Real Estate Investing Basics

Retiring on Real Estate—Despite Starting in My 40s!

Expertise:
9 Articles Written
Pensive young entrepreneur looking at laptop screen and drinking coffee at table in cafe

Throughout adulthood, I’ve committed plenty of the common financial mistakes—spending more than I make, charging items I cannot afford, saving minimal to nothing, etc. Almost any financial mistake you can think of, I made it.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

It took me until I was almost 40 to figure it out. If it were not for forced retirement savings through my employer, I would have little to show for the bulk of my life’s earnings.

While all those decisions put me behind the “retirement eight ball,” they also led me to explore ways to supplement the amount I’d saved. This is how I landed on real estate as a means to fund my retirement. Utilizing my investigative skills as a law enforcement officer, I looked into several different ways that real estate could play a role in my future plans.

Sure, all the real estate flipping shows on TV make it look easy and foolproof. But in reality, I found that much of the focus on high-end finishes—those that command the highest return—do not bode well here in central Nebraska. Functionality is a premium over granite countertops, and luxury vinyl plank flooring is preferred over hardwood or travertine tile. As such, it immediately became evident that flipping houses was not the best way for me to get into real estate.

During the due diligence phase of my research, I found BiggerPockets’ podcasts and quickly became hooked. The information presented by Joshua Dorkin, Brandon Turner, and David Greene was concise, logical, and well articulated, as was the advice of numerous podcast guests who had years of practical experience.

finance-software

Traditional Real Estate Investing Advice

I found that the general consensus was to purchase residential investment property (either single or multifamily homes) and then determine if the property would cash flow an amount that would pay for all expenses—both fixed and future—plus an additional $100 to $200 per door per month profit (minimum). Once these types of properties were located, investors were encouraged to obtain a preferred 30-year mortgage to fund the purchase.

Properties could be purchased locally or out of state, and using a property manager to oversee rentals that couldn’t be owner-operated was advised. For me, I concluded that buy and hold real estate was the appropriate avenue toward achieving my goals.

In spite of my past financial blunders, I had been able to pay off almost all of my debt, including vehicles and credit cards. The only debt I still owed was on my house and some lingering school loans.

I threw approximately $350 extra toward the principal on my house each month, which I paid $72,000 for in 2005 and put another $20,000 into. As a result, I had a large amount of equity in it.

Again, I live in central Nebraska. I have realized that small-town America is one of the most overlooked investment locations. So this all sounded exceptionally logical and like exactly what I was looking for—that is, until I began to more closely examine my goals.

Related: Ultimate Beginners Guide to Real Estate Investing

How & Why My Investing Path Differs

My twin brother and I decided to team up in our real estate endeavor, as we both had the same end goal in mind: to be debt-free and able to fully retire by age 65. We wanted to be able to utilize cash flow from rental property or slowly sell off our portfolio to supplement our retirement and fund various other projects.

We live simply, and with our personal residences paid for and no debt by retirement age, we determined that 20 properties—or 10 each—would suffice to pay for projected expenses and to financially help our kids and other family members (something that is important to us).

Since we wanted to keep our investments free and clear by age 65, we determined 30-year notes would not fit into our business model. As of then we were 45, so we would’ve been 75 by the time the property debt was retired—something we did not want to have to deal with for that many years.

Yes, I know, many of you may be saying that a 30-year note is safer. And if we wanted them paid off sooner, it’s simple. All we’d have to do is put more toward the principal each month. This would also allow us to have the security of a lower payment while keeping the flexibility of increased payments to pay the note down faster.

However, I have discovered one of two things happens: either you do not put any extra toward the principal, or if you do, you are essentially paying the same as if you had acquired a 15-year note and your “cash flow” is still gone.

Before I go further, I want to point out an old saying attributed to Samuel Clemens, better known as Mark Twain. He said, “Figures don’t lie, but liars figure.”

Essentially, figures can be tweaked to say about anything one wants them to say. That being said, I realize that there are many who would argue about why our thought process is wrong and why a 30-year note, the 2 percent rule, cash on cash return, and a multitude of other proven techniques are the only legitimate and safe ways to proceed in real estate.

I agree that, for many, what is commonly pursued by investors is the logical way to go. However, the vast consensus is not the only way. In our situation, we look at our real estate investments as simply a savings account as opposed to looking at them from a cash flow or even an appreciation standpoint.

retirement_income_net_worth

The Math Behind My Method

For example, for the sake of simple math, say I purchase a duplex for $144,000. I obtain a 15-year note, which means I am paying $800 in principal per month to pay it off in 15 years.

As I said, our goal is to have 10 properties each, or deposit $8,000 per month in “savings.” I make $60,000 a year working my main job, and I have four children. There is no way I can save $2,000 a month—let alone $8,000.

But by using the process I described, at the end of the 15 years, I will have saved (and my brother will also have saved) $1,440,000 using someone else’s money.

That is it. That is how we view real estate investing, as simply a forced savings account. If we can break even on a property on interest, taxes, insurance, vacancies, capital expenditures, and maintenance, we are happy. We do not use any of the cash flow except to put it back into the property or pay down the note (normally there is less than $50 a month).

There is one stipulation to all of this: the investor must have access to capital or a line of credit to pay for unexpected expenses. If not, this method would be tempting fate—and sooner or later, fate would probably win.

One of my core beliefs is that real estate investing is flexible. If I was in my 20s or even early- to mid-30s, I would instead look for properties where the numbers follow mainstream advice. But I squandered those years, financially-speaking.

I am now 48 years old, and the thought of purchasing property on a 30-year note does not appeal to me. This is also the reason I do not invest out of state or even out of my area. I want to see, manage, and maintain my properties myself. I do understand the concept that time is valuable, but I would defer again to the saying by Mark Twain concerning “figures” on this.

I purchased my last two properties from an out-of-state owner who had them “professionally managed.” Numerous basic maintenance issues were overlooked. What did I learn from that? Professionally managed does not necessarily mean well managed.

I have purchased four duplex properties and built a small micro-duplex. All four purchases have been private sales, with three of them owner financed. In all, I have not paid one single dollar out of pocket for the purchases.

I have a line of credit I utilize, as well as collateral when needed. What I want people to understand is that investing later in life is not only possible but logical. For people in their 40s, 50s, or even 60s, investing in real estate can provide a much-needed boost of income for retirement years.

One advantage to investing later in life is the ability to establish lines of credit, or have available collateral, or have available equity in a personal residence. Generally, those who are older have grown out of impulse purchases and the need for all the newest toys or gadgets. We have learned that a vehicle simply gets us from point A to point B and that it does not have to be the latest and greatest model. (My newest vehicle is a 2004.)

Related: 50 Or Older? Even With A $500K 401(k) You Know You’re Not Retiring Anywhere Near Well

Age Is Just a Number—Even in Real Estate Investing

For most people, income from primary employment is sufficient to cover basic living expenses. In our case, having well-established careers allows us to focus on real estate debt service and not cash flow.

I hear time and time again, podcast after podcast, to focus on starting early in life, working hard, and building a portfolio that will allow one to travel the world and collect monthly checks with minimal effort.

This article is for everyone out there like me, who did not do the prudent financial things during their early years of adult life. This is for those who may not become multi-millionaire real estate investors but simply want to obtain property in order to supplement retirement—not completely fund it.

Real estate is flexible enough to be tailored to fit a multitude of individual situations. What is important is not necessarily how much one can cash flow each month. It is finding something that will work in a given situation.

If that means a 30-year note and a property that cash flows $200 per door per month, perfect! If that means a property to self-manage that won’t pay profits for years down the road, and one that may have out-of-pocket costs from time to time, that’s OK! Whatever works in a given situation should be pursued!

Do not sit on the sidelines waiting or playing the “what if” game because of what some real estate expert says is the best way to invest. Find an individual path and begin to walk it.

Now, please do not misunderstand me. I am not advocating for dismissing advice or for not listening to other experienced investors. I am advocating that real estate investing is flexible.

Perhaps buying properties out of state, financing with 30-year notes, and cash flowing enough to stop working is what one wants. A person could even decide to invest in three or four properties at age 50-plus and pay them off in 10 or 15 years by pouring all of the rents back into them. Choose your own adventure.

The end goal in real estate investing should be the focus—not the means of getting there. The real estate path may be the one less traveled; it may be rocky with lots of ups and downs. Just keep on the path, and eventually, you will find your way.

Louis L’Amour said it best: “There’s no stopping a man who knows he’s in the right and keeps a-coming.”

What do you think about my investing strategy? What other advice would you offer those who are getting started in RE investing later in life?

Comment below!

 

Wayne Connell is a Deputy Sheriff by night and a budding real estate entrepreneur at all other times! In 2015, Wayne and his contractor brother teamed up to purchase and develop a real estate portfolio to supplement their retirement incomes. While Wayne has only been aggressively educating himself and pursuing real estate since 2015, he has owned two successful small businesses over the years and “dabbled” in real estate prior to this by buying and rehabbing the occasional property. Wayne and his brother currently own five duplex properties in small towns in central Nebraska. Wayne’s focus is on multi-family properties in rural areas, which he believes is an often-overlooked niche in the real estate investing world. Although he is far from being an expert, Wayne has more than a little experience locating and obtaining owner financed properties. Furthermore, he has used some creative techniques to maximize potential profits via owner financing. Wayne’s business model is focused on paying off properties quickly instead of utilizing the main stream system of cash flow. When not pursuing his property interests, he can often be found reading or growing his collection of antique books.

    Kevin Polite Flipper/Rehabber from Decatur Atlanta, GA
    Replied 8 months ago
    Wayne, great post. I started at 49 in the worst economy possible, but it allowed me to get great deals. People said we were crazy for flipping in 2011-14, but people were still buying and rents never really went down. one thing I’ve learned is that there is no one right way to invest in real estate.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Kevin, Thank you for the reply. I wholeheartedly agree with you that there is no one way to invest in real estate. As I try to get my kids to understand, just pick a direction and stick with it. Wayne
    Jason Mathew Investor from Spring, Texas
    Replied 8 months ago
    Great Post Wayne. I start in my early 40’s and I”m really starting to scale this year 2 years later. I agree with you that age generally brings some maturity and clarity in the decision making process.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Jason, I still make bad decisions in the financial world from time to time, but I have outgrown the need to have a flashy new vehicle with a large monthly payment! Thanks for the post. Wayne
    Kevin McGuire Rental Property Investor from Seattle, WA
    Replied 8 months ago
    Hi Wayne, Great post. I started around age 50 and have built up a portfolio of 7 SFHs and a recent 4 plex. Like you I did it for retirement planning. I think the only time horizon that really matters is whether you can effectively amortize your acquisition cost (both dollars and effort) and avoid having to sell in a down market. After that there are lots of ways to finance or extract equity.
    George P. Property Manager from Livonia, MI
    Replied 8 months ago
    Paying off the mortgage is silliness. It’s a tax write off. Helps your bottom line. If u do payoff, what are u going to do with the equity in bricks/studs? Someone sues and they can get a house? If it’s mortgaged, they won’t sue… Silliness
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    George, There are a lot of people out there smarter than me and a lot of people who will agree with you. For me, I prefer to pay off the mortgage. It may not be the best way financially according to many but it allows me to sleep better at night. Thank you for your input. Wayne
    Chanik Park
    Replied 8 months ago
    Wayne, Thanks for your article. It seems to me that no matter which way you look at it, it’s always going to come down to an extra few bucks in your pocket vs. peace of mind. Everyone values one more than the other, and by differing amounts, so there’s really no right or wrong answer. I worked on Wall St. as a financial advisor and this is like assessing a client’s risk tolerance. It would be totally unprofessional for me to tell someone to switch their investments because they’re “leaving money on the table, and I can get them potentially 5%-10% more per year. All we have to do is jack your risk up a bit, yeah……” Instead we tailor investments toward the client, not the other way around. I see real estate investing in a similar vein. There is no 1 size fits all approach to this game. Everyone needs to assess their own individual priorities first and THEN look for the investing strategy that fits who they are, and not the other way around. Not all of us feel comfortable holding dozens of mortgages, and rightly so.
    Christopher Smith Investor from brentwood, california
    Replied 8 months ago
    Tax write off logic: I lose 70 cents on every dollar, but I make up for it on volume. Suit Protection: That’s what legal entities, good management and/or umbrella insurance (which is dirt cheap) is for. I see no problem with his strategy, it made me a MM
    Vaughn K. from Seattle, WA
    Replied 8 months ago
    The CoC return numbers with financing do not lie! BUT you are taking on theoretical risk. IMO it all depends on what stage you’re at in life, if you want growth or security… And the TYPE of financing is everything. If you have a bunch of exotic balloon payment, variable APR crazy loans, that’s a lot of risk. But if you have all long term fixed rate loans, the risk is pretty small. Such loans on SFHs/duplexes etc weren’t even called during the Great Recession, so it would take something worse than that to have banks calling loans.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Christopher, Thank you for the comments. I agree with your thoughts and applaud the fact that your strategy has made you very successful. Wayne
    Tina Huffman from Napa, CA
    Replied 7 months ago
    Kevin – can you expand on what you mean by “whether you can effectively amortize your acquisition costs”?
    Stephen Predmore Rental Property Investor from Baltimore, MD
    Replied 8 months ago
    Wayne – you’re a true inspiration. Love your article. I too am approaching 50 and have often felt like I squandered my 20s and 30s having fun, and not saving enough for REI. For the longest time I have been ‘this close’ to pulling the trigger on my first deal. I love your systematic approach, nothing flashy, reinvesting any cash flow back to pay down the 15 yr note faster. Forced saving.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Stephen, Thank you for your comments! I saved nothing except what I was forced to through my employer for most of my life. Money was always burning a hole in my pocket. I regret my failure to plan better for my future but am trying to correct that now. Pull the trigger and make it work for you! Good luck! Wayne
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Kevin, You make an excellent point regarding the ability to amortize your acquisition cost. I had not looked at it from that angle. I realize there are two schools of thought on whether it is a good idea to pay off a mortgage but in my situation, I want the security of owning the property. If my financial situation takes a turn for the worse I want to know I own the property and not the bank. Essentially, until it is paid for person holding the note (whether it is a financial institute or private party), owns the property and we just lease it. I may “own” a piece of it but it is not mine to do whatever I want with until it is paid for. Thank you for the comments. Wayne
    Hazen Mcvicar Investor from Olathe, Kansas
    Replied 8 months ago
    Wayne, sounds like you have a good plan to me. I am doing something similar….all I need is 5 to 6000 per month cash flow for retirement. I laugh when I read financial advisors reccomending you need a million dollars saved before you can retire!! I won’t spend most of that, just help out my kids and family!
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Hazen, My ultimate goal is to be able to help my kids purchase homes, invest in a business or fund grand kids college tuition. For myself and my wife, we are in the home we will retire in and do not require much to live on. Good luck with your investments! Wayne
    Memo Hernandez from Las Vegas, Nevada
    Replied 8 months ago
    Awesome post ? just hit 40 bought my first investment property. Plan on buying one every year . Thanks for the Post
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Guillermo, Thank you and congratulations! I hope it goes exceedingly well for you. Wayne
    Marshall Gerston Investor from Scottsdale, AZ
    Replied 8 months ago
    Interesting. I just read another article here that talked about how no debt is acceptable. Only cash deals. This article promotes working leverage to gain an advantage over time. Goes to show you that there isn’t necessarily a right and wrong way to get ahead (or behind) in real estate.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Marshall, I love that you pointed out that you can also lose in real estate as well and there are a multitude of ways to succeed or fail! Thanks for the post. Wayne
    Randy E. Rental Property Investor from Durham, NC
    Replied 8 months ago
    Wayne, more or less, I started in my 40s also. Coincidentally, or maybe not so much, my philosophy is very much the same as yours. The beauty of REI is there is something for everyone. For the $200,000/yr earner who already has a wealth of other retirement accounts set up and is looking for completely passive income, there are options for that. For the $15,000/yr earner who has no money and bad credit, there is wholesaling or bird-dogging. And there is something for everyone in between. The niche you described works wonderfully for a lot of modest but steady earners who are looking to marginally enhance their current life, and greatly enhance their down-the-road lives. Keep chugging, brother!
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Randy, Thank you for the reply. I agree that in RE there is a little something for most everyone. I would bet that there are more people in RE who own under 10 properties than there are who own over! I believe that there needs to be as much focus on “meat and potatoes” of the real estate world as there are on the “superstars.” It is good to find like minded people, keep in touch! Wayne
    Vaughn K. from Seattle, WA
    Replied 8 months ago
    I’ve always planned on investing in real estate (I was the kind of geek who read about this stuff in my teens!), and was doing AMAZING in my mid 20s with my own business. I was spending more money than I needed to or could have to be comfortable, but not being TOO bad. I was literally looking at properties and ready to pull the trigger on the first one… Then things went wrong. Things that were mostly out of my hands even. None the less I felt like an idiot for a couple of decisions that were really pretty rational at the time, but ended up resulting in a 6ish year delay in getting into RE. I missed getting into the market at the lows of the recession! Lord only knows how much more money I would have made by this point! Oh, so dumb! But hindsight is always 20/20, and I’ve got over it. I’m now in my early 30s and repositioned for getting going in earnest now! Beating yourself up about mistakes in the past will do you no good. In the grand scheme of things, mistakes and all, the fact that I’m on solid footing, learned some good life lessons, and ready to set myself up for long term success… I’m not doing too bad! It’s never too late to start doing things the right way.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Vaughn, It sounds like you are well on your way to a very successful career in RE! As you said, the past is the past and you can’t let it keep you from your future. I preach to my brother in laws all the time, essentially what you said, it is never to late to start investing and furthering their retirement income. Thanks for reading! Wayne
    Deadrick Colbert Investor from Easley, South Carolina
    Replied 8 months ago
    Great post, Wayne. I really enjoyed reading it.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Deadrick, Thank you for reading, I do appreciate it. Wayne
    Charla Crater Rental Property Investor from USA
    Replied 8 months ago
    This is very motivating. I just established my own Real Estate company to wholesale property, as well as acquire to build a portfolio. This assures me that even with a late start in this business, it is very possible to achieve your goals. Thanks for sharing!
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Charla, Congratulations! I hope you succeed beyond your wildest dreams. Wayne
    Steve Elling Rental Property Investor
    Replied 8 months ago
    Great stuff and definitely an alternative path to what sounds like a huge pot of gold in 15 years, Wayne. You and your brother managed to start a legit investment portfolio funded solely with other peoples’ dinero. And like a 401k, you don’t plan to touch it until reaching retirement age. Use a HELOC for emergency appliance purchases or fixes. Seems like solid reasoning. In the local parlance, it just goes to show that there is more than one way to shuck corn. I sort of split the difference. My wife and I have five SFH rentals. Two are paid off, while three have medium-sized 30-year mortgages that I plan to pay down aggressively, once we stop buying properties. 🙂 P.S., I drive a 2008 Toyota. And not because I have to. Cheers and best of luck.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Steve, It sounds like you have followed your own path as well and are making it work! That was exactly the main point in my article. Thanks for reading. Wayne
    Rickey Hughes
    Replied 8 months ago
    This is the perfect article I needed to read at the perfect time! Than you for the insight. I turn 40 this summer. I’ve been doing tons and tons of research on this for a few months without actually pulling the trigger, the thought of having multiple 30 yr mortgages at this stage in my life is driving me nuts. But, I do need some sort of cash flow or supplemental income for retirement or else I’ll be working till the day I die.. Thanks Again, very inspiring!
    Vaughn K. from Seattle, WA
    Replied 8 months ago
    Having a mortgage when you are old, or when you eventually pass on and leave it to your kids, is not a big deal. Who cares? You’ll ALSO have tons of cash flow in your pocket every month 10, 15, 20 years from now, AND tons of equity to tap into if you need it. If you have tons of cash coming through the door the fact that you’re paying what will then be a relatively small mortgage won’t matter a bit really.
    Brett Johnson
    Replied 3 months ago
    Would it make some sense to use a “cash out” type mortgage to maintain the tax write off and use the cash-out to buy additional SFH rentals? Essentially leverage your equity to acquire more properties while using the debt in your favor?
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Rickey, I am glad I could offer some perspective. As many say on BiggerPockets, the first purchase is truly the hardest. Once you get that under your belt you will be on your way. Thanks! Wayne
    Jenny Moore Investor from Bremerton, WA
    Replied 8 months ago
    Wayne, Thanks for a different perspective on real estate. Just like so many have commented, the “right” approach for one person is not the only way to reach goals in this industry. There are often delays and when I wanted things to “zig” they would often “zag”. I appreciate your willing to share your thoughts and strategies. Great article!
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Jenny, I think we have all experienced zigging when we should be zagging but eventually we get it right! Good luck and I appreciate the comments. Wayne
    Eric Pesek Property Manager from Austin, TX
    Replied 8 months ago
    Great article! I appreciate the optional view on reaching an end goal. I know I’ve heard others do this when their children are young to fund college…never really thought about doing it that way to cash out later, as needed. Another reason I love this forum.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Eric, I have always been an advocate of focusing more on the end goal than the method getting there, at least to some degree. The method is important but it can also vary greatly. Wayne
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    John, I feel your pain, kids are amazing but also expensive. There are a lot of costs with raising kids that those without do not realize. Best of luck and I am certain you will find a way to purchase your first investment property! Wayne
    Vaughn K. from Seattle, WA
    Replied 8 months ago
    John, it’s all in the expenses you CHOOSE man! As somebody who blew threw a good chunk over $100K a year as a single guy, and alternatively dated a girl whose parents had 7 kids where he dad had never made more than about $65K a year… How did he raise a big family and buy a house on less than I supported myself for? It seemed like madness! It’s all in your expenses. Most people expand their spending to meet or exceed their income, no matter how high it goes. You could probably live on $75K a year if you wanted to. $100K reasonably comfortably. You could still live VERY well if you lived in $150K, with $50K a year to save. If you REALLY want the capital to invest you might have to choose to give up the BMW, the lattes, the eating out, as many vacations, spoiling kids with stuff they really want and you REALLY want to give them to make them happy… And it will suck for awhile. But then comes the payoff, and you can resume that stuff AND be getting ahead financially. Or you can not. But then you won’t be able to hit investment goals. It’s a choice. There are a million books, blogs, videos, etc about how to dramatically cut your expenses. With that kind of income there’s no reason you can’t save a lot of money if you even just barely taper back on some things for even a few years.
    Brian Findley Rental Property Investor
    Replied 8 months ago
    Great article Wayne! I like that you have figured out how to make real estate work for you – your goals, and your time horizon. I have a similar goal – to end up with enough cash flow at retirement to support basic living expenses (this will be about 13 properties for me). Coupling this with my other investments will provide a secure income. I’m about 10-12 years away, and 11 properties. Planning to acquire 2 properties per year (1-4 unit props). Good luck with your plan!!
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Brian, Sounds like you have a similar plan as ours which is two to three properties per year over time. Good luck with your investments and thank you for reading. Wayne
    Colin March Rental Property Investor from Portland, ME
    Replied 8 months ago
    I like this post for so many reasons. You laid out a path that works for you and weren’t preachy about how an investor MUST act. People have difference backgrounds, financial resources, timelines, risk tolerance, etc, therefore, there are so many different ways to make real estate work. I also like that you mentioned that small town investing is an options. I own multi-family buildings in towns with less than 10,000 people and they have been awesome investments. Lastly, congrats for being honest about your earlier mistakes and for starting to invest at all, even if it was in your 40s. This should be inspiring for those who think they missed the boat.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Colin, Thank you for the reply and I feel the same way you do, that there are many different ways to invest in real estate. It is important to find one that works for you in your situation, not just do what everyone else is doing. Doesn’t mean one way is right and another is wrong, just that they are different. I own property in a town of 1200, 600, and 26,000 so it works in every size community! Wayne
    Lisa Monnig Investor from Malvern, Pennsylvania
    Replied 8 months ago
    Such a great post! I lost my rentals in the divorce (he bought me out) and now have to start over again living in a suburb of Philly. The ROI is not worth it and you can’t make money at least where I live. So my new husband and I are buying beach rentals in S.C. They are in a town we love and will ultimately retire to. We close on a turnkey one this upcoming Wednesday that already has the summer months booked through air bnb and then we locked in a buy price on a fixer for an October close. I don’t love having escrow money tied up for 5 months but by the time all of the comps are closed, we are buying under market so we’ll already have equity. Essentially, what I’ve learned from BP is to read all of the articles and blogs you can and then make your own REI decision based on your market, comfort level, local research, goals, etc. There really is no one way and no right way to invest in real estate. Being older (48 – God help me), means having amazing credit, equity in my primary residence, and heck of an IRA and 401(k) that I can leverage. I’m not advocating for leveraging all of those assets, but they have helped me gain credibility with lenders and helped me score better deals. Love your 15 year loan idea instead of a 30 year – I’ll explore that one for the October close. I always learn something here!
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Lisa, I am glad you took something away from the article! It sounds like you are back on the horse again, so to speak, and well on your way. Congrats! I am of the same mindset as you, read what you can and pick out the parts that apply to your situation and then create your own approach to RE investing. Thank you for reading. Wayne
    Gloria Dell
    Replied 8 months ago
    This was what I was looking for. Newbie here–this is my first post! I have been stalking BP and thinking, “There’s no one here like me.” I am 58 and retiring in 8 years from teaching. I will have a decent retirement and I have no interest in leaving early, as I still have goals I want to accomplish. After discovering BP on YouTube, I got it in my head that I want to acquire 10 doors in the next 8 years and have each cashflow $100. I plan to reinvest the $100 until I retire. At that point, I should have an extra $1000/month “mad money.” The equity is for my children, so I’m ok with 30 year loans at this point. I am more interested in the four square cash-on-cash return. (I live in the Palms Springs/La Quinta area of Ca., so forget the 2% rule!) Thank you for sharing your path. From your experience do you see any flaws in my personal plan? I am glad to learn from others’ experiences. Like most teachers, I also love learning! Thank you.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Gloria, I think that if what you are doing works for you financially, then continue on. There is always a better way to do most anything, but it sounds like what you have planned will work out well. Ultimately we are all after the same thing, financial security. We will just all have different experiences getting there! Wayne
    Theron Troxel from Adams, Nebraska
    Replied 8 months ago
    Great read. I am just starting and pretty much in the same boat as you and even in the same state (GBR). Thanks for the article!
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Theron, Thanks for reading! I hope the Huskers fare better this year than last! Wayne
    Nicola Fraser Rental Property Investor from Pelham, NY
    Replied 8 months ago
    Great perspective. I love the reminder that real estate really is flexible. I started investing last year in my 40’s too!
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 8 months ago
    Nicola, Good luck, It is always nice to hear there are others out there like me. Wayne
    Casey Langley
    Replied 7 months ago
    Wonderful. Inspirational. As a 46 year old with a significant history for hanging out with stupid regarding financial decisions. Wayne really spoke of a feasibility that was inspiring. Thank you for facilitating my first deal.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 7 months ago
    Casey, Thanks for reading! Good luck on your first deal. Wayne
    Aaron Wright Investor from Collinsville, Illinois
    Replied 7 months ago
    I’m starting later in life also. My first property is actually my previous home that wouldn’t sell, that I put on a 15 year mortgage thinking that during the time it was on the market, I may as well get more loan pay down. After nearly 3 years trying to sell, we moved to rent it. It’s been rented for 5 years, and is just now starting to cash flow, but we have a ton of equity now. That equity fueled the beginning of a portfolio loan, which I used to fund the purchase and half of the rehab for my first duplex. Also, it will pay off in 2027, same year I turn 50, and from then on will cash flow really nicely…
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 7 months ago
    Aaron, Sounds like you figured out a way to get out of a bad situation. Good luck, I am sure you will excel! Wayne
    Patrick M. from Wisconsin
    Replied 7 months ago
    Great article Wayne. GBR!!!
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 7 months ago
    Patrick, Thanks for reading! Wayne
    JUNIOR NELSON Rental Property Investor from Houston, TX
    Replied 7 months ago
    Wayne, as a fellow LEO myself at 45yrs, you just pulled the trigger on my service weapon! I currently am working hard long hours of OT on ‘extra jobs’ I cannot stand and would rather be working these extra hrs on my own REI. I did have 1 rental for 10yrs and sold it for $72k profit but for some reason, I have in my head that I need to work more OT to save $$ for another one (even though I have $36k in my savings). I am nervous as hell to use my own rainy day money. But at the same time, tired of seeing other officers spend thousands on guns, knives, bigger homes and new cars as I myself am debt free except my home. I will be able to fully retire as an LEO in 9yrs and plan on having 10 SFHs to supplement my retirement and not have to ever put on a duty-belt and clock-in after that.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 7 months ago
    Junior, I work as much OT as anyone on our department and I understand the reluctance of risking your hard earned dollars. However, if you follow a strict procedure for buying it seems to take a lot of the worry out of buying (maybe not all of it). I have about six more years and I want to retire from LE. I will be 54 and it is a young mans game working patrol! Good luck and stay safe out there. Wayne
    Tina Huffman from Napa, CA
    Replied 7 months ago
    You hit the nail on the head Wayne! I’m also over 40 – bought my first SFH last fall. My path is different from yours and many others, and I have my own reasons for pursing it the way I am. The point is, we have to figure out our own way, and not hold back because its not the same as the majority strategy.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 7 months ago
    Tina, Excellent thoughts! I hope all goes according to YOUR plan. Thank you for reading. Wayne
    Chris Hedlund from Fairfax, Missouri
    Replied 7 months ago
    This is probably the best article I’ve ever read on this site. I’m basically in the same situation and my thought process is similar as well. I’m in my 40’s and just now getting ready to start my venture into real estate. I too am not looking for immediate cash flow, but instead plan on deferring any cash flow until at least 10 years out. I plan on putting 100% of any rental money back into the properties, pay them down as fast as possible, while I continue to work my job. I’ve got more than 10 years left working, so hopefully by then, I can turn on the cash flow spigot and enjoy the returns…
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 7 months ago
    Chris, Thank you for the comments! It sounds like we both have the same game plan. Good luck in your real estate venture. Wayne
    Jeremiah Pangan from Los Angeles, California
    Replied 7 months ago
    It is a refreshing read – to see another perspective. Thank you for sharing.
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 7 months ago
    Jeremiah, thank you for reading! Wayne
    Craig Herrmann from Gloucester, MA
    Replied 7 months ago
    Hey Wayne, love the post. When you say 10 properties, is that individual units? At $8,000 a month, that $800 in cash flow per unit, correct? If that is the case, that is outstanding! Once your mortgages are paid off, wouldn’t your monthly cash flow increase, or are the numbers in your post averages across the 15 year period?
    Bill Blass
    Replied 6 months ago
    I think you’re a little too wrapped up about paying off the property while at the same time, too comfortable with long holding periods, which even 15 years is. But if it works for you, have at it.
    Pete Fiorini
    Replied 4 months ago
    Hey Wayne, just curious what methods you used to find owners willing to finance. These seem to be a little tough to come by. Any info appreciated. Thanks
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied 3 months ago
    Pete, I did nothing special. I searched properties with out of state owners and sent them a letter and asked. I was very lucky I guess as I bout three properties out of the first four letters I sent. I have since sent out dozens of letters with no success but in my opinion, the key is just to ask! Good luck and thank you for reading! Wayne
    Sheri Lemken
    Replied 3 months ago
    Congratulations Wayne first of all on your success. It is wonderful to hear your story and the comments from other “40 somethings” that are having success here! I am curious about the owner financing deals you have found. Did they require the same 20-25% down payments as traditional mortgages? I am wanting to learn about the “ no out of pocket for the purchases” part of your article. The main thing keeping me from purchasing a rental property is the huge down payment and then the time it would take me to save another $25-30,000 for another down payment. I too am behind the retirement 8 ball and looking for ways to get involved in real estate to help supplement what I currently have in place. Thanks again for the great article.
    Ryan Clearwater
    Replied about 1 month ago
    Great post! Http://www.retiringinlasvegas.com
    Wayne Connell Rental Property Investor from Hershey, NE
    Replied about 1 month ago
    Ryan, Thank you for the comment and for reading! Wayne