@Michael B.
I have the simpleton success story for sure.
Did a flip of my sister's neighbor's house back in 06 during the boom. I found out about the deal at a 4th of july party I was having at my house.
Then I put up the financing for a new construction build with my brother in law. He was doing one at a time because thats all the bank would finance. Unfortunately, he took forever and a day (over a year) to finish it and the market had crashed by the time it was done. That became my first rental.
I had zero intention of becoming a landlord before then. But the more the market went down, the more the rental numbers looked better to me.
I then set a goal of doing 1 house a year for 10 years. 10 houses making $200/mo was as pie in the sky for someone with my background as it gets. I knew nothing about construction. To this day, I can't even change a doorknob, replace a faucet, or install a stick of flooring. :-)
I got my second house as my first true rental investment. Had a problem getting my money back out because lenders wanted nothing to do with cash out refi's during the crash. And thats when I turned to hard money.
I found a HML that would do 100% of the purchase and 100% of the rehab and would even roll in the points and fees into the loan up to 65% LTV. It made finding deals that could hit that number really tough - even during the boost - but it was still doable.
And once I completed that next one, it really started to take the mystery out of investing and, with that financing, it really had me hooked to where I bumped my goal to 3 a year.
I hit that goal like clockwork for 6 years running. It wasn't as easy as you'd think given my HML would only do 2 loans at a time and finding any bank on the planet that would do the refi's back was almost impossible. There were times when I was putting in offers on homes where I didn't even have a financing "spot" to use to buy it.
There was one house where I closed on the refi and the very next day I closed on the purchase. Had the refi taken one day longer, I would have had to walk on the purchase. And there were a couple of deals where I forfeited my EM because of that very thing. Refi's would fall through all the time.....
Then in the beginning of year 7, the financing really opened up. I found two new hard money lenders that would do 100% which gave me more financing spots. And the local banks started opening up again to doing the refi's. I think it helped that about a year or so before buffett came out and said that if he could invest in anything with his own money right now, it would be SFH's. And like the sheep that they are, the banks all of a sudden seemed to realize these loans were actually good again.
But for me, I was able to pick up 7 homes that year. And then I went on a run over the next 3 years of adding just over a house a month. One year I think I hit 17 homes in a year. 2016 ended with a flurry of 6 houses in 4 months. And then the market really hit a wall for me and the areas I work.
In 2017, I didn't get a single deal until September. but I was still able to pick up 5 houses over the last 4 months of 2017. And I got one already in December.
All told, I now own 68 rental properties with one more under contract.
In order to help fund my growth, I've had to cash out a 50k+ 401k one year (yea, thats how little I had saved over the years which is why real estate was huge), I did a blanket loan and pulled out 100k. And I did another 3 or 4 cash out refi's on some of my better equity homes.
All in all though, I own about 10.5 million in real estate. I owe 7 million on that real estate.
I net about 11k per month on the rentals. And I have close to 14k a month in principal paydown.
So even if I were to just be breaking even on my monthly rental income. And even if the houses had zero appreciation - I'd still making just under 170k/year in principal paydown.
10 years - 70 houses. All started with a 43k heloc. No flips once I started buy and hold. Cashing out 50k+ 401k. A couple of significant cash out refi's.
That is my simpleton path to building some real wealth via real estate.
I was always one to put everything back into the business. But real estate was a life changer in that I used 30k to adopt my daughter and spent 7 weeks in the Ukraine to do it. Could have never come up with that much cash and time off work had I not owned those houses. Took some decent vacations but nothing spectacular.
To me, its about having that sense of security that if I lose my job now, I won't lose my house. That was always the driving force in why I wanted to grow so fast.
But the reality of it is that I did what I did because I loved it. I compare it to treasure hunting. Every house I picked up was like finding money on the street. How could I not want to pick up a 150k house for 100k including purchase and rehab? And add another 150 to 175/mo in income doing it?
There were times where I literally felt like I was stealing. :-)
And I still pinch myself every now and then when i think someone like me owns 68 houses. A 43k heloc and no clue what it took/cost to fix anything in a house let alone what it would take to be a landlord. But apparently that was enough.......
