One Year Later - 10 units and full time investor

One Year Later - 10 units and full time investor

Jacksonville, FL · Member since 2016 · 76 posts · 130 votes

It was about this time last year that I discovered Bigger Pockets and found what I was looking for - a way to escape the boring, restrictive 9-5 life while doing something enjoyable and generating wealth. I caught the real estate investing bug and started listening to podcasts and reading articles for hours a day.

I kept hearing experienced investors say to jump in, so I did just that a few months later. By August, I had closed on a quad and was officially a real estate investor. Around that time, I partnered with a friend who was also interested in REI. By my 24th birthday at the beginning of this year, we collectively owned 10 units / 4 properties. We've done a house hack condo, a BRRRR triplex, and duplex and quad rentals.

This has given me the freedom to go into real estate investing full time while my business partner is sticking it out at his job to help us qualify for mortgages. This month, we've put a live-in flip and a BRRRR quad under contract, and we have another duplex in verbal negotiations that looks very promising.

It's easy to get frustrated when progress seems slow, but rewarding when I can look back at my first year in real estate and see we made it to double digit doors while earning enough to go into real estate investing full time. I can't thank BP enough for the advice and wealth of information. We are currently looking for connections in Jacksonville, FL, Greenville, SC, and southern Delaware to grow our business if anyone is interested. Thanks BP!

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Jerry W.Pro Member
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Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
9y

Congratulations @Ethan Lee.  You have done very well.  I have been investing part time for almost 20 years and have not been able to leave the day job yet.

@Sam T., welcome to BP. BRRR is a buy, rehab, rent, refinance, repeat. it allows you to keep pulling money out to do rehabs over again. House hack means to live in a property while you rehab it. Often it is your primary residence to take advantage of the no capital gains from the sale of your primary residence for 2 of the last 5 years, but not always. you might start reading up in the education section above, it is loaded with tons of great information. Good luck.

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  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    Thanks @Account Closed! Absorb as much as you can and start evaluating deals, even if you don't have the money, so that you're good at it and can jump on a good deal as soon as you're ready. Good luck!

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    Thank you @Alex Shaughnessy! @Lauren Lockett thanks, let's grind this out and build empires! haha. Means a lot @Kalyanii K. thank you!!

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Eugene Beard I just moved from LA to Florida. I started investing while in LA, but the numbers worked much better elsewhere, so I started with out of state investing in the town I grew up in in Delaware. Now we have rentals there, in South Carolina where my business partner lives, and working on getting some here in Florida. 

    We typically look in C areas as they offer the most cash flow without being too low income or dangerous. Cash flow is our priority until we can both go full time and make $5k+ per month, then we'll transition to more steady/passive/appreciation areas that will give us the best chance to grow long term wealth. They'll also be easier to manage which is important as our portfolio grows. Hopefully this will include apartment buildings as we move bigger over time.

    We pick the best deals we can find in all three locations, put them in our calculator to figure out a return, then do in depth research to see if a deal is worth the risk/reward! We won't look at anything unless it's at least 20% cash on cash return, although we prefer the 30-40% range (especially since we're in C areas) which we've been able to get on a few of rentals so far thanks to great deals on the front end.

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    Thanks @John Moon! Yes it's 50/50 although I own one property by myself from just before we started our partnership, and he owns his primary residence himself that he house hacks. I have the majority of the total cashflow because the property I own myself is the largest in our portfolio (for now :) 

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y
  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Rich Becker yes we set up an LLC. We've been told conventional loans are extremely difficult (if not impossible) to get under a business name, so we acquired them in our own names and will transfer them to our LLC. We've read that this may trigger the due on sale clause and banks could call our loans in the future, but apparently this is highly unlikely to happen. Moving forward, we will struggle to get conventional lending with our current DTI and rental income not showing up on tax returns quite yet, so we will probably use portfolio lenders, which are easier to use with an LLC.

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    Thanks @Mustafa Aziz! Keep plugging away @David Wong I'm a fan of starting out in real estate in a related field to gain experience and skills. I just left my job working admin at a real estate office, which definitely exposed me to the industry.

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Scott Matthew C. thanks Scott! I didn't really have a mentor. My parents own a rental and flipped a house, and my business partner's parents have a small portfolio of rentals, but none of them really "mentored" us - more just there to bounce ideas if we asked. My mini mentors were the hundreds of investors on the BP podcast as I worked my way through most of the episodes and did my best to heed their advice!

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @David Grabiner Our partnership is 50/50 although I own one property by myself from just before we started our partnership, and it's the largest in our portfolio. And to be honest we'll lose some cashflow when we refinance a property in a few months as we're not paying interest yet on the current private investor loan. After that our cashflow will be around $200 per door.

    I wouldn't be where I am without frugality! It takes discipline but it's worth it. I've only truly been full time real estate for a few weeks as I took the holidays off, but it's a roller coaster for sure! It's a little tough some days when you don't have the threat of getting fired or someone watching and making sure you're working. Other days are really productive and I'll find myself working in to the night (like tonight). I love it so far. I didn't expect there to be so much emotion involved every day. I find myself really down on days when I didn't get much done, experienced rejection in one way or another, or felt negative about the future. Then I'll be on cloud nine when something finally works out, I find a great deal, a house goes under contract, etc. That's something I need to work on for sure. As it continues to click and come together over time, I'm sure it will be easier to stay nice and steady.

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    Thanks @George Smith, it really is! I really appreciate it @Dana Whicker @Kai Kopsch @Ayodeji Kuponiyi thank you.

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Danielle Laughlin thank you! That's awesome that you broke through that barrier and started your portfolio. In lots of markets like the ones I'm in, multifamily is great for cashflow!

  • Real Estate Broker · Saint Louis, MO · Member since 2015 · 10 posts · 5 votes
    9y

    @Heather Moreland Thanks so much Heather! This is yet another great testimonial. I appreciate the insight. Ive felt in my gut (and head) that a house hack on a multi family with an FHA is beneficial for my situation and goals. This reassures me more. Will continue looking for the best deal I can find!

  • Rental Property Investor · NW, PA · Member since 2014 · 174 posts · 39 votes
    9y
    Originally posted by @Andreas W.:

    @Ethan Lee

    Congrats, Ethen. Your success story is very exciting. I am curious how you can live of the cash flow of 10 units that you share with a partner.

    I was thinking this too. Seems way too thin for one person let alone 2. I have 9 units that produce great NOI, but with loans, I am far away from leaving my day job. Somethings awry..

    Some advice for funding would be to talk to your lawyers.  They have money and the ones around here invest in private mortgages for investors.  Doctors would be a safe bet too.

  • Real Estate Investor · Coopersburg, PA · Member since 2017 · 120 posts · 61 votes
    9y

    @Sam T.

    Brandon Turner has a webinar on BRRRR. I recommend you watch it. Invaluable. Take notes and Good Luck!!

  • Commercial Real Estate Broker · Little Falls, NJ · Member since 2016 · 8 posts · 0 votes
    9y

    Hey Ethan I think we can do business together. I have access to various private lenders and aggressive terms for real estate investing.

  • Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y
    Originally posted by @Justin C.:
    Originally posted by @Andreas W.:

    @Ethan Lee

    Congrats, Ethen. Your success story is very exciting. I am curious how you can live of the cash flow of 10 units that you share with a partner.

    I was thinking this too. Seems way too thin for one person let alone 2. I have 9 units that produce great NOI, but with loans, I am far away from leaving my day job. Somethings awry..

    Some advice for funding would be to talk to your lawyers.  They have money and the ones around here invest in private mortgages for investors.  Doctors would be a safe bet too.

     Not sure if you read through all of the other responses, but the rental income has given me the freedom to pursue real estate full time, it doesn't necessarily give us enough to live on or enough to be considered "financially independent." But it's close. Here is a summary of my situation and how I've made it possible:

    1. Very frugal lifestyle i.e.. bare minimum expenses, no children or pets, high deductible insurances, completely on board wife

    2. No/minimal housing expense - blessed to have free housing for a few months in a relative's second home and will be moving into a live in flip bought with a relative's investment cash, so no payment there yet. PITI on our house would be below $500 a month anyway because we are fine living in an inexpensive house as we work on it.

    3. Income from my wife's job

    4. Income from wedding photography business

    5. We have built up significant savings to keep us going for over a year with our lifestyle if necessary

    6. I am not retiring at 24, but made the decision/risk to go full time into real estate. As Brandon Turner likes to say, I have traded another job for a job flipping houses. The rental income, non-real estate income, and savings allow me to feel fine doing this. Even if I lose all my money and fail miserably, I will still have my rental portfolio providing cashflow and can go back to a regular job.

    Hope this makes sense!

  • Lynchburg, VA · Member since 2017 · 61 posts · 41 votes
    9y
    David Zheng you are cash flowing 900 per unit??? How in the world did you find properties like that?? $108,000 a year in profit on 10 units is outstanding. I encourage you to take on REI full time man if those are the properties you are getting.
  • Investor · Centralia, IL · Member since 2016 · 43 posts · 10 votes
    9y
    Congrats, that's awesome keep up the good work.
  • South Jordan, UT · Member since 2017 · 17 posts · 3 votes
    9y

    Good stuff here Ethan, and congrats!  It's great to hear your story, thanks for sharing.  Im still in the 9-5 and haven't pulled the trigger yet (still in learning phase) but reading your story is great motivation.

  • San Jose, CA · Member since 2016 · 36 posts · 7 votes
    9y

    @Ethan Lee great success story..I notice you were looking for private money. Wish I could help but out funds are only available for CA properties.   If you venture out to CA, would love to work with you.  

  • Property Manager · Northeast Florida · Member since 2015 · 135 posts · 76 votes
    9y
    LaMonica Evans I agree with the responses you are getting. Time to find a different broker.
  • Real Estate Agent · Pasadena, CA · Member since 2015 · 476 posts · 263 votes
    9y

    @Ethan Lee congrats! curious: how much were the properties you bought: (the first quad in particular: how much: what were your rents? what were your expenses? and cash flow?) : thanks in advance 

  • Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    9y

    @Ethan Lee congratulations and best of luck with your continued success. Have you considered going after far larger deals and bringing in outside investors?

  • Boca Raton, FL · Member since 2015 · 249 posts · 52 votes
    9y

    Congrats!  On your way at such an early age!  

  • Real Estate Agent · Ft. Worth, TX · Member since 2016 · 10 posts · 5 votes
    9y

    Congragulations Ethan!  What an exciting time for you and your business.  

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