Investor · Kansas City, MO · Member since 2017 · 791 posts · 1k+ votes
My first real estate investment was in 2010. I kept acquiring properties, sometimes using the BRRR strategy. I've been without a day job for 1.5 years looking for more deals and got a couple large portfolios in 2016. That hit our passive income goals but we had to recoup cash buffer.
It's officially official, we are free and neither of us have to work!
Looking forward to living life with my wife and both of us being able to do what we want when we want.
Celebrating with a well aged cigar from the year it all started. And some of my top shelf bourbon.
From someone who is just scratching the surface education, not even investing, congratulations to you and your wife's success both now and in the future. This was certainly an inspiration to read.
@Austin Fruechting WOW that is unique to not have a banking relationship with your lender..
you had to build some reporte' other wise this does not happen.. at least for most.
anyway.. good job.. look me up if your out this way .. if your here in the summer can take you for a scenic ride we can go from the ocean to bend in 35 mintues LOL.. I am always looking for Victims EH passengers to go flying with LOL.
Sounds awesome! I think we'll be in that area next year!
@Austin Fruechting just curious were would you be if rents dropped 20 to 30% or if you had 20 to 30% cronic vacancy like what happened prior to you buying your portfolio..
do you accelerate your paydowns with the hope to get this stuff paid for.. or just keep max leverage and live on the cash flow so you don't have to have a day job.???
I know there is two schools of thought on this.. Many I know would not feel they are done or secure unless their debt was also retired.
@David Faulkner where would your portfolio be if this happened.. ?? I know most of the younger crowd here started after the GFC so they only know wine and roses and cigars LOL I just wonder how they will handle a crash.. if they don't have a job and their cash flow stops.
I'm one of those crazy west coast speculators living in a market that is way over inflated, so if this happened I guess I should be in big trouble ... then again, it is hard to go broke if you don't owe anybody anything. I may be tempted to go on a buying spree with excess cash if this happened, but would be hesitant to leverage back up to do it as I don't believe in risking things I have and need in order to buy things that I don't have and don't need. That's the way I roll out here on the left coast. We shouldn't piss on Austin's parade, Jay ... let the man enjoy the moment, he's earned it.
@Austin Fruechting just curious were would you be if rents dropped 20 to 30% or if you had 20 to 30% cronic vacancy like what happened prior to you buying your portfolio..
do you accelerate your paydowns with the hope to get this stuff paid for.. or just keep max leverage and live on the cash flow so you don't have to have a day job.???
I know there is two schools of thought on this.. Many I know would not feel they are done or secure unless their debt was also retired.
@David Faulkner where would your portfolio be if this happened.. ?? I know most of the younger crowd here started after the GFC so they only know wine and roses and cigars LOL I just wonder how they will handle a crash.. if they don't have a job and their cash flow stops.
I'm one of those crazy west coast speculators living in a market that is way over inflated, so if this happened I guess I should be in big trouble ... then again, it is hard to go broke if you don't owe anybody anything. I may be tempted to go on a buying spree with excess cash if this happened, but would be hesitant to leverage back up to do it as I don't believe in risking things I have and need in order to buy things that I don't have and don't need. That's the way I roll out here on the left coast. We shouldn't piss on Austin's parade, Jay ... let the man enjoy the moment, he's earned it.
Not raining on my parade at all! I love talking about this stuff and hearing the different ideas/market theories/etc. so please don't hold back on my account. I love this!
@Austin Fruechting WOW that is unique to not have a banking relationship with your lender..
you had to build some reporte' other wise this does not happen.. at least for most.
anyway.. good job.. look me up if your out this way .. if your here in the summer can take you for a scenic ride we can go from the ocean to bend in 35 mintues LOL.. I am always looking for Victims EH passengers to go flying with LOL.
Sounds awesome! I think we'll be in that area next year!
Feel free to make a pit stop in Huntington Beach CA if you like too ... I'll buy you and your wife a beer ... we'll leave the light on for ya' :)
Austin Fruechting very nice work! Could you perhaps give me some direction on resources that may show how to plan such a strategy out? Or was this just something that organically developed ?
@Austin Fruechting Congrats! That's gotta feel very rewarding to accomplish!
I've hit my number from my rental income and other business for being able to pay for my expenses and live comfortably, but I just feel like I'll have nothing to do if I quit my job since everything else is very passive. I'm not worried about the hit in lost salary/benefits, but more on how to productively use my time to improve my life.
How did you two make that transition (aside from the financials) in terms of re-allocating your time, business needs, other ventures, etc.?
@Austin Fruechting Congrats! That's gotta feel very rewarding to accomplish!
I've hit my number from my rental income and other business for being able to pay for my expenses and live comfortably, but I just feel like I'll have nothing to do if I quit my job since everything else is very passive. I'm not worried about the hit in lost salary/benefits, but more on how to productively use my time to improve my life.
How did you two make that transition (aside from the financials) in terms of re-allocating your time, business needs, other ventures, etc.?
Being productive is a big part of happiness. It takes a lot of introspection to figure that out. Time in thought and reflection is what it takes to figure that out for you.
Austin Fruechting very nice work! Could you perhaps give me some direction on resources that may show how to plan such a strategy out? Or was this just something that organically developed ?
Financial freedom was always my goal. So I looked to maximize cash on cash return to get there the quickest. That was the only strategy. It kept me open to all options that came along and adaptable along the way.
Congrats Austin Fruechting !
Can you share this...
What was your initial goal, if you set any?
Seems like massive action, 107 doors in 7 years. Would you recommend going all in? Are you afraid of over-leveraging, or how do you protect yourself from it?
Enjoy your cigar and new life
Can you share this...
What was your initial goal, if you set any?
Seems like massive action, 107 doors in 7 years. Would you recommend going all in? Are you afraid of over-leveraging, or how do you protect yourself from it?
Enjoy your cigar and new life
The goal was financial freedom. That was it. To free myself and my wife from having to work.
I certainly went all in. As one of my folk heroes Ron Swanson said; "Don't half as$ two things. Whole as$ on thing."
No I'm not afraid of over-leverage. Two reasons 1) I'm a cash flow investor, not concerned about appreciation. My properties cash flow fantastically from day one leaving lots of room even if things dip to continue making money. 2) I am an absolute numbers nerd. I push the line further than I would recommend most do, but only because I know most do not know their numbers like I do.
The best protection against failing for whatever reason is knowledge and education.
And thank you! I'm just about done grilling, I think I'll sit outside afterwards and enjoy a cigar and a book!
Austin Fruechting any advice for a single 25 year old looking to accomplish same goal. In the New Jersey area.
You can never study enough.
Oh, and bonus for motivation: YOU'RE GOING TO DIE. That's the best motivation right there. You never know when. You could die tonight in a car wreck, or it could be 75 years from now of old age. Live your life right now. Be the person you want to be, not who others think you should be. Don't waste time on "someday". Start living the life and being the person you want to be right now. You want to be a successful real estate investor? Start being that person right now. That doesn't mean rush into buying things, but start learning everything you can. Read a real estate instead of binging on netflix on the weekend.
Austin Fruechting i kid you not I was thinking that yesterday while sitting in my car debating on my first deal! I'm going to pull the trigger. Plan on using fha on a 3-4 unit then keeping the ball rolling from there! First putting my self in a living for free situation while cashflowing. Saving the income along with money from my current job then keep reinvesting the profit!
You're a legend man and can only hope in 7 years I'm in the same situation!
Last question from me would be in assuming you never ventured into flipping since buying and holding is the end goal with passive income.
Austin Fruechting i kid you not I was thinking that yesterday while sitting in my car debating on my first deal! I'm going to pull the trigger. Plan on using fha on a 3-4 unit then keeping the ball rolling from there! First putting my self in a living for free situation while cashflowing. Saving the income along with money from my current job then keep reinvesting the profit!
You're a legend man and can only hope in 7 years I'm in the same situation!
Last question from me would be in assuming you never ventured into flipping since buying and holding is the end goal with passive income.
Do it man! Living for free would be a huge jump start! Enjoy life and enjoy the journey. You'll have to make trade-offs along the way with the stuff that really doesn't matter or provide happiness. Think of the end goal when you're tempted to drop money on a "thing". I had a net worth well into seven figures and still drove a car with 190,000 miles. I loved the cadillac CTS-V coupe, and could have easily bought it. But that would have slowed down the real estate and wasn't worth the tradeoff.
However, I did drop money (and sometimes a lot of money!) on experiences because those actually did provide life satisfaction. Spend wisely, budget, and save to move quickly... but still experience life (again, because what if die before you make it!).
@Austin Fruechting Thanks for explaining your financing structure. I'm still learning about different financing options so I'm hoping you can clarify something that's probably pretty basic for me. When you are doing a deal if the bank will give you 70% LTV so long as you put 10% down...where does the other 20% come from?
Is it that you only buy properties that you know will appraise for 20% higher?