking. Well this is an awesome story, but I am in California, NYC, and/or Seattle. Then go where the market can support your investment level. The obvious shameless plug is none other than the hottest city in the nation for rental returns, Cleveland Ohio!
