If you go to my profile you can see the first deal I ever did in October of 2020. It was a househack. Before we go there, lets start from the beginning.

In March of 2020 I was renting an apartment paying $1,500 in rent and much like many of you reading this, I was stuck inside with the world shutdown. All I had was a lot of coffee and a strong WiFI connection.

Attaining Clarity
I had about 5k in savings and wasn't content with that. I then wrote out a monthly PnL, Profit and Loss statement to get clarity in order to plot my trajectory and make a more informed decision and begin to improve my financial position.

Unsurprisingly, my largest expense each month by far was rent. With this in mind I identified the goal as reduce my largest recurring monthly expense. This brought me into the world of real estate and I quickly discovered BiggerPockets.

Singular Focus

Over the next 7 months I set sail on the seas of knowledge in search of understanding. My goal was clear. I wanted to own a property and live in it for free. I added specificity as I went. With my budget in mind I crystallized my criteria. I was looking for a multifamily property I could purchase for 50k/door where rents would cover my fixed expenses of mortgage, taxes and insurance. I set a daily intention and began analyzing 10 deals a day.

People, people, people

As I've progressed throughout life a common theme continues to arise. People > Everything. Business is not as much about business as much as it is about people. Books, podcasts, courses are all helpful in idea generation and foundational knowledge however, it wasn't until I began putting myself out there that real progress began to materialize. I attended the local REIAs and began calling agents, sending them my criteria and going to showings. It took me 7 agents to find one I really connected with and 3 lenders until the last one finally got my business to service the debt. During this period I was still underwriting 10 deals a day and providing feedback on every deal agents sent my way.

Striking gold

In September of 2020 I finally found a deal. I was preapproved and had a total saved up just over 10k from my active income. I'd looked at over 1,000 deals and ran the numbers down to quotes on debt, county tax records, crime rates, utilities, insurance quotes, rents, median income etc...

I spoke with my agent and we went to tour the property. The upstairs was renovated to rental grade and rented at $675/month. The bottom unit was vacant and offered a play for value add to say the least. I offered at asking with owner occupied financing at 10% down with a 4k seller assist, got my offer accepted and moved in a month later. My mortgage payment, taxes and insurance all in was $706 per month. My "rent": $31/Month

Broke as a joke

I poured over 90% of my liquid net worth into closing this deal and was so broke It took me 3 months to be able to afford to install lights in the bathroom and fix the tub/shower. During that period I was turning my shower on with a wrench I borrowed from my dad and showered in the dark. I would prop my phone up on a roll of toilet paper when I took a shower to give me light. I also learned that houses built over 100 years ago don't have the best insulation and since I was too poor to have lights in the bathroom, a new furnace was completely out of the question. Luckily, Cleveland Isn't known for its harsh winters :)

I'm not advising this but it worked for me in my situation. I earned a lot of respect for myself through gratitude and humility during the two years I lived there.

Aftermath

I saved hard. After living on just over $500/Month and increasing my income for 2 years I finally finished renovating my unit. It wasn't perfect, I made mistakes and those mistakes have become incredible stories that continue to fuel my desire and provide amusement. Now, that second unit is rented and the property managed by a property management company. I've since gone on to owning 12 doors residentially and launching my first commercial net lease fund acquiring $5,000,000 in our first year and hitting our return target. I was foolish in the beginning and I'm certain I will look back a few years from now and think the same thing about the man I have become today. However, I do know this:

The interest earned on your persistence and isn't linear.
Tall trees grow from small seeds.

With Discipline,

Josh

Cleveland, Ohio

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