He Sold His Car to Buy His First Property: Now He Owns 40 Rentals!

BiggerPockets Real Estate Podcast

Lawrence 'Landlord Larry' Guerguis shares his remarkable journey of building a 40-property real estate portfolio starting as a college stude

Key takeaways

• Sold personal vehicle for $16,000 to fund the first duplex purchase in Peoria, Illinois.
• Utilized DSCR (Debt Service Coverage Ratio) loans to acquire property without traditional W-2 income.
• Leveraged Section 8 programs to secure reliable, government-backed rental income.
• Expanded portfolio from a single duplex to approximately 40 single-family homes in just a few years.
• Used social media presence on Instagram and TikTok to build credibility and attract private money lenders.

Main topics

• Real estate investing strategies
• Section 8 housing
• DSCR loans

Notable quotes

The government never misses a payment.

Conclusion

A powerful testament to how young investors can use niche markets and

Transcript preview

Speaker 2 (0:00) Today's guest owns 40 rental properties, producing thousands in monthly cash flow, and he's only been in real estate for a few years. Before real estate, Larry Gerges thought he'd be spending the next 40 years of his life working on Wall Street. But one conversation with a regretful investment banker changed his trajectory and set him on a path toward financial freedom through real estate. Larry knew he wanted to buy rentals, but how? He was a college student living in California with no W-2 income, so he couldn't possibly buy a rental property, right? But Larry wasn't taking no for an answer. He sold his car, scrounged together a down payment, and bought a duplex in a Midwest market he could actually afford. Then... With proof of concept and a few hundred bucks lining his pocket each month, he moved to Cleveland, Ohio, where he has built a real estate portfolio of 40 single family homes and counting. Today, he's sharing how he bought deal after deal without qualifying for traditional bank financing. From focusing on low price but high cash flow rentals to locking in higher rents with Section 8 investing, Landlord Larry has found a formula that really works today. Speaker 2 (1:18) What's going on, everybody? I'm Henry Washington, co-host of the BiggerPockets podcast. And today we have an investor story with Larry Gerges. You might know him as Landlord Larry on Instagram and TikTok. So let's bring him on. Lawrence Gerges, better known as Landlord Larry. Welcome to the BiggerPockets podcast, Speaker 1 (1:37) my friend. Thank you very much for having me. Appreciate it. We Speaker 2 (1:40) like to start off by learning a little bit about who you are, what you do, and how you even got into real estate in the first place. Speaker 1 (1:46) My name is Larry or Lawrence. Some people call me Landlord Larry on the internet. I'm from California, Southern California. And I started investing in Section 8 real estate, particularly during my junior year in college. And I did take a big leap from Southern California from the people that are from there. They know it's a very nice place to live. And I moved to the Midwest to do it full time right after college. So thank God it's been a blessing to do it. And I've been doing it for a little over three years now. And it's been great. What even Speaker 2 (2:17) sparked the interest in real estate? Because college is not that path. No, Speaker 1 (2:22) college isn't that path. And it wasn't always real estate for me. It was originally investment banking. Speaker 2 (2:27) I Speaker 1 (2:28) thought I was going to be the typical finance bro. Finance bros. Yeah, that was going to be my path. Living in New York, working crazy hours. It's a pretty funny story. I was actually just out at the bars with friends during my junior year of college, my first semester. And like I said, I went to college in San Diego. It's a fun place to be. But we were at a bar and then we went to a pizza parlor right next to it. And there was some guy that's sitting next to me. He looked a little down. He was just kind of on his own. And I was like, hey, bro, everything all right? And he was like, don't talk to me. I only get two weeks out of the year off. And I was like, okay, what do you do by chance? And he was like, I'm in investment banking. Like, I'd love to talk to this guy. Okay, let's hear it. So I ended up talking to that guy in that pizza parlor. My friends leave for like an hour and a half. And he gave me some pointers. The thing that really stuck with me from that conversation, he asked me if I loved money. Not liked, not enjoyed spending it, loved. And I said, no, no, I don't love money. Money's great. I think everyone enjoys having a little bit more of that. But loving is something different. Speaker 2 (3:35) And Speaker 1 (3:35) I didn't love it. And he said, forget about investment banking. Forget about anything finance. Because that's what you need to have to work these crazy hours. And you make great money. But he says, you know, he doesn't even have the time to spend it. And I was like, all right. So after that day, I was like, we're going to figure out this real estate stuff now, you know, before we graduate so that we have like some sort of path coming out of college. Speaker 2 (3:58) All right. Okay. So you got tapped on the shoulder and you took it seriously. So how did you go from that moment? to actually taking action and working towards your first deal? I Speaker 1 (4:12) ended up selling my car, my first car, and I sold it for around 16 grand. Okay. And I was like, listen, I don't need a car. I have a family hammer down car from 2008. I still drive that car. I love that thing. And I was like, I'm going to sell this and we're going to figure out a down payment for something. Speaker 2 (4:30) So you didn't buy in San Diego? No. Unfortunately, Speaker 1 (4:34) I didn't have the budget for it. Didn't buy in San Diego, didn't buy anywhere in California. Pretty much I just went on Zillow, Redfin, all those websites, and I put my budget in. I put like $70,000 max purchase price. And the states that came up were Ohio, Missouri, Illinois, parts of Illinois, Alabama, all these Midwestern, Southern states. I was like, okay. So now we're not investing in our home state. We're going to have to figure out management. For me, it was like, we're Speaker 2 (5:03) going Speaker 1 (5:03) to figure this stuff as we get there. As long as I get the ball rolling, then I'm going to make a mistake. And even if I buy a house, the loan payment on it's $400. That's Speaker 2 (5:13) a Speaker 1 (5:13) $400 monthly mistake that I'll figure out over 30 years. Speaker 2 (5:16) So I ended Speaker 1 (5:18) up coming across a place called Peoria, Illinois. Oh, yeah. I've been there a couple of times. It's interesting. I didn't go there to look at the property. I pretty much just trusted some handyman I found on a Facebook group. Speaker 2 (5:31) Seems legit. I see no problem with this. Speaker 1 (5:33) Oh, yeah, yeah. Legit's the word we'll use. So yeah, I was just... I joined all the Facebook groups in the Peoria area. And I just found a handyman. And I was like, hey, man, I just need you to go look at this property and see if it's not awful. At the time, even if he told me things that were wrong with it, I wouldn't know. Like I said, I'm college finance. I don't know what a water heater was, none of that. So I pretty much just needed a thumbs up or thumbs down from him. He gave me a thumbs up. Don't know the reliability on that, but I took it. Okay. And I ended up buying that house. I put around 15.3 down. Purchase price was 70? 65. So you did a conventional mortgage? I did a DSCR. Because I don't have a W-2. I have no pay stubs, no income. So the only one I applied for was DSCR. And closing took forever. And even to get the pre-approval before took forever because I was looking for a lender that go down to that loan amount. And the place where I found them was actually BiggerPockets. Like during class, I was scrolling through like, you can even see my history. It's just like sub 100K loan amount DSCR. And I'm like, does anyone know like a lender? Finally got connected one. and bought through him. One thing you said that I Speaker 2 (6:47) liked was you thought through what the fear was, the worst case scenario, right? What's the worst case scenario? I buy a house and my mortgage payment is 300 bucks. And if it doesn't go well, I'll just be stuck paying 300 bucks a month for a while. Like I can figure that out. Speaker 1 (7:02) Yeah. When we break our fears down sometimes and Speaker 2 (7:05) we figure out, okay, well, what's the real consequence to the action that I'm taking? We sometimes realize that the fear is not that big of a deal. So I like that approach you took. And I want other people to do that. If you're stuck in a decision, break down your fears. What's the worst case scenario? And can you survive that worst case scenario? Can you get back on your feet and not compromise your family's well-being, the roof over your head? Those things are important. But if it's just like, yeah, I might lose some money, but I'll be OK. I don't know. Might Speaker 1 (7:32) want to rethink that calculated risk. Yeah, exactly. The Speaker 2 (7:35) other thing. You just started putting in your budget on the realtor to look for a place to invest. And you landed on this property in Peoria. So Speaker 1 (7:46) purchase price, $65,000-ish. You put Speaker 2 (7:49) about $15,000 down. And you said it was fairly turnkey. So no renovations? Speaker 1 (7:53) Not much, no. I maybe put a couple hundred bucks in paint, painted some walls and stuff like that. And then that's about it. Speaker 2 (8:00) And then you needed a tenant. Yeah. How long did it take you to find one? Speaker 1 (8:04) I needed not any tenant. I needed the perfect tenant because I couldn't afford a non-payment. Otherwise, I wouldn't make the mortgage payment. It took me a couple months, to be honest. It wasn't immediate because I started advertising just on Zillow. And I was getting a bunch of people and I was kind of messing around for the first time with tenant screening websites. Which ones did I like? Which one gave me the information I needed? I ended up just kind of thinking, I was like, okay, if I need a tenant that's going to pay me for sure, let's look into Section 8. So I was like, hey, let's take a look at it. I mean, baseline, like if I sign this government paper, I should get paid rent, right? And I was like, okay, so like, let's start to, you know, advertise on affordable housing. Advertise on affordable housing, found a couple tenants. It's, you know, very light screening, like screening wasn't really good at all.