How I Bought 100 Rental Houses in Less Than 10 Years with Zero Money

So I wanted to share my story about how I bought 100 houses with almost Zero Money out of pocket. A lot of people ask me how I did it so I wanted to share my story with you.  I started real estate when I was 25 years old.  I had no money when I started real estate. I was working a job at the police department making $15.00 an hour.  I had to get creative to buy up houses because I had no money left over each month.  Last year I sold quite a few rental properties and I took the equity in those homes to pay off 25 houses.  I now have 25 Free and Clear houses in less than 10 years and I cashflow $35,000 a month from it.  Here is what I did:

Subject to the Existing Financing (Sub 2)

A subject to the existing financing is when you purchase a home from the seller but their mortgage is still tied to the property. This means you don't have to get a loan for the property because there is already one in place. I purchased about 80 of my homes using this method.  I would find an owner that needed to sell their house but did not have enough equity to sell with a realtor.  These are the ideal sellers because they would be going to closing with a check. I often would buy the house full price or over the value.  The price of the house didn't matter to me. It was the payment that mattered most.  As long as the property would pay for itself then I would buy it.  That means if the payment was at least the amount of the rents I would be good. We self managed our homes.  In most cases there was a $100 - $200 cashflow with our rental properties.   So my monthly cashflow with this method was on average $12,000 a month.  I made $144,000 each year in cashflow from my subject 2's.

BRRR - Buy, Rehab, Rent, Refinance

I bought about 20 houses using this method.  You or your credit partner needs to purchase the property in the name the loan will be under. So this will be you personally. You have to first get a fix and flip type loan on the property so you can rehab the property. You can do this by using a hard money lender, fix and flip lender, or a private money lender. A deed of trust must be on the property. The key is the deed of trust must be in the amount that you want to refi the property at. So the deed of trust needs to include the full purchase price + total rehab costs + money costs of this loan. You have to buy the house at least 30% below market minus repairs. While my rehab is going one, I contact my lender who I am going to refinance the property with. They immediately get my loan paperwork started while the rehab is in process. They order the appraisal as well immediately.  My average cashflow for these properties were $500-$700 a month.  My monthly cashflow with these transactions were about $10,000.  I made $120,000 each year in cashflow from my BRRR's.

I wrote a blog post about this method here: https://www.biggerpockets.com/...

Now How did I pay off 25 Houses Free and Clear?

So for 10 years I did not take any of the cashflow from the rental properties and spend it. I kept the money in the bank as reserves for each home and to build up cash.  I would only use the money to cover repairs or upgrades to the property.  Even though the properties I bought were at market value or over market value, in the 10 years the property values doubled and more.  In 10 years I was paying on the mortgage so the loan payoff decreased.  

I sold quite a few properties last year when the market was booming. I sold them during busy season when we had multiple offer situation and buyers were in a bidding war going $20,000 - $30,000 over asking.  I knew when the best time to sell was because we are also realtors.  The cash that we gained from our rental properties we used to payoff our rental houses.  We had to pay the taxes and a lot of it when we sold our homes.  We could have 1031 exchanged the properties into a new one but we chose not to.  We only 1031 exchanged one property.  With all the profits and rents over 10 years accumulated in the bank we were able to pay off 25 houses.  Now our cashflow per month is $35,000 just on the free and clear homes.  That does not include the cashflow of the homes we did not sell.  Our goal is to keep doing this strategy and then own 50 free and clear houses.

I hope this information is inspirational and will help you with your retirement.