Financial Independence Lifestyle: Before and After
Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes
Financial Independence Lifestyle: Before and After
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
9yI left my corporate job 2.5 years ago to manage our portfolio. I ended up getting really bored and started two new businesses within the first 6 months of being "retired"
So I still work, but being self employed allows me a ton of freedom. Some weeks I work 20 hours, sometimes it's 80 hours. I go to the gym, get groceries, run errands during the day. If I didn't sleep well, I take a nap in the middle of the day. I don't set my alarm anymore and wake up when my body feels like it.
Travel was also a big deal for me, so I take off about 6-8 weeks a year to travel (This year was a 35 day trip to southern Europe!). My rental income covers all of my monthly costs, and the ability to maintain the lifestyle I was used to. It doesn't cover an extravagant travel budget, but the business I started after covers that.
Second City Real Estate4.821 Reviews
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- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes9y
@Christian Hutchinson I would say you are partially there. If you have the freedom to take a job for half the pay and still live the same lifestyle, you are very close to your goal. A lot of people (including me) would pay a heavy price for that freedom!
Originally posted by @Jessie Niu:
@Andrey Y., read Grant Cardone's 10x Rules, not everyone wants to be average.
You're must be talking to someone else. Where in this thread did I mention anything BUT living an extraordinary and different life? Run along now :)
- Investor · Pueblo West, CO · Member since 2014 · 310 posts · 213 votes9y
Originally posted by @Patrick Allen:
@Jerry Poon It's something I've been working on for a few months and has kinda come in pieces.
One point of clarification is that when I say sabbatical I really mean semi-retirement. My work in coaching can be done part time for those who have the financial backing of passive income or side hustles. Meanwhile working as a Realtor is nearly 100% entrepreneurship, and entrepreneurs can absolutely decide how hard they want to work and how much they want to make.
I live a pretty low cost life in a city with pretty low cost of living. If I didn't have a mortgage or if my mortgage was being covered by house-hacking I think I could make this work on $1500 a month. For me that might mean I make $700 a month (call it $800 for tax purposes) working only with the 40-60% of my athletes whom I enjoy working with the most and $800 a month in positive cash flow. ~10 hours a week could sustain my coaching workload and another 10-20 hours a week working in the realm of real estate as a Realtor/Investor (leveraging the 80% rule of course) would free up enough time to train and sleep as much as I'd need. And any money I make through real estate transactions just get funneled into more real estate or 401k contributions.
World Class food is a bit of a stretch ;-) The rules of sports nutrition are not complicated: heavy carbohydrate intake from whole foods, plenty of fluids, lean protein and healthy fats. Scale calories with activity level. Semi-retirement just means I can dedicate more time to tasks which help my recovery, like making food at home and buying wholesale. Massage isn't any more expensive than beers with the fellas; it's just the priority you place on it.
The crazy part is although I've only been a real estate agent for about a month I'm thinking I should be able to do this in 12 months. I mean, why not?
Are your training techniques based on research in the health sciences, from books or just your own ideas?
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes9y
@Chris H. I feel the same way about cars. Mine is 15 years old. Why would I "invest" in something that I only use for maybe 10 hours a week? Kind of off topic, but car ownership is on its way out. With Uber on the rise and automated cars close to completion of development, people will be able to rent/lease cars for only when they need it. What do you think that luxury of flying weekly would cost you? I'd imagine $500+ for the flight and $100+ for the meal. So annually you'll need about $30k for this alone.
@Albert Bui Thanks for sharing your organization of FIRE. What annual income POST taxes do you think would cover the upper level for you? How long do you think until you'll get there? Which level are you at now?
Originally posted by @David Zheng:
@Jerry Poon
I started investing in Dec. 2015 with buy and holds
I invest in the Midwest.$9.5K/month CASHFLOW in two years? That's beast mode right there. Good for you. Do you self-manage, do turnkey, SFRs, apartment buildings? What's your story? Very inspiring.
- Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes9y
Originally posted by @Jerry Poon:
@Chris H. I feel the same way about cars. Mine is 15 years old. Why would I "invest" in something that I only use for maybe 10 hours a week? Kind of off topic, but car ownership is on its way out. With Uber on the rise and automated cars close to completion of development, people will be able to rent/lease cars for only when they need it. What do you think that luxury of flying weekly would cost you? I'd imagine $500+ for the flight and $100+ for the meal. So annually you'll need about $30k for this alone.
@Albert Bui Thanks for sharing your organization of FIRE. What annual income POST taxes do you think would cover the upper level for you? How long do you think until you'll get there? Which level are you at now?
I would break my anticipated costs, reserves, and funding for hobbies, misc, and further investment growth into a monthly figure and want to reach 5x that amount per month from banker speak it would sound like 5x debt coverage ratio.
So it's a multiplier rather than being a number like most other goals you may see on BP (10k a month etc).
The actual cost of lifestyle is a lot lower than this monthly figure before being 5x'ed because there's reserves and other funds built into that like rehab funding for contractors, materials, set-asides to buy more units deals and multifamily and etc then this figure is 5x'ed to ensure there is enough margin to weather the ups and downs.
@David Zheng @Jerry Poon @Brie Schmidt
Hello all,
You seem well on your way to FI, Love the stories and the passion on buying rental properties.
I am in between your situations, not new to the game, but not confident enough that I can do this full time yet.
I currently have 20 doors/units under ownership that is spinning off 6.5K in free cash flow monthly after expenses and mortgage. But I have a kid, and hopefully and expanding family so I don't want to leave the safety of the 9-5 yet. I have pretty much replaced my 9-5 income, but also have hit the dreaded what now situation that we all face when we hit this cross roads.
Few questions:
1) When did you all decide it was the right time to leave the 9-5.
2) How did you get to the next level as I am dealing currently with SFH and small multi-plexes, but want to get involved with more portfolio level deals.
3) How did you guys find reputable wholesellers, as I am currently buying most of my properties off of MLS or through my real estate broker networks (but as you know most of the meat on the bones have been picked on MLS deals)
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes9y
@Albert Bui So for simplicity purposes, let's say calculated $5k/month to cover all your living/entertainment/investments costs. Your 5x would mean you'd need $25k/month (post taxes?) to be comfortable?
- Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes9y
Originally posted by @Jerry Poon:
@Albert Bui So for simplicity purposes, let's say calculated $5k/month to cover all your living/entertainment/investments costs. Your 5x would mean you'd need $25k/month (post taxes?) to be comfortable?
Yeah that is right it's a bit more than comfortable in my opinion but it's what I think would be self sustaining.
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes9y
@Drew Pak What market are you in? $6.5k/month is a pretty good number for 20 units.
1) I am not there yet, but I will revisit that question once I have my 9-5 salary completely covered in passive income. But I do not have a kid, so that happens, I will probably have to massively rethink things. But it seems like a general feeling I am getting from responses in this thread is that you're probably further along than you think. Meaning your lifestyle is cheaper to sustain via real estate than people think it is.
2) I am still on the SFH level.
3) I am dealing with this same problem. I find properties through my property manager, who finds them through a combination of colleagues/MLS.
- Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes9y
Originally posted by @Thomas Hickey:
Brie Schmidt
Brie,
What is your unit mix if you don't mind me asking? Big multi or a lot of small deals ?
They are all 2-6 unit properties
Second City Real Estate4.821 Reviews - Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes9y
1) When did you all decide it was the right time to leave the 9-5.
When my day job got in the way of my investing, I always tried to make sure my investing never got in the way of my day job and then one day the tables turned. I also made sure with our lender that my ability to get loans would not be hurt by me not working, if that was the case I would have stayed longer
2) How did you get to the next level as I am dealing currently with SFH and small multi-plexes, but want to get involved with more portfolio level deals.
I don't think everyone should move past the smaller stuff. I only have 2-6 unit properties, but in the dense urban environments I invest in those properties are prevalent. Tenant class also comes into play, so if the multi-families were only going to get me C/D tenants, I would stick with SFH. I have looked at bigger stuff too, but the expenses are always way higher and the rents are the same, so it is more profitable for me to do a 2-4 unit.
3) How did you guys find reputable wholesellers, as I am currently buying most of my properties off of MLS or through my real estate broker networks (but as you know most of the meat on the bones have been picked on MLS deals)
I don't use wholesalers. Each market is different, in one of them a seller can put it on the MLS and get multiple offers in a week, so why would he ever wholesale it for a discount? Another market is more balanced, where you can still get god stuff on the MLS easily, but when I can't get anything I do a direct marketing campaign with @Jerry Puckett
Second City Real Estate4.821 Reviews - Indianapolis, IN · Member since 2017 · 10 posts · 6 votes9y
@David Zheng David could I pm you ? Would love to pick your brain and see how I can get where you are now. I have the same mindset you have about getting the things we want.
- Rental Property Investor · Friendswood, TX · Member since 2010 · 663 posts · 508 votes9y
Originally posted by @Michael Wagner:
Originally posted by @Jerry Poon:
@Michael Wagner What do you think catalyzed the change in heart from valuing things to valuing time?
As for your storage facility, did you jump into it knowing that you can turn it around? It's pretty ballsy to purchase a losing business and then quit right after.
Hi Jerry, When we bought are facility, we did extensive due diligence to mitigate risk and were relatively certain we would turn it around. We didnt know exactly how but we did identify the primary causes of its poor performance and knew we could address those. It helped that my wife had a job and we didnt have any kids. We also bought a house that cost half as much as the "banks" said we could afford. These things put us in a position to take the plunge.
As for my personal "philosophy" switch, some of it I'm sure comes with normal maturation that happens in your 20's. I also started to notice that buying things felt really good!.....but only for a little while. A fancy car (a used acura TL in my case) can make a young man feel pretty big in the britches for a few months. But inevitably, that guy soon notices the Lexus or Mercedes and his TL no longer shines the way it once did for him. So if things only make you happy for a short while, is there anything that can make you happy long term?...and how much might that cost? So i started down a path of reading and investigating success and happiness material and have been very pleased with my progress in that realm. The funny part is that financially speaking, I'm far richer than I ever was when I focused on making money....of course, not needing to buy cars/houses etc that I cant afford has helped in that arena. Im sure this is more than you bargained for when you inquired but I am very passionate about helping people not climb the "investment ladder" only to realize that it was leaning against the wrong wall! Hence I use any opportunity I can to inject a better is better mentality into my investment talks. More isnt better.....better is better. This isnt to say that theres anything inherently wrong with fancy cars or big houses. If they bring someone lasting happiness, Im not one to judge that....my concern is that few people understand the true "cost" or promising thier future away buying things they cant afford (ie-taking on payments)....and I'll step down from my soap box now. Thanks for listening!
Quote of the year More isnt better.....better is better.
@michael wagner I will be borrowing that one from you, thanks .
- Specialist · Victor, NY · Member since 2013 · 823 posts · 844 votes9y
@Account Closed,
You are more than welcome to borrow and use it. Just so long as you don't give me the credit! I stole it from multiple other sources. The most recent of which is a book called "Lifeonaire". There are threads here on BP about it. ONe of its main tenets is that "better is better" and that you have to intentionally sit down and define what "better" means to you before you can reasonably expect to attain it. Very good stuff!
All the best,
Mike
- 9yKaroline KaonPro MemberInvestor · Queens, NY · Member since 2016 · 64 posts · 22 votes
@Adam Christopher Zaleski Wow! I am so inspired by your story and it definitely gives me the confidence to pursue a career in higher education and real estate investment! I am currently working an adjunct teaching ESOL part time and I am planning to apply to graduate school to become a professor. My motivations for REI are to fund my expenses during graduate, so that I can pursue my degrees without having to worry about finances. But I am glad to know there are others doing what I hope to do!! Thanks for sharing!
@Jerry Poon The lifestyle I have visualized is basically what Adam described earlier. I want to work on a college campus teaching because I want to and not because I have to do it. I also envision a lot more free time to spend cooking/baking and raising a family. For me to consider myself financially independent, I want to make at least 50k a year through rental properties.
- Columbus, OH · Member since 2015 · 210 posts · 80 votes9y
Originally posted by @Andrey Y.:
Originally posted by @Jessie Niu:
@Andrey Y., read Grant Cardone's 10x Rules, not everyone wants to be average.
You're must be talking to someone else. Where in this thread did I mention anything BUT living an extraordinary and different life? Run along now :)
I didn't necessarily refer to living an extraordinary life, i was just talking about being obsessed with what you do like what David Zheng said and was doing. Seeing the world? Traveling etc? Not necessarily for everyone, especially those who tried to focus for now and want to make it big, so-called work-life balance is definitely not everyone's goal and doesn't have to, it can become excuses to be unexceptional.
Read Grant Cardone's books 10xRules and Be Obsessed or Be Average, he explained better than me :) I know this topic can be expanded and discussed further, I am just trying to say that different people have different life goals.
Originally posted by @Jessie Niu:
Originally posted by @Andrey Y.:
Originally posted by @Jessie Niu:
@Andrey Y., read Grant Cardone's 10x Rules, not everyone wants to be average.
You're must be talking to someone else. Where in this thread did I mention anything BUT living an extraordinary and different life? Run along now :)
I didn't necessarily refer to living an extraordinary life, i was just talking about being obsessed with what you do like what David Zheng said and was doing. Seeing the world? Traveling etc? Not necessarily for everyone, especially those who tried to focus for now and want to make it big, so-called work-life balance is definitely not everyone's goal and doesn't have to, it can become excuses to be unexceptional.
Read Grant Cardone's books 10xRules and Be Obsessed or Be Average, he explained better than me :) I know this topic can be expanded and discussed further, I am just trying to say that different people have different life goals.
I've read those books. Nice try :) Agree on everyone having the same goals. Your comment "not everyone wants to be average" made no sense to me. Cheers.
- Residential Real Estate Broker · Paia, HI · Member since 2016 · 479 posts · 311 votes9y
@Chris H Totally for the new car. I'm a realtor and have a beat-up Prius (I hit stuff :(.) I shamelessly drive it to show $2M listings! It makes absolutely no sense to spend $25k on something that's going to cost more to run.
The Tesla I would do, the newer $35k model coming out, but only if I had enough PV to make it pencil.
It is a real game changer when you don't need any more money and you're choosing where to put your energy coming from that frame of mind. I work out, cook, spend time with people who appreciate my time.
Right now I'm really enjoying working with my agents, building their real estate careers.
- Residential Real Estate Broker · Paia, HI · Member since 2016 · 479 posts · 311 votes9y
@drew pak
try the foreclosure auction.
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