Landlording & Rental Properties

My Journey to Financial Freedom: Invaluable Lessons Learned From a 17-Year Love Affair With Real Estate

Expertise: Real Estate Investing Basics, Real Estate News & Commentary, Personal Development, Flipping Houses, Landlording & Rental Properties, Personal Finance
103 Articles Written

There are a whole host of blogs devoted to the concept of early retirement. This term is sort of a misnomer, however, because of all the people I know who have “retired early,” 100% of them are still actively earning income in some way or another. The term I prefer is “financial independence”–having enough money that you don’t HAVE to work a traditional job any longer.

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Many of the bloggers I know started off as computer programmers, making obscene amounts of money, living off a fraction of their income, and saving and investing aggressively. That all sounds great, but not everyone makes $120,000 a year.

So if you make a smaller salary, can you still achieve financial independence?

The Beginning of My Real Estate Love Affair

I bought my first property when I was 26, making $24,000 a year. (Hey, it was a long time ago…) The year before, I had taken over a friend's lease and discovered I hated paying rent. So when the lease was up, I moved back home to save up a few dollars and bought a condo for $49,900. (It was a really long time ago.)

I thought I was some amazing bargaineer, getting a 7% rate on my mortgage. (Are you getting some sense of exactly how long ago this was?) So I moved into my 2-bedroom condo, and my brother shared it with me so he could go to school nearby. I didn't charge him rent because I knew nothing about house-hacking and my parents would have been the ones paying it anyway, and I had just moved out of their house after 26 years of free room and board, so I figured it was a wash.

I owned that condo for four years, selling it when I got married because my husband had his own house. I sold it for $74,800, and I was on top of the world. I paid off all my debts, and life was good. And I was hooked on real estate investing.

I did almost nothing to that condo. I painted all the walls and installed new ceramic tile in the kitchen. New paint and a new floor really did a lot for the place. It really is true that fresh paint makes a room pop. And I made the same money through that sale that I made working at my job for the entire year.

The Love Continues

Once I got married, I moved into my husband’s house. It had actually been his grandparents’ house, and he sort of inherited it. They passed away, and he moved into it to take care of it. We purchased it from the estate.

Turns out, Grandma loved pink. L-O-V-E-D pink. The whole house looked like it had been hosed down in Pepto-Bismol. Pink walls, pink carpet, pink couch. You know what covers up pink walls? White paint. Pink carpet is easily removed and replaced with beige. People will drive by your house and take that pink couch with the free sign on it.

Related: I Dropped Everything to Invest in Real Estate With My Significant Other: Here’s My Story

So we spruced it up and kept it after moving to the big city, renting it out two separate times before deciding to get rid of it altogether. (Should have kept it. It sat on a HUGE lot very near the big city, which is unheard of in that area of the world. Sigh.)

First-Time Landlords

Renting was an interesting experience. We advertised in the newspapers a few times and got lots of responses. (Again, really long time ago, before Craigslist…)

“I would like to run a daycare out of this house.” Um, no. Seriously?!?

“I have three large dogs, can you put up a fence?” I think you missed the part about no pets.

“I can’t afford the last month’s rent or deposit right now.” As she drove up in an $80,000 SUV with her bodybuilder boyfriend in tow.

“My husband ruined my credit.” I would love to believe you, but I just don’t.

I'm really surprised we did so well during our landlord experience. This was a really long time ago. BiggerPockets didn't exist; heck, the internet barely existed. AOL was still sending out CDs in the mail and was running advertisements on the radio. We could read a book about landlording, but it was a whole different ballgame back then.

We did have the presence of mind to perform a background check. That weeded out a lot of the candidates who didn't say stupid things on the phone when calling about the property.

We finally found two guys who had a summer internship at a large corporation a couple of miles away. They wanted to rent it for three months and paid up front for all three months. They were really nice guys, took good care of the house, and left when they said they would, with the house in the same condition as when they moved in. Score!

We found another guy to come in after the first two moved on. He was a creepy weirdo who paid his rent on time. After a year, we told him we were not renewing his lease because we were going to sell the house, and when he moved out, he left a lot of disgusting things in the house. Eww. But you can buy rubber gloves at the store, so once I picked all that stuff up and bleached the house, all was fine. And someone else paid my rent and then some for 15 months. Score!

We sold that house for $130,000 MORE than we paid for it, which was about five years’ worth of my salary. Hmmm, this real estate thing looks like a really awesome idea.

The First Major Flip

We rolled all this over into the next house, where we learned how to do almost everything we know now. This house was the first place we used natural stone tile and discovered that it goes in just as easily as ceramic. We hung cabinets for the first time too and learned that isn't such a tough task either. We didn't walk away with millions from the sale of this house–I think somewhere in the $50,000 profit range –but we did leave with the foundation of our flipping education, which is absolutely priceless.

The First (and Hopefully Last) Flop

Our next house was a major mistake. We bought at almost the height of the market and sold at close to the low. Our profit compared to how much work we put into it amounted to pennies per hour.

I can’t spend too much time talking about this project because it is still too fresh, even though we sold it more than three years ago. We learned so much from it, but at such a heartbreaking cost. There were lots of dark days during this flip. We still haven’t sat down with the actual numbers to figure out what we made. We know we are in the black, but we also know it wasn’t anything close to our projection.

Who could have predicted the market crash of 2008?

We learned more in this house, so it wasn’t all for nothing. But we had just about every kind of problem you could imagine. Bad contractors? Check. Extended time line? Check. Bad weather? Check. Difficult time selling? Check.

Related: The Meth House, The Cops, and Me: A True Real Estate Investing Story

Lessons Learned

Now I know what to look for when I talk to a contractor. I'm not perfect, and I still have hired bad ones. But I know that I can fire them and life will be ok. I know to insist on tarps while the roof is off and they leave for the weekend. I know it will take twice as long as they say it will. I know it will cost more, but I also know more about what costs go into the initial plan so I can make a more accurate guess.

The School of Hard Knocks is a horrible place to learn, but those lessons stick with you for life.

Real estate has helped me become financially independent. I took a lot of time off to raise my children, and now I work because I choose to work.

And I have never loved a job more.

What has your real estate journey looked like so far? What are the most important lessons the School of Hard Knocks has taught you?

Let’s talk in the comments section below.


Mindy Jensen has been buying and selling homes for more than 20 years. She buys houses, moves in, makes them beautiful, sells them, and starts the process all over again. She is a licensed real est...
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    Jerry W. Investor from Thermopolis, Wyoming
    Replied almost 5 years ago
    Hey Mindy, nice article. In the beginning we count on luck too much, but my story is similar. My biggest regret is not doing more and sooner.
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied almost 5 years ago
    Thanks, Jerry. Yes, I remember all that money I wasted on frivolous things rather than investing. I could have an empire now if I just tweaked my spending… Remember those low low prices in the 90’s? Maybe someday we will be remembering those low low prices in 2015?
    Larry Russell
    Replied almost 5 years ago
    Great blog post with vivid detail. I’m looking forward to reading more post of your experiences. I also believe you have to get out there and purchase your first flip to get your flipping education, “which is absolutely priceless.” Do your research, then pull the trigger.
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied almost 5 years ago
    I was really lucky with pulling the trigger. I probably should have done more research. A SFR would have given me much better return on my investment. Those condo association fees are killer…
    David Roberts from Brownstown, Michigan
    Replied almost 5 years ago
    Thanks for your candor in the article. I enjoy reading the bad with the good.
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied almost 5 years ago
    Thanks for reading, David!
    Jim Braun
    Replied almost 5 years ago
    I like your post. I am still working on replacing job with real estate. There are problems in the real estate business but you are in control of correcting them. instead of being controlled by some employer.
    Mindy Jensen BiggerPockets Community Manager from Longmont, CO
    Replied almost 5 years ago
    Absolutely, Jim. Good luck!
    Robert Steele Investor from Lucas, Texas
    Replied almost 5 years ago
    “Many of the bloggers I know started off as computer programmers, making obscene amounts of money, living off a fraction of their income, and saving and investing aggressively. That all sounds great, but not everyone makes $120,000 a year.” Hey that’s me and how I did it! 🙂
    Randy E
    Replied almost 5 years ago
    Excellent article, Mindy! You certainly hit all the highpoints of real estate investing. I’ve been investing in commercial and multifamily properties for the past 20 years. Replacing active income with passive income is one of the most rewarding benefits of real estate investing. It has been a get-rich-slow process to reach this point, but it beats going to a 9-5 job every day!
    Blake Stevens Investor from Fort Collins, Colorado
    Replied almost 5 years ago
    Mindy, I like your story and this article. I know several people that earned a secure retirement this way, doing real estate on the side. The part I don’t get is how you achieved financial independence? I see you flipped several properties and made some great returns, but your article didn’t mention holding a portfolio of rentals or systematizing flipping so that you were financially independent. Did you just live on a fraction of the income you earned from real estate like the tech blogger style you mentioned, but instead of a tech job you earned extra income from real estate? If so do you earn passive income off traditional paper investments from the cash you generated flipping? I love hearing real world success stories and using there success as motivation for me.
    Jeff S. Specialist from Portland, OR
    Replied almost 5 years ago
    The first time I realized I could be FI was when I was 45. A friend had figured that if she sold all her properties on long-term contracts she could replace her income. After owning my properties for 7 years in an highly appreciating market I noticed the same thing. Selling everything on long-term contracts almost exactly replaced my income. There it was. It was a surprise. Not liking the idea of ever drawing down assets I chose to do a J.O.B for 20 years, save cash and get a pension with benefits. I guess you could say I have it double covered.
    Tonya L
    Replied almost 5 years ago
    Thank you for your insight. Do you have any advice for someone looking to do their first flip that needs an investor? I’m in an area with tons of REOs still and would love to make the jump sooner than later.
    Cornelius Charles Investor from Oxnard, California
    Replied almost 5 years ago
    Hey Tonya. I don’t mean to answer for Mindy, but my wife and I are almost done with our first flip. We used bank financing for the purchase price and a private investor (who’s been investing for decades) for the rehab costs. He actually approached us about providing the rehab costs when he heard about the deal because he liked the property we had under contract and thought our numbers were good. Even though we have no experience, he said that he could tell that we at least knew what we were talking about from all of the material we had read. He was therefore comfortable enough in the numbers and believed that partly made up for our lack of experience. So I would suggest if you find a good enough deal, you should be able to network with local investors to find funding. Worst case scenario, you should be able to wholesale the property. I haven’t dealt with REO properties, so there might be some differences in the purchase process than there are when buying directly from a homeowner.
    David White from Edgewood, Maryland
    Replied almost 5 years ago
    Interesting read. Thanks for sharing.