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Multifamily investing: How Logan Allec ‘accidentally’ discovered real estate investing

Multifamily investing: How Logan Allec ‘accidentally’ discovered real estate investing
by Brad Cartier, posted in Investor Stories

The Stessa Investor Series is a monthly spotlight on real estate investors who are building and scaling their businesses. In this month’s interview, real estate investor Logan Allec tells us how he began investing in multifamily property with only 3.5% down.

Real estate investor Logan Allec currently owns a duplex and two single-family homes in the Los Angeles area. Logan started out working as a CPA, so he already knew about the tax advantages of investment real estate. After working with other real estate investors, he set out to build his own rental property portfolio and has never looked back.

1. Tell us about your real estate background – why you started investing in real estate, how long you’ve been doing it, and how it fits your lifestyle.

Answer: I never really thought about investing in real estate until I started my career as a CPA. Many of my clients were real estate investors. Working on their tax returns really opened my eyes to just how profitable real estate investing could be.

I began educating myself and doing a lot of market research. Somewhere along the line, I read about how you could buy a 3- or 4-unit property with only 3.5% down. I made that a goal of mine, which I finally achieved four years ago.

2. What does your real estate portfolio consist of today?

Answer: When I was in my mid-20s I purchased a 4-unit multifamily building in the Los Angeles area. I used an FHA loan and today the building is probably worth between $500,000 – $600,000. The property is a bit unique since it’s a duplex and two small single-family homes all on the same lot.

I’m also an active investor in commercial and multifamily syndication deals, focusing on passive investments as a limited partner.

Multifamily investing: How Logan Allec ‘accidentally’ discovered real estate investing

3. What’s your investment strategy?

Answer: My first multifamily investment property has done very well, so I plan on sticking with that asset class. I’d like to acquire two or three smaller multifamily properties in solid Midwestern metro areas. California is too expensive for now, but I’ll look for opportunities to buy if and when prices temporarily cycle downward.

4. Why did you start using Stessa?

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Answer: Probably like most beginning real estate investors do, I started out by using a spreadsheet. That’s because with only one property I couldn’t justify the expense of using a product like QuickBooks or Xero.

Then I came across Stessa and I was thrilled to see that they provide a free online solution for DIY investors to track their properties from both a financial and tax perspective. The dashboard reporting on Stessa makes it easy to see at a glance how my property is doing. It’s also a much better way to track the return on my real estate investment than the spreadsheet I had been using.

5. How do you use Stessa to track and manage properties?

Answer: I take full advantage of all the features that Stessa offers to real estate investors. Things like tracking my property financial performance in real-time and securely storing tenant documents and invoices.

Before I began using Stessa I stored my property documents on my computer and used a spreadsheet to track financial information. Stessa has really helped me to streamline the management of my rental property. I can keep all of the data in one place and access my rental property portfolio online 24/7 from anywhere in the world.

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6. What’s been your best experience with real estate investing so far?

Answer: A few months after I bought my multifamily property in Los Angeles, I started reading about direct mail strategies to prospect for off-market property owned by absentee landlords. ‘Off-market’ means property not listed by a real estate agent on the MLS. So, I began sending out letters and yellow postcards in my farm area.

My efforts paid off almost immediately, and I ended up making an incredible deal on a single-family home in Kern County, California. I typed up my own contract, met the seller at a local McDonalds, quickly closed escrow and paid all cash.

It was a rental property, and the owner didn’t have the heart to evict the deadbeat tenants. But I did. The occupants were behind on their rent, so I promptly evicted them and re-rented the house to qualified tenants who paid on time. From then on, the property cash-flowed very nicely.

A couple of years later I sold it to focus on multifamily investing and real estate syndication deals.

7. What’s the biggest mistake you’ve made and what did you learn from it?

Answer: I waited far too long before buying my first rental property. It’s way too easy to overanalyze and suffer from ‘analysis paralysis’. I would urge younger investors to not get cold feet and just pull the trigger!

Now, don’t get me wrong. Doing research and thorough due diligence on the real estate market you’re investing in is critical. But personally speaking, for years I kept kicking the can down the road before finally buckling down and taking the steps necessary to become a successful real estate investor.

8. Looking back, what’s the one thing you wish you’d known when you first started investing in real estate?

Answer: I wish I’d known two things.

First, how much things really cost in terms of maintenance and repairs. When you look at the line item expense for repairs on a P&L you don’t really get the true picture. Taking a quick trip to my neighborhood Lowes or Home Depot would have easily told me if the proforma numbers I was reading really made sense.

The other thing I wish I’d known, which goes hand-in-hand with the cost of repairs, is how important it is to have a network of reliable vendors and repair people.

When contractors and handymen know you’re a serious real estate investor and will send more business their way, they’re much more likely to give you competitive pricing. I’m pretty sure that on my first few negotiations I got taken advantage of because the vendor thought they’d never see me again.

9. What’s your favorite book on real estate investing?

Answer: I’m a pretty voracious reader because I think it’s critical to keep learning as much as possible. But hands down, my favorite book on real estate investing is The Millionaire Real Estate Investor by Gary Keller.

10. What’s your favorite thing about Stessa?

Answer: Stessa has everything I could ask for to track my rental portfolio, and it’s so fast!

Start investing in real estate as soon as you can

If there’s one thing professional real estate investor Logan Allec could do differently, it would be to start investing in real estate much sooner than he did. He currently owns a nicely cash-flowing multifamily property in the Los Angeles area and is on the lookout for more while he spends time on his personal finance blog, Money Done Right.

Logan uses all of the rental property financial management features that Stessa offers, including tracking property performance and secure document storage in the cloud.

  • Start investing in real estate as soon as you can
  • Stick with an asset class you know like multifamily rental property
  • Select a farm area for prospecting to absentee landlords and off-market deals
  • Use Stessa to streamline your real estate investing business and scale up your property portfolio