One Year Later - 10 units and full time investor

Real Estate Deal Analysis & Advice
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One Year Later - 10 units and full time investor

Ethan Lee
Jacksonville, FL · Member since 2016 · 76 posts · 130 votes

It was about this time last year that I discovered Bigger Pockets and found what I was looking for - a way to escape the boring, restrictive 9-5 life while doing something enjoyable and generating wealth. I caught the real estate investing bug and started listening to podcasts and reading articles for hours a day.

I kept hearing experienced investors say to jump in, so I did just that a few months later. By August, I had closed on a quad and was officially a real estate investor. Around that time, I partnered with a friend who was also interested in REI. By my 24th birthday at the beginning of this year, we collectively owned 10 units / 4 properties. We've done a house hack condo, a BRRRR triplex, and duplex and quad rentals.

This has given me the freedom to go into real estate investing full time while my business partner is sticking it out at his job to help us qualify for mortgages. This month, we've put a live-in flip and a BRRRR quad under contract, and we have another duplex in verbal negotiations that looks very promising.

It's easy to get frustrated when progress seems slow, but rewarding when I can look back at my first year in real estate and see we made it to double digit doors while earning enough to go into real estate investing full time. I can't thank BP enough for the advice and wealth of information. We are currently looking for connections in Jacksonville, FL, Greenville, SC, and southern Delaware to grow our business if anyone is interested. Thanks BP!

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Jerry W.Pro Member
Moderator
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
9y

Congratulations @Ethan Lee.  You have done very well.  I have been investing part time for almost 20 years and have not been able to leave the day job yet.

@Sam T., welcome to BP. BRRR is a buy, rehab, rent, refinance, repeat. it allows you to keep pulling money out to do rehabs over again. House hack means to live in a property while you rehab it. Often it is your primary residence to take advantage of the no capital gains from the sale of your primary residence for 2 of the last 5 years, but not always. you might start reading up in the education section above, it is loaded with tons of great information. Good luck.

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  • Todd Magin
    Rental Property Investor · Potomac, MD · Member since 2016 · 115 posts · 64 votes
    9y
    Originally posted by @LaMonica Evans:

    I love it!! Im a 24 y/o college grad, stepping my foot into the investment world very soon!

    I do have a solid question for you. Im looking to purchase my first property. Ive been told time and time again from ppl on BP, articles and the like that house hacking a Duplex/Triplex/Quad is a good way to enter into investing. You can house hack and qualify for FHA.

    However, my dilemma is that my RE broker says he doesnt suggest a multi-family but A Sfr for a first investment, following up with Duplexes/Tris/Quads are hard to get rid of and many ppl get stuck or sell for a loss.

    Suggestions?

    Thanks! Keep on inspiring!

    LaMonica, first the "wisdom" I am about to share is parroted from other BP investors, as I am still searching for my first deal, but I am very active on BP and have learned a lot!

    My first question "Does your broker invest in real estate? Is he an investor?" It sounds like he has a single family buyer mindset.  If so, find another broker who actually invests and is more closely aligned with your mindset.  As a new investor, you don't want to be the one that is teaching your agent, but rather the agent needs to be teaching you.  I have already gone down this road.  As soon as I realized I knew more (not much) about investing than they did, I told them that it wasn't going to work out and moved on.

    Next, are you a flipper or a buy and hold investor? If you are a flipper, I would actually agree with your agent that MF homes would be harder to sell on the MLS, because that's not typically where investors get their deals. However, if you are a buy and hold investor, then house hacking a small MF is a tried and true method and your exit strategy is to HOLD the property because it is your cash cow. Many years down the road when you sell (exchange into a bigger property, etc), you can sell to another investor who you have met through networking over the years.

    @Ethan Lee Your story is truly inspiring to all of us newbies!  Keep us posted!!

    2Reply
  • Garmeon Y.
    Accountant · San Francisco, CA · Member since 2016 · 41 posts · 17 votes
    9y

    How would you suggest someone that's going solo that needs to qualify for mortgages by keeping the W2, but finding enough time to find deals, etc.?

    0Reply
  • David Scott
    Investor · Lawrence, KS · Member since 2013 · 15 posts · 9 votes
    9y
    Originally posted by @LaMonica Evans:

    I love it!! Im a 24 y/o college grad, stepping my foot into the investment world very soon!

    I do have a solid question for you. Im looking to purchase my first property. Ive been told time and time again from ppl on BP, articles and the like that house hacking a Duplex/Triplex/Quad is a good way to enter into investing. You can house hack and qualify for FHA.

    However, my dilemma is that my RE broker says he doesnt suggest a multi-family but A Sfr for a first investment, following up with Duplexes/Tris/Quads are hard to get rid of and many ppl get stuck or sell for a loss.

    Suggestions?

    Thanks! Keep on inspiring!

    My first property was a duplex and it has been a great house hacking experience. It gives you a lot of flexibility. I rented out one side and had a roommate in my side. This allowed me to live 100% rent free and save enough cash to do a full renovation on my unit and eventually start renting out part of my unit as an air bnb as well.  I just refinanced and used that money to buy another unit. 

    A SFR would not have given me that experience. Nor would it have allowed me to test the waters as a land lord. I think a duplex is the perfect place to start. Don't let your brokers fears influence your decisions. This is your adventure into real estate and there are many ways to do it. You have to take the path that makes the most sense to you.

    2Reply
  • Tristan Cortez
    Rental Property Investor · San Antonio, TX · Member since 2015 · 272 posts · 50 votes
    9y
    Congrats!! Thanks for sharing you story! Stories like these help keep me motivated. Keep up the good work!
    0Reply
  • Dean Weltman
    Investor · The Colony, TX · Member since 2014 · 192 posts · 66 votes
    9y
    LaMonica Evans Do what's right for you. I don't know anything about your realtor, but most don't do any investing - so first you might want to find a investing realtor. Second, do you want to own a house or an asset? It'll be a lot easier to move to a second property with 4 rented units at your back than the other way around. You've done the research or you wouldn't be looking at multifamily, so don't let this guy talk you down. It's easier once you get started because then you don't have a choice, but to get to work! I wish I'd bought a 4plex for my first few properties... Good luck!!!
    2Reply
  • Rosemarie Ledogar
    Real Estate Broker · Athol, MA · Member since 2013 · 22 posts · 16 votes
    9y
    Great work! Hard work and perseverance definitely pay off! Congratulations!
    0Reply
  • Jailen Holt
    Real Estate Salesperson Licensed · Atlanta, GA · Member since 2016 · 114 posts · 22 votes
    9y
    Congratulations on the growth! I cant wait for the day I can look back and share a similar story
    0Reply
  • Nahid AlipourPro Member
    Rental Property Investor · Irvine, CA · Member since 2015 · 16 posts · 4 votes
    9y

    @Ethan Lee Conrgrad and well done, you just have to jump in and you be rewarded.. @LaMonica Evans, the reason multiplex are good cuz it can off set your expenses while you are living there and learning about landloarding. Always go with your gut feeling IT NEVER LIE.. Your are on the right pat and yes you can get FHA financing if this is your 1st home it doesn't matter if SF or Multi as long as you are also livinh in them.. Good luck to both of you and keep us post it..

    0Reply
  • Ujwal Velagapudi
    Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes
    9y

    @Ethan Lee Congrats! That's a pretty courageous move to quit the job and jump into RE investing full time, especially just a year in. I was able to replace my job's income through my investments last year, but just wasn't able to quit the job because I was worried I wouldn't get approved by lenders as easily. It definitely helps that you have a good balance with your partner, keep growing!

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Mark Cerminaro keep plugging away. If you are reinvesting your rental income plus some savings from your job, it should snowball and acquiring units should happen faster and faster. Plus you'll have more money to set up systems, outsource tasks, and streamline your portfolio. That's my plan anyway!

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    Thanks @Richard McClain! It's been a pleasure sharing my story and responding to comments, the fact that I can inspire others after only a year is so rewarding. I might have to do an update every year or when we hit a major goal or something. Thanks for the suggestion!

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Justin Pera thanks so much! I've only been here for a few weeks and the market makes me excited for sure. Good luck to you too

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    Way to go @Kat Wyninger! Congrats on officially becoming a real estate investor, that's more than a lot of people who have spent time on Bigger Pockets can say. Sounds like you set up a creative deal by closing on two SFH with seller financing. Focus on repairing that credit, education, and saving up money and it will all come together to grow your portfolio!

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @William C. I was thinking that, thanks for coming out and saying it! Sometimes we all need to hear the truth and realize some people will put their own interests before ours. You obviously know your stuff so getting confirmation from you means a lot. I'll definitely keep hustling. And @LaMonica Evans has gotten some great advice so I hope she has the confidence now to execute on a multifamily house hack. 

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Nolan Gray awesome work man, we have a big advantage by finding the power of real estate at a young age and acting on it. So far we've gotten joint mortgages as well as mortgages just in his name, then adding to our LLC operating agreement that we have equal ownership in that property, even though his name is on title. I would only do this with someone you absolutely trust, and some more experienced investors may say this is not the way to do it, but it has worked for us so far.

    Moving forward, it's getting harder to work with conventional mortgages, so we are looking at portfolio lenders as well as big banks that have loan programs designed specifically for real estate investors. It may take a while and some hustle, but you can find banks that will lend on the property based on its cashflow, your credit score, and your experience. They will allow a higher DTI or not look at that at all because they understand you are building a portfolio and have the credit history to maintain it. Rates will be higher, but it's better than not being able to get loans!

    My wife is from the Milwaukee area and I've heard there's a lot of opportunity for investors there! 

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    Thanks @Todd Magin! Great advice on the MF vs SFH, I'm a huge fan of getting a great deal on MF and keeping it until it's time to move to bigger investments.

    0Reply
  • Jay De Guzman
    Real Estate Agent · New York, NY · Member since 2015 · 24 posts · 2 votes
    9y

    Congrats Ethan!!

    1Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Garmeon Y. it all comes down to priorities and a desire to make it happen! My business partner and I got our 10 units while we both still had full time jobs. Devote a few hours when you're not working to educate yourself, look for deals, then do all the paperwork once you have a deal under contract. If you want it bad enough, you'll find time. Sometimes that may involve giving up a hobby for now, going out less, or even giving up a side hustle that brings in money. I am so much closer to many goals in life because of real estate. That just confirms that it was worth giving up free time to make it happen!

    2Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Tristan Cortez thank you!

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    Thanks @Rosemarie Ledogar! Couldn't agree more

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Jailen Holt @Nahid Alipour @Ujwal Velagapudi @Jay De Guzman thank you all!

    0Reply
  • Eugene Beard
    Snellville, GA · Member since 2014 · 110 posts · 30 votes
    9y

    Congratulations @Ethan Lee on leaving the Rat Race! I would love to talk to you about your numbers. AKA How did you do it?!  From what I read you did 10 units in 7 months! thats amazing! I would really like to hear more details on how your doing this!. I am on the same buy and hold path as you are. I was looking to house hack a quad for my first property but I ended up settling for a nice Duplex and still being able to house hack. Now Im looking for my quad. id like to know your numbers  basically how you moved from one to the next so quickly!  How long did you live the frugal lifestyle before having saved up enough to getting the first property?  did you do all conventional on these properties? Sorry if Im too inquisitive Im just very interested!

    Thanks,

    Eugene B.

    1Reply
  • Steve Porcello
    Marshfield, MA · Member since 2016 · 25 posts · 5 votes
    9y

    Congrats, Ethan. Very inspiring!

    0Reply
  • Ethan Lee
    OP
    Jacksonville, FL · Member since 2016 · 76 posts · 130 votes
    9y

    @Eugene Beard thanks, it feels great! I've been frugal all my life and continue to live that lifestyle to reach my goals. For example, despite living in expensive Los Angeles for 1.5 years and having jobs that did not pay much more than minimum wage, my wife and I saved about 35k (half of our gross income) while we were there. We rented a bedroom in a house, packed our lunches every day, rarely ate out for dinner, and started a side business of wedding photography to use our skills and free time to bring in money outside of our 9-5 jobs. We invested in a quad first (closed in August) using about 75% of our savings (we had a nice chunk even before saving 35k from income). That cash flows $1000 per month, so within a few months, we felt safe getting another property. Meanwhile, my business partner found a triplex to BRRRR (October), so we found a private lender (his grandmother) to cover the purchase and we split the rehab cost. In May, we will refinance and should get all of our money back out.

    In December, we found a duplex, which was not hard to afford with savings from our jobs and income from the quad. My business partner was able to get a cheap condo in there too and house hacks that to have all of his expenses paid. Now, my bare minimum expenses are paid through cash flow and I rebuilt my savings a little bit before quitting my job at the end of 2017. We still live frugally because we want to keep saving money to buy more properties. We did all conventional financing as it was not hard to qualify with my job and my business partner's fairly high paying job.

    2Reply
  • Eric Armstrong
    Investor · Wilmington, DE · Member since 2013 · 394 posts · 123 votes
    9y

    @Ethan Lee- Try delreia.com for funding in DE.

    0Reply
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