I started investing, you can too!

The goal today is to give a topical overview of my journey. It starts something like this, I fell in love with real estate in 2006 when I was deployed to Iraq. It was mostly because the people a decade ahead of me in life were talking about collecting houses. I was intrigued by real estate and decided to sign up for a real estate licensing course for California in 2007. I completed the course but my undiscovered passion was overcome by my choice to follow another calling. I committed to continuing my career in the Marine Corps. This led me down a path that required a commitment so intense there wasn’t much room for real estate investing. I did however read Rich Dad Poor Dad in the summer of 2008 during my cross-country drive from California to Virginia. Wow! Talk about a growth mindset. That seed was planted and would have a delayed growth.

I spent the next decade focusing on my career in the military striving for success at every level. I love the purpose the military provides. What I also realized is I love the journey. Achieving success was great but what I really loved was the grind, the growth, and the relationships along the journey. The experience was almost always more rewarding than the accolades. During this time, I was selected to go to college and receive a commission. Although I was primarily focused on my military career, I had another touch point with real estate. In 2011, as I was moving to attend the University of Michigan’s NROTC program, I wanted to finally “collect” a house. We put an offer in on a short sale at the asking price of $99,000. We didn’t really have any money and we were going to take advantage of the VA loan. The only problem was, the short sale needed some work. We invested the little bit of money we had to get the house up to code for the VA. Unfortunately, in the end we never closed. The selling agent was dishonest and the relationships weren’t right. That same house sold for $240,000 a few years ago. It was not meant to be at this point.

Finally, in 2017 I was committed to buying my first property. I had orders to Virginia once again. I knew we would live in it and turn it into an “investment property” once we left. At this point, I had committed myself to being a lifelong learner. The problem from a real estate perspective was I spent the majority of the last decade studying and reading about history, leadership, international relations, and the military. As a result, I was buying a house for my family without understanding how to buy an investment. The reality was, my wife was emotionally invested in how this house would suit our family even though we’d only be in the house for a couple of years. We were going to have our second child while in this house and it was important that the house was suitable for our family.

Since buying that house. I obsessively learned personal finance and the math behind real estate investing. Turns out it was not a great investment. You could argue for tax advantages, cash on cash return, debt paydown, etc. but there can’t be an argument if you don’t have a clear vision and strategy. The biggest benefit to buying this property was the experience gained.

Let’s dive into how I educated myself on personal finance and real estate. The learning journey really started in the summer of 2018. I listened to a multitude of podcast, read blogs, and read a bunch of books. I also purchased a course. I did this primarily for my wife so we could be on this journey together. The course cost $997. It’s a really well-structured course with very sound and logical information. What I found was the education is absolutely necessary but it is ineffective without action. Education + Action = Experience & Confidence. I also joined a mastermind group which has been incredible! It’s simple – it’s all about relationships and the mastermind groups fosters this principle.

We also became incredibly intentional about our money. We eliminated nearly all of our debt. The only debt we carry is mortgage and my wife’s car ($6k remaining at 2%) while my car is paid in full. We also developed a savings rate at or over 50% throughout 2019. This basically allows me to generate $30k+ yearly. To be clear, real estate isn’t my only investment vehicle. I also use the Thrift Savings Plan.

A second order effect from listening to all the podcast and reading all the blogs is currency in opportunity. I heard about and followed (via social media) a number of successful people who were on a similar path. This led me to follow others on the journey and connect. Once I found the right business and the right people, I did research on the market and knew this what the right choice for me was. I was clear on my strategy (long term, buy and hold, single family rentals) and my criteria minimums (7% Cap Rate, 10% Cash on Cash return, $250 cash flow, 3bd 2bath, C area). My experience with this company was great! I closed on a property that met my criteria on 11 October 2019. I paid $108,000 for the house. It appraised at $120,000 and has a renter at $1300 per month.

We can certainly go deeper into any of the wide array of topics I’ve covered in my journey but I think we met the intent of giving a topical overview. During the last meeting in my mastermind group, I committed to buying a 4-10 unit in Arkansas. It is amazing to work with incredible people who have a growth mindset and enjoy the journey. My goal is to continue to  post and encourage other people along the financial independence path who are using real estate as one of their vehicles.