I believe this will be the last of my posts divulging our past and foundation of the present, and this should be slightly more tangible in what exactly we are doing to work towards increasing our wealth and financial independence.
I mentioned in a previous post that my first property purchase was a single-family home back in 2012. It was a 2-bed, 1.5 bath home that I got a very good price on buy purchasing as a short sale. Over the next couple months, I built a bedroom, bathroom, and kitchenette area in the basement. While I lived there, I was able to rent out the other two bedrooms. The rent covered my 15-year mortgage payments and I was hooked!
However, I was so busy with working two jobs and 70-75 hours a week that I did not pursue real estate in any form or fashion for another 3 years.
What I did do during this time though was to open a Roth IRA, as well as a 401K through the company I was working for. They matched 6%, so I hit their match and then maxed out my IRA every year. As I also mentioned in a previous post, I had previously opened a brokerage account and have had the same financial advisor since I was 18 (more on this later… after much research, we are considering leaving him and putting our investments in index funds with Vanguard.. Has anyone made this switch??)
Now though I am very glad we have made these financial moves (we have since opened a Roth IRA for my wife as well, which we max out every year, as well as contributing to her 403B through her work in a university), the vast majority of our financial moves in the recent past have come in the form of real estate.
In 2015, I had been reading and learning as much as I could about real estate over the past 10-12 months and decided to take the plunge again. I purchased a single-family home that already had a tenant in it. The landlord wanted out and was selling all of his properties (you will soon hear why!), so I got it for dirt cheap. Since my life consisted almost entirely of working during this time and I was living for free, essentially, I was able to purchase this property with cash.
What started out as such an exciting proposition soon became more of a nightmare than a headache…
The acquired tenant was just shy of being a hoarder; she did not take care of the place, and it was difficult to even see the floor in most of the rooms – not an issue as long as she kept paying rent and did not move… But, it was not to be. A mere 3 months later, she moved out, but left a vast majority of her items, as did her dogs and their odor and fur!
My wife and I were dating at the time and we both got the experience the “joys” of a problem tenant. Fortunately, my parents had since retired and decided to come join us for a week or two of intense “home-makeover, Columbus edition.”
Carpets were ripped out, walls repainted, floors resurfaced, windows changed, and dumpster after dumpster filled.
When we finally finished, the home was unrecognizable! My parents deserve a whole lot of credit here; they put in far more time than any paid contractor would have on this project and I am so grateful!
We now have an amazing family of 5 in there that take better care of it than we probably do our own house. (Side note here: if you are going to self-manage, spend the time finding quality tenants – this makes a world of difference).
So, after that fun experience we decided to dive into the deep end again and purchased another single family the next year. During this time, the value of my residence had increased significantly and I was able to get a HELOC on the equity in the property. We used that HELOC as the down payment on this next property and financed the rest through a local bank at a great rate of 4.25% over 30 years.
This tenant has been incredible as well. She has lived there for 13+ years and truly treats the place as her own.
To give a brief breakdown of where we are now, we have 3 rental properties in our own city that I manage myself, and have since moved into another market where we have been able to acquire another 28 units (24 of which have been purchased in the last 5 months! It has been a crazy year). I will dive more into how this has been able to happen in the near future, but for now know that we are “all-in” on real estate and the power that it holds in the investing world.
In case you were wondering, my “job” life looks considerably different now than it did 4 years ago. It keeps molding and changing and growing, and my wife and I are doing our best to read, pray, listen, and follow wherever we are led. The recent past has been a blessing, but we both know that life is not about comfort or wealth, and continue to seek to be good stewards of our blessings.
Thank you all who have taken the time to read this or any of my blog! I never mentioned this, but I have never been one for writing up until recently and this blog is my first attempt at putting my thoughts into print. Hoping at least one of you are able to take a bit of knowledge or joy in following along!