The Dirty 30: Buying up Massachusetts’ distressed apartment complexes

Dan Botwinik has made a full time career in property investing by purchasing distressed apartment buildings in Massachusetts. This is despite the fact that he overpaid for his first investment. Since then, he has gained a lot of knowledge and expertise from his direct mentors. Today, he has a valuable portfolio with Cougar Capital Real Estate, and a track record for delivering profitable returns and significant equity creation.

Name: Dan Botwinik
Current Age: 32
Started investing: a two-family house in Massachusetts

How much real estate do you currently own?  
I have been purchasing distressed apartment buildings in the “Gateway Cities” of Massachusetts since 2008, mostly focusing on areas around the 495 belt in geographical clusters. I have 258 units currently in the portfolio, a mix of market rate and affordable housing, with both residential and commercial components.

How did you get started in property investing? What inspired you to put your money in real estate at such a young age?
I bought my first property, a two-family house where I still live, at the top of the market in 2005. Although in hindsight I realized I had overpaid, overall I decided that I liked real estate.

By the time I was 27, I resolved to get into the business full-time.

My total savings were insufficient to buy anything on my own, so I began seeking investors and apprenticed myself to experts in the field, who gave me hands-on experience in exchange for hard work and enthusiasm.

Your generation seems to be redefining what it means to be successful. What does success look like to you?
For me, financial success is having the freedom not to worry about money. I’m not there yet by any means, but I like to think I’m moving in the right direction. Warren Buffett once said that he wanted to leave his children enough money where they could do anything, but not enough so that they could do nothing. That makes sense to me.

Success in other areas of my life, I measure in a variety of different ways: by what makes me happy, how I can help the people that are important in my life and those less fortunate, and by making sure that I enjoy what I do and that I find it rewarding beyond simply a financial return.

What’s your best advice for someone wanting to start investing early?  Do you have any investing mentors?
Saving money promotes good discipline, and investing wisely while young allows compound interest to work for you. I decided early on that rather than try to get smart about all of the other investment vehicles out there, I would specialize exclusively in real estate. I like being able to see the bricks and mortar, and knowing that I have the power to directly control my portfolio no matter what is going on with politics or the global economy.

Real estate itself is a complex vehicle; it has a constant learning curve and it is difficult to get bored.I was lucky enough to find people who were doing what I wanted to do, and who were willing to share their experience and advice with me when I was getting started.

I was also lucky enough to find investors who were willing to give me a chance before I had developed a track record.

What are your future investing goals? Can you share a little bit about your plans?
I have developed a strong management capability through my management company, and it makes sense to grow that strength. I am also expanding to become more integrated in the other aspects of the real estate; from brokerage, to capital raises, underwriting, development, management, and financing.

My next acquisition will likely be a 70-unit apartment complex scheduled to close in January 2013, and with hard work and a little bit of luck, I hope to be able to continue to strengthen and grow an increasingly valuable portfolio consisting of buildings where people want to come to live and work.