Year 2020 Investments: 2 deals, 1 panic attack at the bank
Updated: Jan 3, 2021
Showing numbers first and if you care to read, carry on!
52-Unit Investment, Fayetteville, NC
The Rehm’s Input: $50,000
Purchase Price: $3,200,000
How many partners: 25+
ROI: Estimated 8% minimum quarterly plus equity at the time of sale (5-year exit strategy plan)
Where we got the money from to invest the 52 unit:
401K: $21,000, I pulled out all my 401K and decided to invest it and take the 10% penalty fee
Scott working his ass off being a Covid Nurse in Texas: $18,000
Emergency Fund: $11,000
Investment Club of America: Docu-series
The Rehm’s Input: $25k
Total Funding to shoot 6-10 episodes: $1,200,000
Disclosure, I Signed an NDA so I can’t talk about the deets. However, the broker for the docu-series has shopped it to Netflix and they countered back with wanting a whole series. So this is why our club is asking for funding. The broker will shop the docu-series to Amazon, Netflix and Apple and whoever has the highest bid, will get the docu-series.
Where we got the money to invest in a Docu-series
Scott working his ass off being a Covid Nurse in Texas: $25k
How much liquid cash we have to our name after investments:
Emergency Fund: $3,000 (Don’t think we have a lot of money, we are asset poor, lol. We put all our liquid cash into investing)
Also, make friends with those who find you deals. Ha-ha! Although our last 24 unit was a learning lesson for us. We were the partners that delayed everyone getting their taxes done on time. We didn’t know that we had to set up a business account under our LLC and this just happened during the beginning of the pandemic. Scottie went to New York so we couldn’t set up a bank account without each other. After we quarantined for a few weeks when he got back from New York, we finally set it up and was able to give our bank info over for our taxes to get done and for us to deposit our checks we get quarterly.
Now, our BFF (Business Friend Forever) Alex, says he’s been working hard on getting a 52 unit. Since we were apart of his first deal, he is offering all the investors on the 24 unit an opportunity at the 52 unit offer first. How are we going to pay for this? Scottie and I don’t have a lot in savings because we blew that on a gas and oil investment at the end of 2019. (LMFAO, do not do this unless you have BIG balls). So, we have been slowly building our savings back from our W-2 jobs and budgeting.
How we got the money to fund our portion of the 52 unit
We had to think creatively. In order to invest in this deal, we would need $50k. I have my 401K and we decided to pull out all the $21k and take the 10% penalty fee. People would seriously not do this, but we’re risk takers and we could not let this opportunity pass us by. Also, we don’t believe in 401K’s anymore since we see that investing can get you a better ROI. Then we take out $18k that Scott made in from being a Nurse for Covid that we were planning to use for renovations for our live in flip. So that totals $39k. Now where do we get the $11k from? We decided to dip into our emergency fund and use $11k. Mind ya’ll that we just started rebuilding it in the beginning of Jan 2020 because back in Dec. 2019 we blew our whole emergency fund $25k on the gas and oil investment.
Why we decided to go all in: First, the 24 unit was a learning investment for us and our partners. Since we’ll be the same partners and have added investors, they can leverage their knowledge to make the right decisions better. Also, we don’t have any debt besides our mortgages. No car debt, no credit card debt and no student loans. We paid this all off in 4 years. One thing why I love investing in the things we do is because I always make sure there is an exit strategy plan. With our multi family, the buy and hold time is 5 years. Rinse and repeat.
Every year we want to be able to add more multifamily or businesses to our portfolio. So yes, Scottie and I grind at our W-2 jobs to fund our investments. We budget like beasts and cut back on spending. If you know us, we are boujee so this is a challenge. Our goal is to retire on FIRE. (Financial Independence, Retire, Entrepreneur/Early). In hopes that this will provide passive income to set us up for our future. We’ll see how it all goes. We are firm believers that we prefer not to use OPM (other people’s money) when it comes to investing because we want to leverage and take risk on our own money. Until we learn more about investing, is when we would feel more confident to OPM. But for now, we'll take risks on our own. We didn’t do any vacations this year and barely ate out so this helped us save the money needed. Eventually once we learn the syndication process, we would love to bring others along for the ride and invest with us. Our goal is to help other families not make the same mistake we did by getting into debt. Yes, I mention this a lot, but we paid off $104k of consumer debt in 4 years. We want to teach others how to budget and tell your money where it goes.
How we got the money to fund the docu-series
So Scott deploys to Texas to be a Covid nurse out there. Although it’s not ideal, this short term sacrifice will set us up for long term goals. Put it this way, he makes enough money in one month than I do in a year. Not to brag, but to emphasize how GOD gives us opportunities to serve our talents.
The investment club we belong to said that there is a unique investment opportunity and to make the meeting for the pitch. I was able to watch 20 minutes of the docu-series first episode and I was sold. It’s exciting because I love the film industry so I am super excited to learn about this industry from a business perspective. Also, I get to tag along when they film in Vegas. So excited for that!
Also ya'll... OMG! I did have a panic attack at the bank because we dropped $75K for two investments at the same time. I always get anxiety whenever we wire money over for investments because they are risky, AF. But having faith in the process is the fun part. For now, Scottie said he’s done with investing in multifamily so we can focus on our memory care home, our renovations for our live in flip and to focus on a few business ventures we’re working on. Will blog about those once they are finalized.
The BFF, Alex will blog thoroughly about the deal from a GP perspective. Once he’s done, I’ll post the link here. Thanks for reading and don’t forget to DREAM BIG!