I finally got off the couch in 2016!

[Steve Bauer]

Hi Everyone - 

It may seem insignificant on the surface, but I'm actually struck by the fact that I'm finally posting on the BP success stories forum!  As my title implies, 2016 was the year that I actually got off the couch and became a legit investor, going from 0 to 3 rentals.  I know that's small potatoes for some of you, but it's a pretty big deal for me and it has really lit a passion that I could see growing for the rest of my life.  

I'll start with my advice up-front as most of you won't make it all the way through my ramblings. If you learn nothing else from me (and that's highly likely), please consider these 2 points, they completely changed my life. Turn your car/commute into a classroom. Listen to podcasts or audiobooks while you commute. I commute 30 min each way to work and have added an hour of knowledge to my life every day. I cannot even quantify for you the value that's added to my life. If you're here, you're probably already familiar with the BP podcast and I very highly recommend it as a place to start if you haven't already. Let it snowball from there. Point #2: take some kind of action, even if it's small. My first action was to look up my local REIA and start to attend meetings. That sparked ideas and helped me find contacts that could get me started. I won't go into more detail on this one as that point will be reinforced all over the forums here and in tons of the podcasts.

Now, onto the story of 2016. I added 3 rentals to my portfolio, which far exceeded the goal I set at the beginning of the year of adding 1! Each was a unique situation and each utilized a different method, perhaps adding credence to idea that it's important to have a number of different tools in your repertoire and to ask yourself 'how can I make this happen' as opposed to assuming that something isn't possible. My first rental was acquired the old-fashioned way: I married into it. That may seem like cheating, or at the very least, a very creative 'financing' strategy, but to me it was also an indication of something bigger. The fact that I was marrying someone that was already in the REI mindset was critical and helps me to avoid a lot of the pitfalls of having a partner that's not fully supportive of my pursuits.

My second rental was acquired a little more conventionally by moving out of my previous primary residence to a new house but converting that previous residence into a rental rather than selling it.  I had been interested in moving to my new 'forever home' anyway and this presented an opportunity to finance my new home at 10% while retaining my old home to add to my rental portfolio, thus reducing my barrier to entry a bit.  Also, due to the fact that I had some equity in that home and had refinanced relatively recently, my payments are relatively low, allowing me to cash-flow nicely.  

My third rental was the most fun and probably the one that added the most to my REI passion. We used the BRRR method with the help of a hard money lender and then a refinance into a conventional loan. We bought a foreclosure and spent our free weekends and evenings fixing it up. We learned a ton through the process (like it's easy to be penny wise and pound foolish and that I'm not the best drywaller, etc.) and mostly just had fun. Ok, it wasn't all fun and games and we had a few near-blowups. It was also tough to spend some beautiful MN weekends inside a musty old house up to our elbows in dog pee stained carpeting, but in the end, we're very glad we took the plunge. Due to the way we worked our financing, it also required very little out of pocket to actually finance it. I'm now a HUGE fan of this method and hope to lather/rinse/repeat this as much as possible.

As New Year's approaches, it's been a lot of fun to review my goals from the past year and see how much progress we've made.  It's great to blow away your 3 year goals within a year and start to realize just how much is possible when you finally decide to take action.  I'm now planning to take some more advice from the BP podcasts and 10x my goals for this year.  I also need to work on becoming a better landlord, but fortunately, I think there's a book or 2 for that ;)

I've babbled on long enough, but I should end with some 'Thank You!'s.  First and foremost, the BP podcast for providing me ongoing inspiration and information.  Without it, I wouldn't have been confident enough to finally start making deals.  I also should thank @Bruce Runn who I met on the forums and who took a little time with me early on to have coffee and explain his process to me.  Thanks a lot Bruce!  Seeing your system and hearing from you that it could really work validated my thought process and helped me get out the door.  

Best wishes to you all in 2017!  If you haven't started yet and are struggling to figure out how to make this the year you break in, please take some encouragement from my story.  I was right there last year at this time with a dream: 

Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world. Joel A. Barker

Thanks;

Steve