Real Estate Investing as a newbie for passive income

You ever dread going back to work after a vacation week when you stayed at home doing nothing because you can't really spend money to travel? Or after even a day off? How about every single day you come home? Yea that’s me this week and every week. Don’t get me wrong, I love my job... in retail... during a pandemic... (whoa the sarcasm here). But there’s got to be more to life then this trading time for money gig... right? Enter my new trajectory fueled by real estate investing.

Real Estate Big Picture Plans

I’m a big fan of mindset books, habit-building techniques, and goal setting to get you working toward what you really want to do. Like real estate investing for the rest of my life. Just kidding; I don’t really want real estate investing to be my end-goal. What I really want is to have a system to run a business while I go travel with my daughter. In order to do what I really want, I am starting with the end in mind and working backward to where I am now and creating actionable steps along the way. Before I get to “retirement” I need to build a team and automate processes. Right now I am still in the team-building phase of my real estate investing journey and learning about what creative investing needs to be done and how.

(First house turned into BRRRR rental)

Starting in Real Estate Investing while Working Full-time

Way back when I was going to brick-and-mortar college and working my part-time job in retail, I did a lot of browsing on the Web for ways to grow money. I stumble on a few flimsy ideas about getting a paper route, cutting grass (in Arizona, yea right), and babysitting. What am I 12? There were also surveys you could take, secret shopping, and making money with your website from ads. I was going to school at the formerly named University of Arizona (I think they call it UA or something now). I was studing computer science and decided to make my own webpage using a free-hosting with ads webpage. (Put the webpage here if I can remember what it was called). I must have forgot that the ads posted on the webpage should be something to make me money using affiliate links and not the web host.

Anyway, I abandoned the notion of making money from the webpage and continued my search eventually. Upon my searching for money-making schemes, I discovered the idea of using a house to make money by having renters pay the mortgage. I loved this idea and only needed a few THOUSAND dollars to make it happen. Sure, right. I’m just supposed to whip out a fat thousand dollars for a down payment while I’m on a college budget and learning to live on my own.

Fast-forward to several years and several moves around Tucson as a renter. The year is 2011 and I had recently broken off a 4-year relationship to my then fiancé. What better way to celebrate then to buy a house! After Christmas and looking at houses that were on the MLS on my phone while in Yuma, I inquired about a house that needed some work that was selling below market value. I thought to myself, self, you can live in a house and fix it up over time.

When I got back to town, I reached out to a realtor and looked at the foreclosed house that had missing kitchen appliances, stained carpets, holes in the walls. It was overwhelming and I didn’t love it or the cracked, skinny streets. I continued on the MLS looking for the biggest bang for my buck in square footage. I found a short-sale house near the store where I was working and that the bank owned. I bought it after a couple of days that it was listed. It did need a fridge and my parents were gracious to gift me the kitchen appliances. I had the down payment from my tax refund in January and closed on the house a couple weeks into February 2012.

(My war room: habit tracker, planner, and vision board)

Let’s fast-forward again. Another relationship that ended in a really bad breakup while I had a 3-year old daughter, it got me thinking about moving to a new house. After a series of events lead to my parents needing to down-size, my parents decided to move to Tucson. After about a year, I got to thinking about my daughter starting school soon. I got pre-qualified for a conventional home loan and started looking on the MLS to see what was out there. It was around this time that I started thinking about my parents taking over my house and getting into a new house. This is also around the time that I found a wealth of information about real estate investing called Bigger Pockets. I read advice on books to read including Rich Dad, Poor Dad that lit a fire in me to pursue the rental strategy as passive income. I also attended a conference hosted by Fortune Builders that talked about building financial independence. In December of 2016, I found a house that was for sale by auction in the school district I wanted my daughter to go to! It was also under market value! I went to go see the house and the next day placed a bid online and won! I happened to have had a windfall earlier in the year that helped with the down payment for a conventional mortgage.

Becoming a Self-Managing Landlord

I'm sure there are mixed opinions about family as renters, but hey I'm taking actions toward my big picture goals now! Another family member moved her family to Tucson in a down-sizing move with her growing family in December of 2019. The only place she could quickly get into within her budget was a single-family home that had been divided into a single bedroom duplex. I made it my mission that by the end of the year I would pull out the equity in the first house to buy another house so she could rent from me instead; this is the infamous BRRRR strategy. Buy, rehab, rent, refinance, repeat. Since I had already lived in the house and rehabbed it over time, and now having renters I just needed to refinance it and continue using this strategy to buy more.

Watching a lot of webinars and soon listening to podcasts from the Bigger Pockets website and community, I listened to strategies of investing in real estate along with mindset and habit-building advice. I began reading and listening to audio books on my commute to and from work each day. During the midst of the COVID-19 pandemic, hearing about the financing being at an all time low I knew I needed to commit to buying a house. In June 2020, I printed a 90-day quick start guide that was a bonus on one of the webinars and signed it to commit to myself I would get serious about real estate investing. I bought the pro membership so that I had some money invested, using this itself as a motivator to stay on track with my goals. In December of 2020 I completed my first BRRRR! It didn't come easy and I had to write offers on about 6 houses before I finally landed one.

Real Estate Market During COVID-19

Not wanting to lose momentum, I recommitted to my goal this year of treating my real estate investing more like a business, actively seeking partners to work with, and deciding on what criteria and strategy was going to get me closer to my goal. I created a visionboard of retiring from retail and working from a converted van while I travel with my daughter and my business being automated using systems to function without me. I found a partner who is willing to do fix and flips and split profits. I recently filled my calendar with webinars, REI meetings, conferences, and meetups to immerse myself in real estate.

Now, my mission is to find private money investors and hard money investors to fund deals and to have wholesalers and my realtor send me deals. If you have been following real estate or the news, we are in a time where there are not enough houses for sale and there are cash buyers competing with everyone else wanting to buy a house. This, combined with the lowest rates for financing since the 80's is creating an overly competitive market for buyers and extremely difficult to find a profitable deal. I analyze as many properties as I can that come in daily to see if there is any profit left after using a hard money lender for 90% of the purchase and rehab. I have a goal of analyzing at least 5 leads a day and working on a refi/heloc for my 10%. My focus now is all about leads and creating a social media brand to propel my business plan. Enter this blog: post #1.

Thanks for reading my life story and hopefully I will continue with this blog as events develop and as I learn more on this journey. Please visit my Instagram @misshollyboss, facebook page encourageproperties or Bigger Pockets profile HollyB28 to follow me for helpful tips that I learn, the steps I'm focusing on, and other motivational tips to help others toward their goals of financial independence.