How I turned my Primary Residence into 8 units

Many people say not to buy a single-family primary residence because more often than not, that residence will be a liability.  This premise is one of Grant Cardone’s main points of emphasis in his writings and advice. While I never formed a strong stance on the matter, I am going to lay out the benefits I personally experienced from buying a single-family primary residence, and how it has translated into a huge boost to my Real Estate Investing career. 

Background

In 2016, I discovered Bigger Pockets and decided to buy a duplex in the Twin Cities, MN  to start my portfolio off strong. However, After going through 3-4 showings, I quickly realized my price point was unable to buy a duplex that my girlfriend and I would be comfortable living in. 

We shifted plans and decided to buy a 2 bedroom townhome in a nice suburb for $157,000.

My loan officer offered me a 5% Down Payment loan option but I was also able to participate in a first time home buyer down payment assistance program. I was all in on our home for only $1,800 total. So, how did my simple Townhome turn into my current real estate portfolio?

Fast Forward

Two years after I purchased my townhome, my friend and fellow investor suggested looking into taking  a HELOC against it. In those two short years, my townhome had  appreciated around $30,000! 

It took me until 2019 to finally start my investing, 3 years later than my initial plan. But with the HELOC, I was able to purchase 3 units, which I detailed in a previous forum post: https://www.biggerpockets.com/...

In 2020, my now wife and I decided to move back to Grand Rapids, MI where I grew up. I was able to sell my townhome for $210,000. 

I ended up getting a $55,000 check at closing. To reiterate, my $1,800 investment in 2016 was returned 30 fold. 

I now had $55,000 burning a hole in my pocket. Over the past year, with two different partnerships, I was able to purchase five more units in Lansing, MI and currently have a flip in progress in Grand Rapids. 

Conclusion

What I really want to emphasize is that even if Plan A doesn't pan out, move to Plan B. When we could not buy a duplex, we made an economical purchase that ended up really helping us with our Investing plan going forward. 

With any big financial decision, make sure you view everything through the lens of investing. I know not everyone will experience the same level of home appreciation and there was definitely a “luck” factor at play here. However, you can’t benefit from investing if you aren’t participating at all.Don’t be afraid to switch gears! Sometimes Plan B turns out just as well or better than Plan A!