Landlording & Rental Properties

How Two 30-Something Twins Achieved FIRE in 5 Years on Rental Income

Expertise: Landlording & Rental Properties, Real Estate News & Commentary, Personal Finance, Real Estate Investing Basics
134 Articles Written

Spoiler alert: Drew and Scott Hoefler still work today.

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Except now it’s by choice.

Now in their early 30s, the twins live and invest in the Twin Cities, and a decade ago never even considered a career in real estate. After five years of investing in real estate, they successfully reached financial independence.

Here’s their story, complete with the mistakes they made along the way.

House Hunting, House Hacking

In 2013, the twins were single 20-somethings working for agricultural giant Land-O-Lakes, looking to buy their first home. They planned to buy a home with a few bedrooms together, move in, and bring on a roommate or two if the house were big enough.

Then, over dinner with their parents one night, their mom offered a better idea: “Why don’t you buy a two-flat?” (That’s Midwest for “duplex,” FYI.)

Teenagers may sneer at every idea their parents have, but in your 20s, you start paying attention once more to your parents' advice. "We quickly realized that we could live in one side, rent out the other side and cover our mortgage… we were all-in."

The hunt for the perfect duplex was on!

Buying Your First House? A Duplex Might Make Sense

The (First) Duplex

After touring some duds, the twins came across a gem in the Arts District in northeast Minneapolis. They described it as an “up and coming” neighborhood, which was not a euphemism—the neighborhood was gentrifying with a fun and funky craft beer scene.

Then came the first stumbling block. "At first look, Drew and I had trouble seeing the lower unit because of issues with the renters. We put our offer in based upon seeing the upstairs unit only."

You know where this is going.

The downstairs unit needed work, which they discovered after putting the duplex under contract. Luckily, the work was cosmetic, nothing structural or mechanical. Upon buying the property, they non-renewed the tenants, made updates such as removing the drop ceiling, and moved in.

"The purchase price was $208,000. Our financing was an "American Dream" program that was an owner-occupied conventional loan financed by U.S. Bank. Great program. We rented the upstairs unit out for $1,300 from day one."

That proved enough to cover their mortgage payment. A successful house hack.

Nowadays, with further gentrification in the neighborhood, they charge $1,700 for that upstairs unit.

Related: Are Your Children Stopping You From Achieving Financial Freedom?

Rinsing & Repeating the House Hack

When you use owner-occupied financing, you have to live in the property for at least one year. So that’s exactly what the Hoefler twins did.

Seeing how easy it was to house hack and generate rental income, the twins knew they were onto something. They wanted to expand their portfolio.

The first thing they did was look for other ways to lower their expenses, so they could put more of their income aside for their next property. If you’ve ever read a single sentence about FIRE (financial independence, retiring early), you know that the first rule of FIRE is maximizing your savings and investments. (FIRE Challenge: Start by brainstorming ways to live on half your income!)

As they neared the end of their first year of house hacking, they set out to find another multifamily to house hack. They successfully rinsed and repeated this process for several years, living in the property for a year then buying a new multifamily and moving in, with owner-occupied financing.

Which is a great way to start, but not a viable long-term strategy.

First, it’s slow. It limits you to a maximum of one property per year.

Another problem is that at a certain point, conventional lenders stop lending to you. Most conventional lenders allow a maximum of four mortgages on your credit report.

Then there’s the fact that you have to move every… single… year. That gets old, even when you’re in your 20s—especially when you get married, and your wife isn’t keen to live with your twin brother for the rest of your lives. Which, of course, is exactly what happened. It was around this point that Scott married Jennifer, and this whole hopscotch-investing plan started showing its limitations.


Fortunately for the Hoefler twins, Jennifer instantly saw the appeal of the twins’ vision. She looked into the FIRE and liked what she saw.

With her contributing a third income and the rapidly accruing income from their rentals, Team Hoefler set their sights on 20%-down rental property loans.

They picked up two single-family rentals. The first was rented for $1,350, which they bought for $107,000—a straightforward enough deal.

The second was a small one-bedroom home they picked up for $65,000. “Initially, we planned to rent it conventionally at around $900, but while we were doing the turnover updates, we listened to a BiggerPockets episode about Airbnb. Halfway through the hour-long episode I decided to make it into an Urban Cottage and make well over $900/month using the vacation rental platform.”

Scaling & Strategy

“Most of the properties we buy need heavy cosmetic work: paint, cabinets, floors, bathrooms, light fixtures, and so on. We do most of the work ourselves.”

It helps to be handy!

The Hoeflers have also tried their hand at full renovations, though those haven’t always been smooth (more on that shortly). But typically the Hoeflers follow the BRRRR strategy: buy, renovate, rent, refinance, repeat. They use hard money to finance the acquisition and renovations, then refinance to a 30-year fixed rental property mortgage.

"Our business model is to find properties that are undervalued from a rental perspective and do heavy cosmetic work to push market value. Or find complete remodels where we can capitalize on the potential ARV (after-repair value)."

The result? They average around $350-400 monthly net cash flow from each door.

Related: Why Financial Freedom Can Be Highly Overrated—And Not Necessarily Lead to Happiness

Missteps Along the Way

“Our first full remodel was a bust.

“We had issues with contractors, blew our budget and eventually ended up with an overpriced home that wasn’t even completed. We still own the home today, as a rental with minimal cash flow.”

The good news?

“Our saving grace is that we went into the project with plenty of backdoor options. The property is in a fantastic neighborhood, which has been seeing solid growth. We knew that the rental market would be strong enough to at least break even.”

I asked the Hoeflers about what they learned from the experience.

“The main lesson (among many others) is ‘Do not make decisions based on need.’ At a certain point we realized we were in over our heads, and we failed to think through our options and the long-term consequences of our decisions. We were making emotional decisions based on our current sense of need.”

Reaching FIRE & The Ever-After

“The stability that real estate investing has brought to our lives meant we have been free to change careers, build businesses, travel, and ultimately give back in ways we never thought possible.”

The twins quit their day jobs, but they found they loved investing in real estate enough to keep going. Today, they sell small multifamily properties to other investors in the Twin Cities, through a company called The Duplex Doctors.

Why retire when you’re having so much fun making money?

“Altogether, along with my wife Jenny and my brother Drew, we own eight total properties with 14 doors. We are about to close on another four properties with seven doors.”

I asked Scott about his final words of advice for anyone looking to reach FIRE through rental properties. “Sit down and think through your ‘why’ for purchasing real estate.

“Everyone says ‘money’ at first. But to be truly successful in this industry, you need a deeper reason than just the desire to make money.”

So? What’s your “why,” Scott?

“For me, my time is my most valuable resource. My hope is that real estate will allow me the capacity to give back to this world in ways a standard 9-5 job can’t.”

It’s hard to argue with that.

Interested in FIRE from real estate? What’s your “why”? How are you approaching the journey to FIRE, and what are your questions along the way?

Weigh in with a comment!

G. Brian Davis is a landlord, personal finance expert, and financial independence/retire early (FIRE) enthusiast whose mission is to help everyday people create enough rental income to cover their ...
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    Huiping Sheng Homeowner from Tampa, FL
    Replied about 2 years ago
    Very inspiring for people who have much better income.
    G. Brian Davis from Baltimore, MD
    Replied about 2 years ago
    I love their story too Huiping! It’s worth mentioning that they never had large incomes however. They just lived very lean, and house hacked to remove their housing payment.
    Nathan G. Real Estate Broker from Cody, WY
    Replied about 2 years ago
    It’s a pretty simple process for those willing to put in the effort and be patient. Thanks for sharing, Brian!
    G. Brian Davis from Baltimore, MD
    Replied about 2 years ago
    Thanks for the comment Nathan! And you’re right, it’s attainable for anyone, although most people aren’t willing to delay gratification to do it 🙂
    Aaron Wright Investor from Collinsville, Illinois
    Replied about 2 years ago
    Good on them for getting started so early in life!
    G. Brian Davis from Baltimore, MD
    Replied about 2 years ago
    Right? It’s enough to make a person jealous!
    Starr Munoz from SAN ANTONIO, TX
    Replied about 2 years ago
    Definitely inspiring, thank you for sharing!
    Kevin Zolea New to Real Estate from Parlin, NJ
    Replied 9 months ago
    Awesome story! This is exactly how I want to get started.