I’m a 31-year-old real estate professional who achieved the goal of financial independence.
Financial independence is achieved when one’s passive income exceeds their living expenses. In essence, early retirement is reached.
Unlike the stereotypes, retirement does not mean sitting around and watching reruns of MASH or Matlock all day. It also may not mean enjoying beaches or golfing all week long either. Early retirement simply means you are in a financial position to leave the workforce, if you so choose, and pursue any dream or passion that you may have. What you do with your free time is completely up to you.
I sometimes will work for two weeks straight – waking up early and staying up late to get something done. Sometimes I take a month or two vacation for no reason other than to have a new experience. I’m free to travel or live anywhere I may want to go whenever I may want to go. That’s the great part about independence, I am free to do what I want.
It was an accident that I even got into real estate.
While studying for my Ph.D. in Economics at Clark University in Worcester, MA, I wanted to buy a home. I almost made the classic blunder of buying a huge liability, but fortunately, I ended up buying a small multifamily property.
Buying the property was a major milestone in my path toward financial independence, but that alone is not what did it for me. In fact, I planned to sell it and buy a “normal” home and be a “normal” person.
Instead, there is one event that has been seared into my brain as the single event that entirely changed my life.
I was sitting and watching a movie a few months after buying the property. It was around 8 pm and I heard a knock at my door. Who could possibly be bothering me so late? I opened the door and it was a tenant there to pay rent.
I wrote the receipt, took the cash, and sat down to finish watching the movie. I don’t remember what I was watching but I remember very specifically that something in my mind happened. The wheels in my mind started grinding and it led to a lightbulb going on. Honestly, my entire life changed.
I realized that I didn’t want to go hustle for money. I didn’t want to chase money, I wanted it to come find me. That night I realized that I could make money literally knock on my door. I decided at that moment that investing is what I would do for the rest of my life.
We already had one property, but you still need some cash to buy the second one. Fortunately, I had the military to thank for helping me out.
In 2010-11 I deployed to Afghanistan. Though it helped us to get started, it also came with a lot of sacrifices.
The hardest part was being away – away from my wife, family, home, everything. Fortunately, my wife had nerves of steel and she hung on through thick and thin.
The great part was the money. I spent an entire year working tax-free. We had rental income so my wife lived with all expenses paid, and I also had almost no expenses while overseas.
I also spent the entire year learning. I read dozens of books about business, real estate investing, and literally everything else I could read. I remember finding this part agonizing – I wanted so badly to get started but I was forced to sit and wait.
Looking back, I realized that this year was essential because it forced me to study, learn, and take my time instead of diving in and potentially losing money.
The hardest part of a deployment is the transition back to civilian life. You just spent a year being a king – you make the rules and people live and die by them. Life and death are determined in an instant and you are the one making that determination.
Then you get back in the U.S. and you have to wait in line or follow all the rules like everybody else. You’re expected to sit in a classroom and debate the nuances of Coase Theorem when just 6 months prior you were on patrol in the mountains.
While staying in the program probably made the most sense on paper, it wasn’t a decision I could commit to at that exact point in my life. After a year of planning and preparing for my real estate business, I wasn’t about to delay it further to go sit in a classroom.
Some part of it was coping and adjustment – I was still seeking the adrenaline and clarity you have while deployed. Some people come home from a deployment and fall into destructive behaviors like drugs, alcohol, gambling, or extreme risk taking. Fortunately, the outlet I chose was finding value in rundown properties and bringing them back to life.
I took some huge risks financial risks at the beginning and wasn’t always smart along the way.
I became licensed as a real estate salesperson in 2011 and bought my first flip in early 2012. That flip was probably the biggest financial risk I’ve ever taken.
I used every dollar I had (over $100k), maxed every credit card, and raised money from my friends to fund it.
Then, like the risk taker I was, I scheduled the sale of the flip and the next purchase too close together – only 2 or 3 days apart.
At one point just a few weeks before we sold the flip, we only had a couple hundred dollars in the bank account. My wife was crying every day because we couldn’t even afford groceries, and of course, I was nervous about it too. But the numbers worked and I trusted in my plan.
The house sold on schedule, the money cleared the bank. Then I closed on my second multifamily deal the same week (which is what truly set me up for success).
Today, I wouldn’t take such a risk scheduling closings like that, and I would have done things a lot differently. Either way, I was in business now!
I started to grow my business in 2012-2015. I did some flips but mostly I accumulated small multifamily properties. I became licensed as a construction supervisor (the highest license for a contractor in my state). I put together a crew and was running projects for myself as well as others.
As my business grew, I began to understand that a real estate business and real estate investing are different things. Though I was investing, I was also running a business.
I realized that finding deals, investors, funding, and overseeing projects is a business while putting money into the deal and getting the passive income is actually investing. Once I understood this I was able to make some adjustments and create a “foundation” of investments that would generate passive income without any constant involvement from me.
This is when I started to become “financially independent.”
After we moved to DFW, I was able to completely systematize my real estate business so I was able to switch from a “business owner” to an “investor.” Being 1,700 miles away forced me to make those hard decisions and sudden changes.
I did pick up a sales job for about 9 months because of the uncertainty. We weren’t confident that we could manage everything from a distance and make enough money to support ourselves. Well, everything did work out, we still made a ton of money on our rentals, and the extra income just set us up to buy several more properties.
I officially “retired” from the workforce in January 2016. The following month I launched this site and then I started looking at how I could grow my online business as well as grow as an investor. So, I started networking.
I met an investor at a Meetup near Dallas in the first half of 2016. He profoundly changed my life though he has no idea that he did (unless he happens to read this or one of you tell him).
He didn’t say or do anything in particular. In fact, he didn’t say more than a few words at the networking event. What he did was take an hour of his time to have coffee with me and explain what he does and how he does it.
It wasn’t until I reached DFW that I learned about syndicating – pooling other people’s money together to purchase much larger properties. I knew the term and had learned a bit about it before, but it seemed like something rare and difficult.
After chatting with Him, I realized that it’s not hard, not rare, and not something only super rich people can do. He didn’t realize he was doing it, but in a sense, he opened a door for me and showed me that an experienced real estate investor such as myself could easily do what he does.
In fact, my conversations with him and others made me realize that I had already been doing it! It was just a lot less formal and only involved a closely held group of investors (close friends and family). The key steps I needed to take was to formalize it and do larger deals to justify the expenses involved with doing that.
It took a little while to get rolling after that conversation, but now he and I are working on some deals together.
This is going to be an amazing year for the online platform as well as my real estate investments and business.
But, the thing to remember is that financial independence allows us to do what we enjoy doing. As much as I plan to grow my business, I also plan to take several vacations and enjoy life while we are young.
Professional goals for 2017:
Personal goals for 2017:
I hope my story will inspire more people to get into real estate and earn solid returns so they can also retire young and spend their lives doing what they truly enjoy.
Please enjoy reading and don’t forget to send me feedback.