The least impressive story on owning 4 properties. But it worked!

[Travis Salley]

Hey BiggerPockets Family,

    I just closed on my fourth property and I felt that it was important to share how I got started in real estate investing. There are many superstar stories on BP, mine has been more of a grind. However, I hope that my story might inspire someone who may not have the skills to flip houses or to search endlessly for leads.

    In 2016, I bought my first house in Charlotte, NC for about 210K with pretty much zero down as a first time home buyer. My wife and I together made about 80k at the time. In 2017, I made the switched from the Army Reserves to Active Duty and had to move to my new assignment. We actually tried to sell that property, but I'm so glad we didn't. We would have MAYBE broke even, and we would've gave up an extremely valuable asset. So we listed the property with a manager and cash flowed maybe 150-200 a month. This house will be important later.

As an active duty officer, my income went up but my wife stopped working as we had our first baby. Unfortunately, I was deployed for most of 2018. The silver lining is we were able to pay off almost all of our consumer debt since I was overseas. We followed the Dave Rasmey method pretty rigorously up to step 4 (have an emergency fund and pay off all consumer debt.) From 2016 to the end of 2018, we paid of 60k in debt. The benefit to us was we learned how to live on a limited budget, and we created a strong foundation for investing in the future.

We bought another house to live once I returned in the Savannah area, for about 220K. I had to move again for the military in 2019, so we listed that house for rent. We did that one ourselves, since I had such a bad experience with our first property manager. We listed on zillow and had almost 30 applicants in 24 hours (lesson learned: I think I underpriced the rent). Much like the first property, we cleared a few hundred dollars a month. Not great, but hey with the first house we were sitting on 400 a month. Not bad!

After the most recent move we bought another house, that I know I can rent for quickly and cash flow when we have to move again. The difference now is since we had two houses cash flowing, and no debt (aside from mortgages), we were able to save up pretty quickly. I make about 100K in the military. I saved up 20k and found a turn key rental in Cleveland for about 65k. I put 25% down. The mortgage is about 375 but it rents for 1200! Now were making some headway. I would say on average we make a little more than a thousand a month across three properties. But now it should be even faster before I can save up for the next one.

The next move is liquidate the charlotte house and 1031 into either a multifamily or a portfolio of small SFRS. Although, I never made much in cashflow, but it has appreciated like crazy. I expect I have about 100k in equity, which is crazy to think about now since I probably overpaid for that property. Once I 1031 that property, Ill use the money to pay down my other SFRS that we previously lived in and do the same thing.

The moral of the story. I paid off all my consumer debt. I bought houses to live in that I knew would rent well when I left. I took a chance on a turnkey that worked out. 

This is not the sexiest BP story, but its a start!

[Steven Griffith]

@Travis Salley

Thanks for sharing! Do you think your Charlotte house will continue to appreciate? Are you looking for more buy and hold, or something different?

One thought I had is that: if you have that much equity but want to keep that Charlotte house, have you thought about getting a HELOC on the house to access the equity, but keep the asset? Your rent here or elsewhere would need to cover the HELOC payments, so it may cut into the cashflow in the short term, but if the house is going to keep appreciating this will let you keep the asset.

Another benefit to the HELOC is you don't have the same time restrictions as the 1031. Of course, using a HELOC pairs will with doing a BRRRR where you'd pull the equity out to pay off the HELOC sooner, so you're almost like your own bank, but if your rent is high enough the cash flow may cover the HELOC and stoll have room for profit.

Like I said - just a thought! Thanks for sharing your story, and thank you for your service!