Real Estate Investing Basics

Best Deal Ever Show #12: Millionaire by Age 30 on Only 3 Houses!

Expertise: Real Estate Investing Basics, Landlording & Rental Properties, Real Estate News & Commentary, Mortgages & Creative Financing, Real Estate Wholesaling, Personal Development, Flipping Houses, Business Management, Real Estate Deal Analysis & Advice
189 Articles Written
young man placing sale sign in front of his house

Much to my chagrin, Frank Cava graduated from the University of Florida (Go, Dawgs!) with a degree in Construction Management. During his job search, Frank learned about a company located in the DC Metro market that he thought would be a strategic company to work for. The role was construction manager, but they were also willing to train and educate him in other areas.

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So, Frank took the opposite migratory pattern of the Snow Bird and headed north—away from sunny Florida.

Building a House

While the training and education that this employer was going to provide was a huge plus, the determining factor was that they offered an employee incentive for those who wanted to build their own house. It actually didn’t amount to much savings (only $3,000), but it was enough to encourage him to build versus rent.

When it came time to take advantage of the employee incentive, he was a couple years out of college and single, so he decided to throw caution to the wind and build a 2,500-square-foot house. It cost around $350,000 and had a mortgage of $5,000 a month.

Here’s where the risk comes in: Frank was only getting paid $4,000 a month! While this was a gamble, it was calculated, as he planned to rent out all the other bedrooms in the house (including the ones in the basement) to help cover the mortgage.

Ultimately, Frank house hacked his way into his first property. And this house would serve to be “the seed that started it all.”

Related: Best Deal Ever Show #11: $2 Million in Equity on 1 Deal in 1 Year!

 

Refinancing and Reinvesting

Shortly after 9/11, mortgage rates plummeted. Frank was able to refi into a much more affordable payment and take out $50,000 cash, which he then used to buy an investment property. A few years later, he sold his original house and the investment property, using the proceeds to buy an 8,000-square-foot house for around $850,000.

Frank eventually sold that house for $1.5 million.

Exiting the Rat Race

Frank’s strategy from the beginning had been to play the long game. This inevitably allowed him to build up enough funds that, at age 34, he was able to quit the rat race and take the step that many would say he had been destined to take since he was five: He started his own company.

Related: Best Deal Ever Show #10: Substitute Teacher Makes $80K on First Land Deal

Today, Frank employs 17 people, pays another 150 subcontractors, and is one of the top five homebuilders in Richmond, Va. He has around 200 rental properties, mainly due to his flip-flopped approach to investing. Where most investors renovate for the cash flow and buy and hold only a few properties, Frank has figured out how to buy and hold more than he renovates.

If you have been a listener of the BiggerPockets Podcast, you have undoubtedly heard Brandon Turner say something along the lines of, “Just do a deal. Your first is the most important…”

This statement was very true in Frank’s case, as it was the success of his first deal that was able to catapult him into his first million—AND starting his own company.

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Questions about Frank’s strategy?

Let’s talk in the comment section.

Ken Corsini is a seasoned real estate investor and business owner based in Woodstock, Georgia. Ken is best known for his role on HGTV’s hit show “Flip or Flop Atlanta,” and has flipped over 800 hou...
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    Chris Perry New to Real Estate from Washington DC Metro Area
    Replied 9 months ago
    Great article, I am from Richmond and now work in DC. I just started my real estate investment business so this is truly inspiring... especially being in my own back yard. Would LOVE to talk strategy with Frank! Thanks for sharing your story.
    Rudy Castillo
    Replied 9 months ago
    University of Florida are Gators =D
    Katherine Healey
    Replied 9 months ago
    I think the author is commenting on his dismay that Frank is a Gator...since the author lives in GA, he probably supports UGA, hence the cheer for the Dawgs.
    Charles H. from Los Angeles, California
    Replied 9 months ago
    What were the net proceeds from the sale of the $1.5 million home? Was some of that re-invested into a new primary residence? You have to live somewhere....
    Lynda Agresti
    Replied 9 months ago
    Inspiring article. Thanks Ken. Very nice to see these kinds of things happen. Congratulations to you for getting where you wanted to go.
    Valentine Chukwuma
    Replied 9 months ago
    Great content
    Gabriel Askins
    Replied 9 months ago
    You can’t be serious. The whole article is filled with flaws. 350k construction loan while making 48k a year? Why wasn’t this your first red flag?
    Pierre M Eade Real Estate Agent from Yardley, PA
    Replied 9 months ago
    Please explain. “ Where most investors renovate for the cash flow and buy and hold only a few properties, Frank has figured out how to buy and hold more than he renovates.”
    Brandon Berkowitz
    Replied 8 months ago
    It appears the author here was exhausted writing this or outsourced. I think he means "where most investors buy and hold for cash flow and only renovate a few, Frank has figured out how to renovate more than he buys and holds." This would make sense, as he claims Frank is a construction manager and lists his number of subcontractors and stuff. That is what makes sense here.
    Anne Kellet
    Replied 9 months ago
    How did he get approved for a 5k monthly loan by only making 4K a month? I’m assuming he must have had a lot of cash in reserves? Or maybe the banks had different rules before the crash? Banks don’t allow room rentals to count as income towards purchasing anymore.
    Nesha Lopez
    Replied 9 months ago
    They could have considered the After Repair value or rental income....
    Mike Dice
    Replied 9 months ago
    Nice ! How did you secure the first construction loan with income if 4K/mo ?
    Gabriel Askins
    Replied 9 months ago
    To follow up on Mike Dice’s comment, I would like to know how he secured a loan of 350k with a yearly salary of 48k? 2 years out of college on a single income. No previous properties. This would be a good article if this was explained. Otherwise I call utter bullshit. I like BiggerPockets a lot but posting an article like this makes me question its credibility.
    Michelle Martin Real Estate Investor from Fairfax, VA
    Replied 9 months ago
    "It cost around $350,000 and had a mortgage of $5,000 a month." I, too, live in the DMV area. Having purchased a SFH residence some years back in 2010 in Northern VA for $375k, I don't understand how you get a mortgage of $5k/mo, unless he had some riducoulsy high interest rate. I used FHA at the time and my payment with PITI, PMI was less than $2200, mind you I had a "low" interest rate. Despite, I'm sure the good intentions of this article to inspire and motivate, it seems a little misleading.
    Sergio Francis Investor from Washington, District of Columbia
    Replied 9 months ago
    $350,000 to build doesn’t say how much the land was. I assume that wasn’t included in the $350,000 only way I see $5,000
    Victor N. Investor from Meriden, Connecticut
    Replied 9 months ago
    No need to repeat all the issues raised by others. This is simply one of the worse articles I have read.
    Kari Paddock Real Estate Agent from Plano, Texas
    Replied 9 months ago
    Agreed, Victor. The math here is making my head spin. More questions raised than content supplied.
    Shiela Roberts Investor from Boulder, Colorado
    Replied 9 months ago
    Along the same lines of others, what was the NET proceeds of these first 3 houses? I can't stand the BP articles that throw around huge numbers without explaining the details with regards to financing and costs. If we are just talking gross proceeds, then I was a multi-millionaire by age 25. Close to unsubscribing as this isn't the first BS article I've seen. Sigh. BP do better!
    John Murray from Portland, Oregon
    Replied 9 months ago
    I enjoy fairy tales of success. Now here is reality, there was cash injected by someone other than Frank. Frank was bankrolled by another party, a very generous party. Frank works hard and is smart and has been privileged by that other party. His degree was financed by a very generous third party or he worked his ass off to pay for it in one way or another. Franks has supportive other parties that drove his success with financial support. You have to have money to make money, I worked hard and I'm self made.
    Michael C. Rental Property Investor from Temple, TX
    Replied 9 months ago
    This article sounds fun, but never seems to get to the actual content. It definitely left me wondering what actually happened. Although, I am glad he was able to build a business and create so many jobs.
    Diego Gonzalez
    Replied 9 months ago
    Glad Frank was able to magically get such a loan with that salary refinance and continue on on his fairy tale dream. Terrible content.
    Soddee R. Knight Investor from Oklahoma City, OK
    Replied 9 months ago
    Lots of questions from reading this article. To give the author the benefit of doubt, maybe Frank wasn't using conventional 30 year financing? Small commercial lenders will do things for me like 10 year commercial loan on a sfh. If Frank got a 10 year loan on a $350k house his monthly payment could be in the range of $5k a month. Also my commercial lenders don't look at w2 income at all. They only look at my large portfolio of income producing assets. Maybe Frank had a lender who didn't only consider his w2 income? I'm only looking at how this story could be reality.
    Ryan Mayes Rental Property Investor from Albion, NY
    Replied 9 months ago
    Must be nice to have rich parents as that is the only way this makes any sense at all. Most of the "rags to riches" stories on here ate just like this. Somehow a 20yr old is giving a 500k mortgage, all alone with no credit history, job or way to repay, and they flip/rent it out. Then get another by refinancing (somehow able to convince a bank that 1 year later they are good for an additional 200k) and buy 10 more...easy peasy right..... hahahahahaha articles like this is why I question the direction BP is going. And they want you to pay to be a premium member to use the calculators and look at all the ads on here now as well....glad this site is still for the little guy though,smh, and Brandon didnt forget about us. But hey for only 350 a year you can feel important also while you look at the ads that ate 50% of each page now. Lol
    Ken Corsini Flipper/Rehabber from Woodstock, GA
    Replied 9 months ago
    Thanks for reading the article and thanks for the engagement! Be sure to watch the interview for more details and info that were not included.
    Brandon Berkowitz
    Replied 8 months ago
    Do you think you would you be able to address any of the comments the other BP members made? There appears to be plenty of holes in the story, so we would like if you can fill them.
    Brandon Berkowitz
    Replied 8 months ago
    It appears the author here was exhausted writing this or outsourced, especially at the point where he talks about buy and hold versus renovation. I think he means "where most investors buy and hold for cash flow and only renovate a few, Frank has figured out how to renovate more than he buys and holds." This would make sense, as he claims Frank is a construction manager and lists his number of subcontractors and stuff. That is what makes sense here.
    Alex Sheppard
    Replied 8 months ago
    This article lacks credibility unless more details are added. 350k loan with a 5k payment? Nice try, No one believes that without an explanation.
    Estime Dieuveille from Union City, New Jersey
    Replied 8 months ago
    The lack of detail in this article is very off-putting. Without repeating the questions from previous replies, I have to say that this write-up casts more heat than light. We can't do anything with this nonsense.