Real Estate Investor · Cebu, Philippines · Member since 2008 · 297 posts · 5 votes
First off I hope this is the correct sub forum (BP is over loaded with sub forums)
I am wondering how many BP members live solely off of their real estate. By this I mean a person who doesn't have a job and isn't living off of a trust or some kind of investment other than real estate.
I know only one person personally who is one hundred percent supported by their rentals. He hasn't had since he was twenty and he is in his seventy's now.
Travis
not sure if I understand your request, but I think a lot of your replies are from folks that are having to flip and work real estate to survive. My story is pretty well known on BP and I actually retired and walked away from having to continue working to survive at an early age.
My timeline is as follows:
1. At 19 (67-69)I went to Brazil to serve a mission for the Mormon Church.
2. At 21 married my sweetheart and tried College.
3. At 22, had a janitorial company and obtained CA real estate license.
4.From age 23 to 29 bought and sold real estate. (lots of real estate!!)
5 At age 29 retired to Nipomo CA owning a lot of real estate and 1.6 million in notes. These were the days of 10-12% interest on notes and HIGH inflation. I was receiving approx 17K per month without leaving my home.
Other than a job as a janitor, and working for a Broker for 2 years, I've never had a job. During the last 34 years, I've continued to dabble in RE with my own properties adding more net worth. I've personally owned over 1000 sfrs and thousands of apts, built 75 spec homes, flipped 30+ homes,and started 2 different property management companies for a couple daughters.
I use 3 different management companies to manage properties and a personal assistant to oversee the managers!
In my spare time, I travel: Have visited 105 countries,47 states (last 3 will be next summer), all the continents and taken 43 cruises. I also spent 6 years as fulltime RVer.
Other than "dabbling" in real estate, I've lived off the income generated and properties owned since 1979. Please count me as the second person you know that has lived completely on my real estate owned and income generated. I'm 63.
It is 4 a.m and I've been up 2 hours. I bruised/broke ribs yesterday and difficult to sleep!
For more info on my RE involvement, check the Meet the Investor section on BP and/or see me in Denver for the BP 1st annual seminar in March. Merry Christmas. Rich
(#1) I've been full time since 2008. I own 10 residential homes and co-owned three multi-family units. I was pushed into full time due to job cut backs(I worked in the oil refining business). I got layed off while they were earning record profits.I have been investing in real estate part time since 1999. I bought a few more properties and started putting deals together.So here I am!
Full time in RE since 2007. Of course, there have been times when the investment side is slow and I've made my bread from contracting... but my feeling is that those times just make me better at flipping, as I'm usually working for (with) other investors.
Full time since 2004. Went full time after I had a few fix-and-flips under my belt and knew that I had enough capital to float enough deals to cover my nut.
I used to live mostly off flip income, but ever-so-slowly my rental profits have started to make a meaningful contribution. I'm now about 30% rental income/70% flip income.
full time for 2 or 3 years now...i don't have much living expenses, so after my first flip where i made a subtantial amount of money, i decided t do it full time...i have enough rentals and apartments to keep me eating and surviving between flips :)
Congratulations to all of you guys.. That is great.
For buy and hold guys can you tell us a little more about your purchases.. Did you put a bunch of cash down or buy them with all cash down? I a m trying to get a clear idea of what works and end exactly how you did it..
James i think that you are the only person who is a buy and hold guy exclusively. I am interested in your story the most if you dont mind
I have been full-time since April of this year. I do only buy and hold properties. I have thought about doing some flips, but keep going back to buy and holds.
Full time since July, 1994. Sold 2 free and clear SFRs to get the down payment for a 27-unit apartment. Manager was supposed to stay on, but retired so became full timer overnight. That was the best thing that ever could happen. Best way to learn something is to get in there and do it. Anything that could go wrong did go wrong so felt we had enough experience that in July 1996 got a second apartment with 43-units. Kept both for about a year and a half and then sold first apartment in January 1998. Failed to close on a 1031 exchange so had to send in a large tax check.
I will tell you that my original plan was to be 100% buy and hold. I was extremely naive about my numbers (hadn't yet heard of the 50% rule) and put loans on most of my properties. I quickly found out that even a little debt can eat large chucks of profit because over time the 50% rule is absolutely true. That's why most of my profit comes from flips.
The reason my rentals have started to meaningfully contribute to my overall cash flow is twofold. First, I concentrated on aggressively paying off loans. I did it "Dave Ramsey style" and attacked one loan at a time, starting with the smallest one first. As I paid one off, I rolled that payment into the next one. It started to snowball from there.
The second contributing factor is that I have begun buying rentals again. This time around the deals are much, much better. I am financing some of the purchases, but I make sure that my P&I is no more than 25% of my gross rents. I have 2 properties that I did not put loans on at all.
My point here is that buy and hold is great as long as you are prudent and realize that the capital required to be a full time buy and hold guy right out of the gate is much greater than being a flip guy. The reason there are so many great buys right now is because so many people over-leveraged (especially landlords in my area) in the mid 2000's.
I am a full-time RE investor and have been since 2006, started in 2004. I started off buying rentals, and then moved to other strategies like land development, spec building, note buying, wholesaling and rehabbing.
I currenlty do rehab flips which is the large majority of my income. The passive income from rentals and notes is a small portion of my income at this point, but I expect it to become a large part in a few years. For now, I will continue to rehab flip for my income (which is a job). I also mix in wholesale deals each year which also adds to my income.
I am getting the feeling that most full time guys are flippers and that the buy and hold portion is just some extra gravy. Do you all believe that this is true? I own two SFH but I need to make up my mind, with the help of you all, witch direction to go in life...
Keep the good stories coming I appreciate your time and insight.
I think what you said is pretty much true. The bottom line is it generally takes quite a few units to cash flow enough for someone to live only on rental income. However, many people are able to make enough profits from flips to do so. Many people do both though, and that is what my plan calls for. I am currently flipping to raise capital to put towards more flips and rental properties. I am looking at purchasing my first rental very soon (eyeing a 4-plex). Both strategies have pros and cons for short and long term goals.
travis i know several people who live only on rentals..they have over 100 units each..do you think they started with 100 units? NO!!! they worked, and took their money and invested it into apartments and homes..and now they get to enjoy the fruits of their labor...just like i take the profits from my flips and invest them into rentals,and as james plans to...it's very difficult to live on a few rentals, especially if you plan to buy more...plus, the bank wants to see additional income until you have a subsantial amount of rentals...however, if you work at it long enough, eventually you can be a buy and hold only guy, as i plan to be in a few years :)
I am currently in college, but I am hoping to go full time into landlording after graduation in a year. I project the yearly gross rents will be about $90k, so that would be $45k with the 50% rule. About $15k in debt service leaves me with $30k annual income, not great, but its enough to live off.
Hey Travis, I flipped many homes back in 2004 to 2008. At that time I only had 2 rentals. My plans was to never be a landlord until the market crashed & I got laid off. Back in 08 the bank I was using stop funding any & all investment deals. I was getting 85%arv to buy&rehab at prime plus 1% for 12 months with one lump payment due at the end of the loan. Needless to say when they cut this program out it hurt my business tremendeously.So I began to buy properties for around $10,000 to $15,000 on average. I am also a license contractor and my wife is a Realtor. Outside of rental income we do renovation work for other investors and property management. Lastly, I also work with other local wholesalers either helping them move a property or finding a money partner to finance the rehab. Because there are so many foreclosures in my city, I am not willing to do a full renovation flip at this time. We have brand new subdivisons with many bank-owned homes that you will be competing with for an owner occupant buyer.You can make just as much buying cheap and selling cheap to a landlord.
Not yet...I will be getting out of the military in Jul and plan on staying part time for 1-2 years before going full time.
Hello,
I was just reading one of your post on how you are in the military and plan on going full time in Real Estate.
Me and my wife are very interested in how you have become so successful while serving. I am a active Duty Soldier stationed in Hawaii. Currently we own 1 property that is being rented and have two under contract as of today.
Any insight, advice, or tips would be greatly appreciated.
Not yet...I will be getting out of the military in Jul and plan on staying part time for 1-2 years before going full time.
Hello,
I was just reading one of your post on how you are in the military and plan on going full time in Real Estate.
Me and my wife are very interested in how you have become so successful while serving. I am a active Duty Soldier stationed in Hawaii. Currently we own 1 property that is being rented and have two under contract as of today.
Any insight, advice, or tips would be greatly appreciated.
Thank you,
Dustin,
I sent you a colleague request. I would be more than happy to share my experiences, plans and tips.
100% full time for more than a decade! No job and just about every dime I make comes from something to do with a house or building other than an occasional car or horse deal I do, LOL!
I am getting the feeling that most full time guys are flippers and that the buy and hold portion is just some extra gravy. Do you all believe that this is true? I own two SFH but I need to make up my mind, with the help of you all, witch direction to go in life...
Keep the good stories coming I appreciate your time and insight.
Travis
I am full time, but I am not only a flipper, I hold free and clear real estate too.
Travis
not sure if I understand your request, but I think a lot of your replies are from folks that are having to flip and work real estate to survive. My story is pretty well known on BP and I actually retired and walked away from having to continue working to survive at an early age.
My timeline is as follows:
1. At 19 (67-69)I went to Brazil to serve a mission for the Mormon Church.
2. At 21 married my sweetheart and tried College.
3. At 22, had a janitorial company and obtained CA real estate license.
4.From age 23 to 29 bought and sold real estate. (lots of real estate!!)
5 At age 29 retired to Nipomo CA owning a lot of real estate and 1.6 million in notes. These were the days of 10-12% interest on notes and HIGH inflation. I was receiving approx 17K per month without leaving my home.
Other than a job as a janitor, and working for a Broker for 2 years, I've never had a job. During the last 34 years, I've continued to dabble in RE with my own properties adding more net worth. I've personally owned over 1000 sfrs and thousands of apts, built 75 spec homes, flipped 30+ homes,and started 2 different property management companies for a couple daughters.
I use 3 different management companies to manage properties and a personal assistant to oversee the managers!
In my spare time, I travel: Have visited 105 countries,47 states (last 3 will be next summer), all the continents and taken 43 cruises. I also spent 6 years as fulltime RVer.
Other than "dabbling" in real estate, I've lived off the income generated and properties owned since 1979. Please count me as the second person you know that has lived completely on my real estate owned and income generated. I'm 63.
It is 4 a.m and I've been up 2 hours. I bruised/broke ribs yesterday and difficult to sleep!
For more info on my RE involvement, check the Meet the Investor section on BP and/or see me in Denver for the BP 1st annual seminar in March. Merry Christmas. Rich
Congrats Rich. You are the real deal and a superstar in my book. 17K back in the day was huge money.
I don't have a "job" and don't rely or live off of RE. My husband has a terrific job. I had a great job until I was 32 and the kid came along. We had 12 rentals at the time and I felt that the combination was enough for my contribution to the household. As it stands, the RE net rents will cover 30% of our pre-retirement income in about 7 yrs. We do, however, have a few very valuable properties where current rents are well below the real value and can be cashed-out for some big $$. So mine is a retirement play (supplemental).
I am always looking for ways to catapult my self. I bought two homes this year and would like to continue to do so.. The problem I have is the 20% and closing costs. I think that this is going to hinder me a lot.
If you have any ideas or thoughts on this please let me know.
Rich - inspiring story. Please don't take the following as an attempt at member-measuring!
After graduating from college with a business degree, I spent several years working in the private sector. I had good jobs and made decent pay at it, but hated having a boss I couldn't walk away from and I REALLY hated sitting in a cube and doing meaningless work.
I voluntarily left that world and entered RE at a pretty darn young age.
I guess what I'm getting at is that I was not 'cornered' into RE, and I am not in RE "to survive." I made a very conscience decision to enter into RE and have repeatedly chosen to stay in RE despite having received some rather lucrative offers in other industries.
Since I left my last corporate job, I've obtained 2 professional licenses, one of which required a heck of a lot of aggravation to lay hands on. I had no real background in construction (I was a business and comp. sci major with a concentration in econ.) and didn't really know which end of the hammer was useful. I can now talk circles around most folks (including 99% of investors) regarding the technical details of renovation and construction.
RE is the only industry I've been involved in that never stops fascinating me. The opportunities for education and improvement are literally never-ending, with constant opportunity for challenge and triumph.
I've run into investors that are more in the business of making money than they are in the business of creating beautiful, functional spaces to live and work in. I am the opposite. Maybe it's a function of me being a tremendous nerd, but for me the creative aspect of this business is probably one of the best parts. I can take an absolute hole in the ground and turn it into a spectacular place to be, and make ridiculous piles of money doing it.
Bottom line? I'm here because this is, in my opinion, hands-down, the best job in the world... never-ending possibilities and never-ending opportunities for reward.