I Took the Leap (Gulp)
I did it! I quit! I no longer spend my days working towards someone else's dream! I own my time and my future. I'm excited and terrified. My wife is just terrified. I'm a pretty humble person in real life, and I haven't seen anyone socially in 9 months, so I haven't had a chance to express my accomplishment to anyone. Besides, if I can't flaunt my accomplishment a little among my peers, then I won't get to flaunt it at all. So here's how and why I did it now.
My transition away from 9-5 has been a long time coming; 12 years if I count from the first house I bought as an investment, 6 years if I count from my choice to change to a job that would help me leave the rat race. But despite all the planning and experience filling my sails, pointing my bow away from land and towards the horizon has been one of the hardest things I've ever done.
A little background: I'm 36, married with a 4 year old son who has high medical bills, and a little lady due in March 2021. I make a good salary as an architect designing large apartment complexes for national developers. My wife makes a pretty good salary, but not enough to sustain our current lifestyle on it's own (not lavish, but not bare bones either). We have 6 doors that cash flow but not enough to make up the difference between her salary and what we spend. So why did I make the leap now?
Over the last 6 months, I found the final member of my team... a contractor I can trust. I've been toying with fix and flips and BRRRR's for 12 years and out of 12 projects or so, I have re-used a contractor once. I was never sure if I just had high standards because of my architecture background, or if indeed, my contractors were performing low quality work. One project a year was about all the energy I had time for when I was babysitting grown men and my 9-5 was really more like 7-6. But in March of 2020, I bought a place to BRRRR and the contractor I hired completed renovated the property on time and pretty close to budget. He had his crew there every day. He was decisive when necessary, but asked questions when it mattered. I refinanced quickly, pulled all but $15K out of the property and cash flow $400/mo.
Awesome! That was easy. Let's try that again!
I bought another place in June and we flipped the house on time and close to budget. Quality was a little lower than before, but nothing we couldn't overcome together.
2 deals in 6 months? Could this be it? Let's keep this ball rolling!
Found another property with great potential in an up and coming area of Denver Metro that I am really hot on. Big project though... "Hey contractor, think you can take this one on? Yes? Done." Closed in September. Start 16 week reno (almost done).
Contractor says he has 2 crews... hmmm.
Back in June, my realtor brought me an off market property and I negotiated an owner carry with the seller as long as he got his dead-beat daughter out of the property. Since I was in no hurry, as we were already working on a project, I was patient until the daughter left. Took 4 months but we closed in October. Bam, 2 projects at once. Start 12 week reno (almost done).
How long can I keep doing this and still work my 9-5?
Turns out, not long. In October after I closed the second deal, I decided to negotiate a 3 month leave of absence to give me time stretch my wings a bit. This is where I pointed my bow to the horizon but made sure I could still see land. Once I did though, the wind starting to blow stronger and the boat started building speed. My realtor brings me another off market deal. Easy reno with $50K profit... but all my money is allotted for at this point on the 2 projects above. I can't take it on, can I?
Remember Rich Dad, Poor Dad and start thinking, how can I afford this?
Find and negotiate OPM loan to make up difference between hard money loan and required down payment / renovation cost. And just like that, I have the next project in the queue.
So here we are in December, I have 2 projects finishing up their renovation and planning to go to market in mid January on both of them. Each of those projects are projected to make $100K+! The next project is a 5 week renovation, so by March of 2021, I'll have tripled my annual salary from my 9-5. I can no longer see the horizon, but my sails are full and the ocean seems to be smooth ahead. And if you say there's a storm coming, I'll say bring it on.
My goal is for 10 projects in 2021 and to keep 2-3 of them that make the most sense as BRRRs.
As I said in my opening paragraph, I'm extremely excited but also terrified. My wife more so. But, I made the leap, trusting the process and myself. Whoop!
Bigger Pockets has been invaluable along the way. And now that I have a bit more time, I'm looking forward to diving into the community further and get to know some of you better.
Cheers to a successful 2020, despite the pandemic, and an even better 2021.
~Steve