How I replaced my six figure income in two years.

[Mike W.]

September will be 2 years ago that I started this process. My first purchase was a house I learned that trying to use family to do the rehab is a bad idea. That process only took me about 2 months I know I'm slow my wife took longer to convince because it was our child and as most parents we hope the best for our children. We collected our first rent check 9 months after purchase. $1K 

My next purchase was a duplex that appraise for 45 and was purchased for 35 and rented for 1025. It is a 100 year old house converted into a duplex. My responsibilities are maintenance and Lawn Care. I haven't had a maintenance call for this property in approximately one year. My policy is quality work prevents callbacks.

At this point I did not think I had any more money to invest so I took out a $40,000 401k loan and was then notified the company was cutting my pay by 20%.

I then found a house thousand square foot 4 bedroom 2 bath costing $9,000 at auction. I did a prehab on it replacing rotten wood and termite damage about $2k in materials and my labor then sold it for 18k. 

My next purchase was a fourplex 1925 a month income purchased for $93,000.

Then I found a fourplex in the same complex for $43000 I did a $16,000 rehab on it and raise the value to $100,000. And then purchased another fourplex for $76,000 did some painting and minor repairs revalued at 100,000.

One month ago I purchased 4 fourplexes in the same complex at $91,500 each appraisal showed 100000 each value.

And the 20th of this month I am closing on 4 more using the first house I bought as down payment. 

 I have been doing all of this using equity in previous purchases, my house, a 401k loan and 2 pieces of land that I had previous to starting. 

When it is not your purpose to receiving income from your rental properties it is possible to grow your business rapidly.

I have found it in the units that I am purchasing maintenance has been a major issue. The previous owners did not want to spend money on maintenance therefore there were continuous callbacks. I have replaced more refrigerator seals and cleaned more air conditioners in the last 2 years then I remember ever working on. The minor maintenance issues where due to using maintenance people who charge the lowest amount possible. If someone is charging a very low amount it is usually because they do not have other work and need the next paycheck. When they are this desperate they do what is necessary to say they did the job but do not put in the extra effort to make sure the job is done correctly. The attitude of if I pay less it is better does not work in the maintenance world. And that is why I am getting some properties at a very low rate allowing me to capitalize on the owners lack of Maintenance knowledge.

I know that because of me doing the maintenance and Lawn Care I have not stepped into Financial Freedom yet but I feel that I am well on my way.