- Profit Strategy: Wholesale
- Number of Units: 2
- Amount Earned: $2,500
- Prior Experience: Been involved in real estate for nearly 20 years, starting with a duplex as his first purchase. Since then he’s purchased and rented out a few small apartments.
Here’s his story:
Garland Ferguson is unique among graduates from Lance Edwards’ boot camp in that prior to getting involved in wholesaling small apartments, he had nearly 20 years of experience buying and wholesaling single family residences in his longtime hometown of Columbus, OH.
When he wholesaled his first post-boot camp property, a duplex, in August 2015, it was something of a full circle experience for him, marking 18 years since he bought his first duplex in the city, which the Navy veteran had bought with a VA loan. In between, however, Garland’s focus had shifted to wholesaling single family residences, and by the time of this deal, he had nearly 60 under his belt. Considering that he only netted $2500 from the deal – buying it for $8,500, selling it for $12,000 and deducting a $100 earnest money deposit – his triumphant declaration to Lance about the transaction was surprising.
“Yes, I had already done duplexes and 4-plexes in the past, but I bought them with conventional bank loans, so they didn’t count to me,” Garland said. “On those, and so many of my single-family deals, I put my money out there and had to deal with mortgages on those properties. My goal when I first got going into wholesaling was to have 100 units in four-plexes, but I got caught in what I call the ‘house trap’ and started focusing on single family residences and pushed those ambitions to the side. I was doing well overall, but felt like I needed to graduate out of houses to bigger deals. This smaller deal was the first step in that direction.”
Using his RealQuest membership, he located some multi-family properties and, choosing to go old school and add a personal touch, he sent over 200 handwritten letters to potential sellers. Upon receiving one, the owner of the duplex reached out and told him it was a probate property she and her siblings had inherited. Though she and her sister were still living there, they wanted to unload it. Garland went to check it out and told her he could work with them. She asked for $20,000, but based on what he saw – and the fact that the other tenant wouldn’t let anyone in his unit – and some comps, he offered $8000. She countered at $10,000 and he said he had to consult “my committee” (a useful ruse). She accepted $8500.
He immediately sought out a potential buyer for the property. Not receiving any feedback on the small (250 people) buyer’s list he accumulated, he did a “post-lit” flyer that was distributed to many different websites – and he got a hit on Zillow. Garland had priced it at $15,000 and the prospect, a first-time buyer, offered him $10,000 cash. Garland countered at $13,500 and they settled on $12,000, with the stipulation that the buyer pay all the closing costs. “The man was eager to get started in real estate, and had some money saved up to buy some rentals,” he says. “Even though I still couldn’t show him the unit with the tenant, he thought the price we arrived at was perfect.”
This deal rekindled Garland’s excitement about multi-family properties. “Putting these transactions together is no different from doing single family houses,” he says. “Although it took a while to close because it was a probate case, everything else, including the process of getting it under contract, came together fairly quickly.”
Garland first caught the real estate bug in a course he took while earning his finance and economics degree at Ohio State. The seeds of Garland’s interest in multi-family properties trace back to a fourplex he bought in 2002. Inspired by the amount of money it was generating, he told one of the real estate investors he trained with that he wanted to own 100 units, broken down to 25 fourplexes. The investor shot back, “Why not just buy a 100-unit building?” The idea had been percolating in his mind over the years, but as he and his wife started a family, it made more sense to devote his time away from his longtime job as a financial management analyst for the Department of Defense to his old standby, single family homes.
Family has always been an important foundational part of Garland’s life and has played a major role in all aspects of his real estate investing career – starting with the first duplex he bought, which he found because his future sister-in-law lived there. The deeper driving force behind his desire to generate the kind of income that can come with shrewd real estate investing stems from a shocking realization regarding his mother’s financial status in the early 90’s.
“After working as a supervisor at a hospital cafeteria for 25 years, my mom got breast cancer and was put in a situation where she was forced to retire,” Garland says. “Considering my background in finance, I thought I could help her and that she would be okay. I was stunned to discover that she had only $25,000 in her retirement account. I couldn’t believe that someone could work for a renowned institution for a quarter century and that’s all she had. I started taking some of her money and putting them in mutual funds and they grew a little bit, but I knew there had to be another way. I realized then and there that I never wanted to be in that scary situation myself. And that at some point I needed to get started on securing my own financial future.”
Garland, who still owns that first duplex he ever bought, is keen on passing this insight and his love for deal making on to his daughters, who are now 10 and 12 and budding entrepreneurs in their own right; the older one makes and sells her own lip gloss and the younger makes and sells bracelets to kids at school. “I always have them thinking outside the box about their future, beyond just going to college and getting a job,” he says.
“I take them around to the different properties I have had and sometimes they’re not in neighborhoods like our own so they get scared. I tell them that we own these buildings and properties because all people need a place to live. I also remind them that they will help me pay for their college and that one day, these places could be theirs. The girls also help me with marketing and stuff the lead generating yellow letters into envelopes. I see myself as a regular guy out here trying to do my thing in real estate to help make sure my family is well taken care of.”