Going Backwards to Accelerate Forwards

Real Estate investing is the direction me and my wife wanted to go many years ago. How to get where we wanted to go was unknown at the time. My wife and I moved forward with purchasing real estate but ultimately purchased a single family home that from an investment standpoint made no sense. Long story short we had to go backwards in order to go forwards. Sometimes taking a step back will accelerate you to where you want to go.

A Single Mistake

Our first investment was a single family home. The property was purchased with an FHA loan. Our goal was to purchase and hold the property as a rental. This first property would have been cash flow negative had we moved out and made it a rental. Our next property would have to be another single family unless we were willing to put 20% down. Had we continued on this same path now 8 years later we probably would still be in this same property. I mention FHA because we just didn't know better at the time the benefits of using low money down conventional loans.

Going Backwards

We sold the single family property. We walked away with liquid cash but lost money in the deal from the holding cost. My pregnant wife, my son and I moved back in with my parents. On the first night my son clog the toilet with a giant Lego. It was not ideal for us but we knew staying in our single family would slow us down. We stayed with my parents for a few months while searching for our next property which would end up being a multi family rental.

Getting My Head in the Game

When we made the decision to sell our single family I knew I had to spend every extra minute I had focused on real estate. I made sure to surround myself with people doing what we wanted to do. I viewed properties even if I knew the property was not for us. I saw well over 100 multi family properties in a few months span. I went to other investors deals and learned. I read books, listen to podcasts. I took as much action as I could without physically buying a property.

New House Hack

Moving Forward a bit we found a multifamily. We moved in the same week my second son was born. I didn’t know much but fortunately my relationships were growing with other Bigger Pocket members that were helping me get to our end goal. We moved in with laser focus and went to work. 2 young kids and 2dogs at the time. It took us about 3 years to move out of this property. Lots of work, lots of learning, a ton of mistake, amazing memories

House Hack 2.0

House hack #2 we now have systems. I learned to do a bulk of the work myself in the first property. I had a team of workers in place to help with renovations for the work I didn't want to do. We had 2 more kids, YES 4 kids 2 dogs at this point. We came into this property, went to work and got out in less than 1 year fully rented and cash flowing.  We had major momentum.

We now have the systems and the ability to house hack efficiently. We got to where we are today by taking steps backwards. It is not always easy to go backwards but if you know it can get you to where you want to go in some cases it is worth it. Looking back at our single family we are so grateful for the experience, we know now it was a poor decision but it absolutely was a learning experience I share with friends and clients to make sure they eliminated the learning tax my wife and I had to pay.