THIS OLD MOTEL MADE ME $500K IN 6 MONTHS!

Hey everyone. Today is a bit of a different video. I'm gonna be talking about real estate. I'm actually in one of the apartment complexes that I purchased about six months ago. I'm gonna be walking through with you exactly what I've done over the past six months to improve the equity of this Property by over $500,000 and how I'm using the equity to actually improve my businesses. So where I'm at right now is actually kind of like the storage locker area slash laundry room for this facility. So there's not a. Any sort of washer, dryers and the units. But here we have a storage facility for each of the units. You can see the numbers here corresponding with each of the units. This is a 10 unit apartment complex. I purchased this in October of 2021. And I'm gonna show you around today. I'm gonna show you what we do and what we've done to improve the place. So in this room we had to light it up. So we brought some more lights in, obviously trying to make it just a nice place for the tenants to be. Liz is the property manager here. She gets a percentage of all the rents in exchange for all the work that she does. So these are the type of stuff that we would put around here. We put it here for the tent, try to make a nice place. And we make about $150 per month from the coin operated laundry. It's not a lot. Like we're definitely not trying to make a bunch of money. It's 75 cents for a dryer and a dollar for a washer. And like, honestly I don't plan on raising that. And so this is kind of a nice place. And we actually give them quite a bit of stuff just to be able to help the tenants. Kind of a wash basin here. So just kind of clean this place up, make it look a little bit nicer. Brought in some lights. It was a little bit dingy and mercy. You got water down here. That's not good. This looks like there might be a leak.

This is interesting. All right, so I'm actually have to take a look at this because there is some water you can see right here sitting right up against the hot water heater. So I don't think this is anything's wrong with this one. These are both actually relatively new, only a couple years old. There might be a leak somewhere in the bottom of this sink.

Anyways, I'll have to take that. Take a look at that, Let Liz know. But definitely some standing water. Just a Tiny little puddle right there. It could actually honestly just be someone spilled something. Cuz literally just sitting right here could have been like someone just spilled some water. Anyways, let me go ahead and show you outside. There is someone moving in today. So I want to be a discreet. Obviously no one out here knows I'm the owner. I do live here in one of the apartments. It's a one bedroom, one bath. So I'll show you outside though. Kind of some of the things that we did, I do got to be quiet because actually really nice and quiet neighborhood where this is at and so they'll be able to hear me. So I just gotta be careful. So let me go ahead and show you outside here. Turn off the light.

So what we have is five units over on this side and then five units over on this side. You can see someone's moving today into unit number two and it's a two bedroom, one bath. One thing that we still do need to do is paint the lines. You can see it's very hard to, you know, see any lines for the parking. We're gonna improve that and just make a little bit nicer. But we gotta wait for the weather to improve. As you can see, it's still March and lots of rain. We still have. We cleaned this all up. This was an absolute mess. This tree was all the way down, all this was overgrown and you couldn't see from one side of the property other. We just cleaned all of that out and, and just try to make it, improve it. Once the spring rolls around, we'll probably put some molts down, make it a little bit nicer. But then we also, in terms of the landscaping, installed this fence area. This is a way for us to be able to have people put their pets in here or you know, let them run around, get some steam off for the kids. And then obviously over here you can see some of the tents moving in and out here. But yeah, five units on the side. Half of them are two bedroom, half of them are one bedroom. And we don't do a lot in terms of renovating them. These are 1970 units. So I'm not going to try to over improve them and make them $2,000 or $2,500 per month rentals. We take these and we try to make them for a family affordable housing. And honestly in our area, anything under $2,000 per month for rent is actually relatively cheap. The main reason I actually bought this property is the fact that across the street is a really, really nice private school and this whole neighborhood there's really not a lot of apartments. This is like the only apartments if you look down the street. It's all just residential single family homes. And so to have an apartment complex in this area, I actually think back in the day this used to be a motel. It's zoned for it and I haven't really gone back in a whole lot, but I guarantee it was used for that in the past. It's built in the 1970s. That's what the asphalt siding is, which I'm not super big fan of. It looks old and dated. But we do not spend over improve on the property. So when we try to fix up a unit, we spend, you know, 10, 15, $20,000 putting in quartz. We put some new carpet, we paint the place up. But you can see a unit here like this number one, we haven't done anything to because those, those blinds are thin and the cheap ones. Whereas this number two here, it has the nice blinds and then the front door has been changed. And we really have to bring in some light in here just to kind of make sure that it's safe. And so we brought the lights in. You can see there lights and but again this is from the other angle here. We got to get these lines redone. We trimmed all these shrubs back. This tree used to be growing over the entire parking lot here. So we trimmed that way back. I brought some more lights in like I said. And these are the other units here. Again, half of them are two bedroom, half of them are one bedroom. This is it. So basically what happened is these rents were previously were way under market rent. And so I purchased property for $1.8 million. I put about $800,000 down and then a million dollars on in debt. It's commercial loan because it's 10 units. Again, you can see here, this is like a completely residential market and neighborhood. And then also there's a really nice, another really nice school right there. So anyways, it's really quiet. I love this neighborhood. And what's really cool is literally five minutes from here is the main hospital for our county. And, and the other two minutes away is like malls and very much downtown Bellingham. So it's great, great location. Now what we're actually going to do with this number 10 unit, they just moved out yesterday. We're going to completely gut it, renovate it and I'm going to do it in Airbnb first and foremost to learn secondarily because I think we could easily get $125 per night and book it really Solid because of traveling nurses for the hospital. So looking forward to that. That's gonna be number 10 right behind me there. And we'll be renovating that throughout April. Yeah, we purchased the place for $1.8 million, and currently it's well worth 2.3 million. Mostly due to the fact that a forced appreciation, just cleaning the place up, getting some lights on here, painting, like all the little basic things. More importantly, it was the increase in rents. So when I bought it, it was about a four and a half cap. So if we assume that a four and a half cap is still what we would use for this property today, which in our area now, three and three and a half is being used, but let's just say it's four and a half, we have almost doubled the rents on all these units from 7, $800 per month in rent to 12, 13, 14, 15, 16. There's someone paying $1,700 per month in rent on a two bedroom, two bath in here. And yeah, we have to put, you know, 10, 15, $20,000 in each unit to improve those. But the. The amount that we were able to get, the return on that investment is fantastic. So this is a great property. I have not sold it. I have not realized. $500,000 in gains. I don't plan on doing so, because if I do so, I'm gonna have to pay a bunch of taxes. Rather, what I have done is that increase of $500,000 in equity. I still have that $800,000 in cash in the property, which essentially means I've paid off 70% of the value of this property, which means I can go get a loan backed up by this property with all the equity. And that's what we've done in order to be able to grow Augusta Lawn Care, my other businesses, as we were scaling up, and it requires a lot of cash. That's what we're using this real estate for, is be able to make loans against that equity. So it's kind of what we're doing. And I like to show this because I do believe that as business owners, we can get so locked into our business and what we do and our equipment and our trucks and all the rest of it. And we've got to realize that at the end of the day, we are investors and we are building our business like a investment tool, like a machine. And you have the alternative of spending money in your business is spending money on real estate or stocks or bonds or things like that. And you start looking at your business as an investor Instead of as someone who mows grass or someone who does landscaping. If you start thinking like that, your returns will be better. You'll become much more of an educated investor. And when I look at our franchisees at Augusta Lawn Care and everyone in Augusta Nation, I don't look at it as like, okay, let's go mow grass. Let's learn how to build a great lawn care business. That's great, but in three to five years, when someone's joined Augusta Lawn Care, they're gonna be starting to think about, okay, where did I put this money? I expect after five, six years, someone would have a business that's generating a lot of profit. Well, where do we put that profit In a way that is most tax efficient? Because not going to be necessarily just putting in a savings account. It's going to be taxed at 30, 40% if I do that. Whereas if I can figure out how to put into real estate or into stocks or building a second business or building a second or third location of Augusta Lawn Care, if we can learn how to teach them how to do that, that will allow them to preserve that wealth without spending a whole bunch of money on taxes. That's the goal. That's why I've bought 20 units like this over the past couple years, to learn the game and be able to teach our franchisees at Augusta Lawn Care over the next several years as they become more established and more profitable. So thank you all so very much. Hope that was helpful and a little bit educational for you. Take care. Have a great day.