Before you invest with a multifamily operator, it’s important to understand their track record. To know that they’ve got experience overcoming obstacles and making a deal work.
Prior to joining our team at Nighthawk Equity, podcast cohost Garrett Lynch owned and operated a class D real estate portfolio on the south side of Chicago. And learned how to solve problems on a life-or-death level in the process.
On this episode of Financial Freedom with Real Estate Investing, Garrett is flying solo, discussing how he acquired 300 properties in six months and describing some of the challenges he faced managing assets in crime-ridden neighborhoods.
Garrett shares his experience owning and operating a 381-unit, class D apartment building in Memphis, walking us through the steps he took to end gang violence onsite and increase occupancy to 90%.
Listen in for Garrett’s insight around the pros and cons of investing in class D properties and find out what he learned about problem-solving in a high-stakes situation that he brings to the team at Nighthawk!
Key Takeaways
What inspired Garrett to start a real estate investing company
- Background in wholesaling, worked for multifamily operator
- Lost $50K in stock market as victim of Ponzi scheme
How Garrett started building a real estate portfolio
- Recourse debt from local banks on 2- and 3-flats, SFHs
- 300 properties in 6 months on south side of Chicago
The greatest challenges Garrett faced managing class D assets
- Tenants = drug dealers, working girls, pimps and gangs
- Only way to get cashflow through section 8 vouchers
Garrett’s experience operating a 50-unit nicknamed ‘Amityville’
- Sensors broken on steam boiler (didn’t do due diligence)
- Gross income of $20K/month, gas bill of $35K/month
The pros and cons of owning class D multifamily properties
- Cashflow higher than average
- No appreciation value
Garrett’s experience buying a 381-unit property in Memphis
- $250K down, bad loan with bridge lender
- Seller missed closing, on the run from gang members
What Garrett did to curb crime at his Memphis property
- Hire private security company and install cameras
- Fence property and establish 10pm curfew
- ‘30-minute eviction’ after each of 3 onsite gang shootings
Garrett’s top lessons learned from his Class D experiences
- Problem-solving skills on life-or-death level
- How to overcome obstacles and ‘make it work’
What Garrett would do differently if he could start over
- Attend events to build more relational capital
- Get exposure to people doing different types of deals
Connect with Garrett Lynch
Related Articles
The Right Insurance Policy for Your Real Estate Portfolio
What Are the Three Classes of Real Estate Investment?
Resources
Learn More About Michael’s Mentoring Program
Join the Nighthawk Equity Investor Club
Download Free Resources from The Freedom Vault
Financial Freedom with Real Estate Investing by Michael Blank
Housing Choice Voucher Program Section 8
