BiggerPockets Real Estate Podcast

BiggerPockets Podcast 238: Becoming a Real Estate Millionaire on a Teacher’s Salary with Michael “Swanny” Swan

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Is it possible to invest in real estate if you live in an expensive market—and earn a teacher’s salary? According to today’s guest, it’s not only possible, but it can be incredibly profitable! Today’s guest, Michael Swan, is a P.E. teacher who lives in San Diego but has used the valuable real estate concept known as “trading up” to acquire millions of dollars in real estate. You’ll learn why Michael liquidated his entire retirement plan to buy his first few deals, the truth about “luck” and real estate, and some fantastic tips for buying and managing properties—even from a distance. (And if you work a full-time job or make less than $100,000 per year, this show might just change your life!)

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In This Episode We Cover:

  • Why Michael’s nickname is Swanny
  • How he realized his financial ladder was leaning on the wrong building
  • Tips for utilizing IRAs and penalties
  • Whether purchasing 11 condos is a good idea or not
  • The story of the 15-unit apartment complex
  • How he went from $5k in cash flow to $24k
  • Whether luck had to do with his great deals
  • Tips for buying areas in with both cash flow and appreciation
  • His formula for financial freedom (using multifamilies)
  • A discussion on single families versus multifamilies
  • How to find deals in your market
  • Tips for seeking out the perfect property manager
  • How many units he has now
  • How to tackle big projects
  • How he manages his work with his time as a teacher
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Fire Round Questions

Tweetable Topics:

  • “Living in San Diego, if I am able to do it, anybody can do it.” (Tweet This!)
  • “Luck is when preparation meets opportunity.” (Tweet This!)
  • “Make sure you make connections with everybody.” (Tweet This!)
  • “I don’t take advice from someone that has less than me.” (Tweet This!)

Connect with Michael

Real strategies that work for real people seeking to build wealth through real estate investments. Co-hosted by Brandon Turner and David Greene, this podcast provides actionable advice from investors and other real estate professionals, who chat about failures, successes, motivations, and lessons learned.

    Zach Lemaster Rental Property Investor from Denver, CO
    Replied about 2 years ago
    “Swanny” Wow, one of the best shows I’ve listened to in a while! I absolutely love the straightforward way you outlined why it doesn’t make sense to take advice from your financial advisors, and “HOPE” for some sort of mediocre financial freedom in the future investing in the stock market! Also, the simple equation of “emerging market + 1031 + multiunit investing = great financial freedom” is exactly how I try to explain to friends & family the enormous potential RE investing has vs any other path!
    Zach Lemaster Rental Property Investor from Denver, CO
    Replied about 2 years ago
    Forgot to end with a big Thank You for your time & expertise!
    Kyle Karges Investor from Gilbert, Arizona
    Replied about 2 years ago
    Wow, this is exactly what I needed. I have equity and refinancing just doesn’t seem to fit, so I was thinking of 1031 into apartment.
    Kevin Sapp Lender from Cary, North Carolina
    Replied about 2 years ago
    Love this quote.. “I don’t take advice from someone that has less than me.”
    Kim Stofan Realtor from Sacramento, CA
    Replied about 2 years ago
    It doesn’t surprise me that you admire Grant Cardone. When I was listening I felt like you have a very similar energy as him. Thanks for a great show. I love Scott Trench as a host!
    Gregg Hutton Investor from Centreville, VA
    Replied about 2 years ago
    A motivating show as I drove into work this morning!
    Pradeep Nagaraja from Sammamish, Washington
    Replied about 2 years ago
    Awesome! Very inspiring show.
    James Wise Real Estate Broker from Cleveland, OH
    Replied about 2 years ago
    “They want to charge me $123 for a thermal coupler….That’s not a problem”…………Swanny ???
    James Wise Real Estate Broker from Cleveland, OH
    Replied about 2 years ago
    FYI Those questions marks were supposed to be laughing face emoji’s code didn’t translate (sad face)
    Germell Johnson from Woodbridge, Virginia
    Replied about 2 years ago
    Really good show. You could see the teacher coming out of you as you spoke Swanny. I can tell you’re really passionate about both investing and teaching. Felt like I was in high school all over again lol
    Pyrrha Rivers Investor from Stone Mountain, Georgia
    Replied about 2 years ago
    Extremely motivational coming from an educator’s perspective! I’m a teacher and real estate investor who came away with renewed energy and a multitude of ideas after listening to your podcast. Thank you!
    Pyrrha Rivers Investor from Stone Mountain, Georgia
    Replied about 2 years ago
    Your ripping off the band-aid approach to IRAs was also confirmation of what I have been thinking.
    Ashok Narayana from Houston, Texas
    Replied about 2 years ago
    Great Podcast – thanks guys! @Scott Trench – Is that new Quadplex investment also a “House Hack” using FHA loan funding? Or is this a traditional investment property? Thanks! Ashok
    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied about 2 years ago
    Great podcast Michael!
    Michael Swan Rental Property Investor from San Diego, CA
    Replied about 2 years ago
    Thank you everyone!! Don’t be afraid to go to my profile and reach out to me. I am only a phone call away. Swanny Changing Paradigms One Person At A Time!!! If you change the way you look at things, things change right before your eyes!!!
    Brad
    Replied about 2 years ago
    Hi Swanny, I’m curious about your thoughts on using a self-directed IRA to invest in real estate. Why did you choose to liquidate your IRAs rather than just converting to self-directed? Thanks for a great podcast episode!
    James Warren from Danbury, Connecticut
    Replied about 2 years ago
    I was wondering the same thing…I’ve been really thinking hard about using a SDIRA to invest.
    Jon Wahlmann Rental Property Investor from San Diego, CA
    Replied about 2 years ago
    I’m also considering the same thing. Given my current tax bracket, it would be way too costly for me to liquidate my IRAs. My understanding is with self-directed you need to keep everything flowing through the IRA and you can’t take any income out of it until you are of the appropriate age just like a normal IRA. However, I’ve heard rumors of some self-directed IRAs being setup in a way that still allow a more immediate use of rental income. I’m trying to find something more concrete though to point the way.
    Harris L. Investor from San Ramon, California
    Replied almost 2 years ago
    I enjoyed this interview very much so I reached out to Swanny. Just had a call with him few minutes ago… I’m in a very similar boat.. in terms of buying condos during the down times here in Northern California(30 minutes out of SF) and I want to move into cashflow multifamilies but I have no idea about multi family investing and business and where to start.. he has a set of advice for me to study… the two books he recommended in the interview.. that’s what I’ll be soaking up in next 2/3 weeks…
    Brad Kaellner from Berkeley, CA
    Replied almost 2 years ago
    Hi Harris, Let me know what you discover! I’m working my way through “Multi-Family Millions” as well and I’m eager to explore MF properties outside of CA for cashflow. Neal Bawa is a great local resource for MF as well… he’s developing a big student housing complex in Buffalo, NY at the moment.
    Mohit Asthana Property Manager from Fremont, CA
    Replied over 1 year ago
    A bit late to the party, but Neal Bawa is a great guy. I went to one of his meetups and he definitely knows his stuff!
    Bob Koby from Avondale, Arizona
    Replied over 1 year ago
    This was a fantastic episode. Another great story of a normal person starting from the ground up. Great examples and real scenarios and experiences the whole way through. Really motivating if you are good at making excuses, as Michael had most of the major excuses people have when getting started – no money, no time, not knowing where to start.
    Charlene McNamara Rental Property Investor from Nevada City, CA
    Replied over 1 year ago
    Just catching this episode now as a newbie to BP. I understood everything, but must have missed something….you indicated that your properties were cash flowing “tax deferred.” How was the cash flow tax deferred? I thought you liquidated your IRAs to buy conventionally. Did I miss something? I want my cash flow to be tax deferred!! Thanks…..lots of really great info in this podcast
    Charlene McNamara Rental Property Investor from Nevada City, CA
    Replied over 1 year ago
    ahhhh, maybe in a 1031 the cash flow is tax deferred. I thought it was just upon sale of a property that any gains were tax deferred.
    Charlene McNamara Rental Property Investor from Nevada City, CA
    Replied over 1 year ago
    ahhhh, maybe in a 1031 the cash flow is tax deferred. I thought it was just upon sale of a property that any gains were tax deferred.
    Michael Swan Rental Property Investor from San Diego, CA
    Replied about 1 year ago
    Hi Charlene, I believe we have talked on the phone and you have already started buying single family rental properties. Sorry I didn’t see this earlier. We were deferring all those taxes due to depreciation, HOA fees, interest on the loan, replacements of appliances etc… on paper we were making a loss for tax purposes and at the same time earning tax deferred cash flow. Since this podcast aired a year ago, I have opened my phone up to BP members to advise etc… don’t be afraid to reach out to me BP Nation. I love this stuff!! Swanny
    Michael Swan Rental Property Investor from San Diego, CA
    Replied about 1 year ago
    Reach out to me anytime!!! Swanny