Soo many people to thank- Closing in on 7 units in the first year
I almost did not take the time to write this, then I thought about the stories I read when I was first starting out and how they motivated me. I love this community and I remembered, we share not to brag, but to motivate and support each other. For the last year I have immersed myself in real estate and it has been nothing short of life changing, I hope my story inspires someone to make the leap. Here is my story:
It has become somewhat cliché to mention the book Rich Dad Poor dad on BiggerPockets. On the surface you could argue that it’s not really that great of a book. It is filled with lots of fluff, and the main points could probably be summarized in just a few pages. But for some reason this book seems to be the one that fundamentally changes peoples mindset towards wealth and money. For me as with many others, it did just that. I don’t remember exactly when I picked that book up, it was roughly a year ago, but when I turned the last page and closed the cover I knew things would never be the same. I immediately started doing research online, and that research led me straight to BiggerPockets, I was hooked. Over the next 4 months I listened to every single BP Podcast (some of them more than once), I read (or listened to on audible) over 50 books, went to networking events and took every local investor out to lunch that would talk to me.
At this time in my life I had never owned a home before never mind an investment property. I did not want to wait and after reading some of Brandon Turner’s articles on house hacking I decided that a duplex would be the perfect first investment to get me started. One thing led to another and 4 months after starting the knowledge quest I pulled the trigger. I found a duplex that was in great shape on one side and a disaster on the other. Of course I rented out the good side and went to work fixing up the other for myself to live in. I had used up most of my available cash on the down payment and renovation so I started trying to figure out how I could continue to invest without a lot of cash. I remember reading about purchasing houses “subject-to” in the book on investing with low and no money down (thank you Brandon ). I started cold calling for rent and for sale by owners on Craigslist trying to see if I could find someone who would be willing to sell me a house subject to the existing financing. A month after closing on the duplex to my surprise I had someone interested. It was intimidating and confusing trying to negotiate this process, but with a little guidance from a local investor I pushed through. A few months later I had the place renovated (I used a contractor this time to speed things up) and I sold it on a 4 year contract for deed arrangement for a nice profit.
At this point I really started thinking about my long term strategy and goals. I set a lofty goal of becoming financially free in 4 years and I laid out a step by step plan on how I would accomplish it (how many units I would need, cash-flow per unit, equity gain etc. etc.). It was around this time that I received some disturbing news from my work that threw a huge wrench into my future plans. I worked for a construction and engineering company, during the early part of my career that meant moving around the country from project to project. For the last 3 years I had been working out of our district office in Kansas City which gave me a great opportunity to invest. I will never forget my manager coming into my office and telling me they would be assigning me to a field project within the coming year. The field assignment would come with long hours, 6 day work weeks and it would relocate me away from my investments. I found myself in a really tough spot. I had put an enormous amount of effort into learning real-estate and there was no way I was going to just stop investing. I even briefly considered quitting and trying to flip houses to support myself, after careful consideration I decided it was too early and that was too risky. I was very fortunate to have another stroke of good luck. Shortly after a recruiter from a Kansas City based engineering firm reached out to me, I interviewed and I got the job!
The new job turned out to be a blessing in disguise. The job came with a pretty substantial pay bump, a more flexible schedule and it freed up a sizeable chunk of money from my 401k , company stock liquidation and vacation pay out. It was time to buy more houses! I was fascinated by this BRRR strategy I kept coming across and I found several local investors who were using it successfully. I decided that was where I was going to put my focus. I loved the idea of combining the benefits of house flipping with buy and hold investing. The problem was that I had learned from the townhome experience that managing a rehab while working full time was not the easiest thing to do. There was only one of me and I could not be two places at once. When I closed on the duplex and townhome I had to take a half day for the home inspections, I was meeting the contractor over my lunch break and I felt like things would start to interfere with my work if I could not figure out how to get some help. I needed a partner, someone who could be there with boots on the ground while I was at work. I met a local full time investor through my REI club Facebook page and we started talking. I talked about my struggles managing contractors while being employed full time and he talked about his struggles getting financing without a normal W-2 income. It was a perfect match. With the help of an attorney, we formed a new 50/50 joint LLC shortly thereafter and this week we closed on our first two BRRR properties together. I also recently finished rolling my 401K into a checkbook control IRA. if everything goes as planned I will hit 7 units in my first year as a real estate investor.
I took some time this week to reflect on where I started, where I am, and where I see myself going. It has truly been an amazing experience. I have met so many inspiring and motivating people through real estate investing. When we were kids we all believed anything was possible, somewhere along the way most of us become jaded, we started making excuses and we gave up on our dreams. Today I feel like a kid again, it sounds a bit corny, but it’s true. I have a new-found sense of purpose, motivation and confidence. I am not yet where I want to be, but for the first time in a long time, maybe ever, I feel like I am headed in the right direction. Soo many people to thank, and I am incredibly grateful for BiggerPockets and the amazing people on this site. Thank you,
-Ian Reeves