The Crazy Journey to My First 8 Rentals: Numbers, Pics & Lessons (All the Nitty Gritty!)

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I wrote my first BiggerPockets blog post not too long ago. It was hard to write, scary to publish, and an awesome learning experience. Writing is hard, y’all. Maybe the rest of you poop out words like a baby on prune juice, but for me, it’s a constant battle between daring to be who I am and trying to be who I think I should. And man, sometimes the battle is brutal. So thanks for standing by and staying tuned while I regrouped and patched up the troops.

In my first article, I wrote about how I was able to buy seven rentals while jobless, pregnant, and new to the area. I chose to focus on mindset, as I strongly believe that regardless of our past, or social status, we all have one thing in common. We cannot control all that happens to us, but we can control our thoughts and actions. I got some awesome feedback from you wanting to hear more details, so that’s what I plan on sharing with this article. Concrete stuff, the nitty gritty.

But I just can’t do that without telling you shortly about my mom first.

To Get Where You Want to Go, You Must First Be Who You Need to Be

My mom was paralyzed when I was a toddler. I’m the third child of four, and we were all under the age of six when it happened. Long story short: She had neurosurgery that failed and led to her being bed-ridden for 14 years. She couldn’t sit or stand long even with support. On a good day, she could walk a couple hundred yards with a walker. She could basically only lie down on one side if the bed was completely still. Sometimes the ambulance took her to the hospital to give her stronger IV meds for the excruciating nerve pain.

She couldn’t sit, so wheelchairs were kind of non-helpful. And normal car rides were out of the picture. She could have just stayed home—and rightfully so. But instead of saying, “I can’t,” she would try to think of ways to get around her disability by asking, “How can I?” So, for instance, she crawled up in the trunk of our Volvo 245 wagon and lied there on a mattress. That way, she could travel by car a few miles. Imagine the look on people’s faces when she crawled out of the trunk like a dog.

She also had my dad saw up a tiny mattress. It was thick enough that she could lie on it on the floor on her side without dying of pain, but small enough that she could haul it under her arm while walking with the walker. When the pain got too intense, she’d just lie down on the mattress on the floor wherever she was.

I tell you all this because without seeing my mom overcome these experiences and challenges, I wouldn’t be who I am today. And who I am is what determines what I do. I’ve also realized that who I was got me where I am today, but it may not get me where I want to go in the future. That’s why self-development is one of my key focus areas in real estate investing and life.

“If you want to have more success, you need to become more.” —Jim Rohn

The Warm Up

My first article actually didn’t account for my first real estate investing deal because it happened when I was still living the blissful DINK (Double Income, No Kids) life, bathing in champagne and sleeping on silk sheets until I was woken up by birds chirping Disney tunes after a well-rested night.

Not quite, but that’s what I imagine now when thinking back to the pre-kid glory days. I technically started real estate investing way before my first deal, about 12 years ago when I first started reading about it. I thought you should all know that.

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” —Abraham Lincoln

Rental #1: Popping the Cherry

Before we took a quantum leap of faith and moved for a slower-paced, family-focused life in Finland, I had a great job in Silicon Valley, California. My company offered new employees a free financial advisor consultation. He was (and is) what I like to call the bomb-diggity. He was a real estate investor himself and recommended it to us. So five minutes later, we bought our first deal in California and made a gazillion dollars. Not.

We had been working our buns off saving money for the past 10 years to buy our own home. But in Northern California, it would probably have taken us another 1,000 years or so to afford a closet to live in. So instead of buying ourselves a home, we rented a small apartment and focused on finding a rental property out-of-state. It took us about three years and five lost deals. But finally, thanks to trusting people who were smarter than us (and had results to show for it), we purchased a 3-bed/2-bath single family home in Fort Collins, Colorado.

Those people were Josh, our financial advisor and Gregg, an amazing local Fort Collins real estate agent Josh recommended. (Hi, Gregg, we love you. If you read this, can you please move to Finland so we can hang?) We bought the house sight-unseen in 2015 and still own it today. It’s managed by a great property management company recommended to us by Gregg.

The Nitty Gritty

• What: 3-bed/2-bath single family house in Fort Collins, Colorado
• Purchase Price: $285K
• Financing: Conventional 30-year fixed rate bank loan at 5.125%
• Current Valuation: $375K
• Rent: $1,850

I know this isn’t one of the “best deals” out there. But it got us started.

Death by Comparison

I realize I might lose some of you here thinking that this was easy for us. That you couldn’t do it because we had this or that and you don’t. I’ve noticed that comparing ourselves to others can make us not even try. And it’s such a shame, because chances are that the people you are comparing yourself to were in the same situation or worse than you a while back.

You should know that I didn’t always have a fancy-schmansy Silicon Valley job. In fact, my first full-time job was at a sewer plant. And my husband didn’t quite grow up with a silver spoon in his mouth as the fifth child in a family of 10 kids. For instance, he worked three jobs on the side of his studies.

Perhaps that gives you some perspective. But what I truly wish is that you find it irrelevant. Because I’m not running your race, you are. But maybe through telling how I have run mine, it can help you run yours, including whatever hurdles it may present. Don’t let your mindset be one of the hurdles.

“The only person you should try to be better than is the person you were yesterday” —Tony Robbins

Rental #2: First Deal in Finland

About a year after purchasing the Fort Collins rental, we moved to Finland. At this point, I was about four months pregnant and had a eight-month-old baby. And no job. But I had time. I spent the first three months studying the Finnish market and specifics because even though the principles are the same, there are some major differences, especially when it comes to laws, taxation, and financing. I also honed in on my strategy: why I do it, how I do it, and what I do. Beginning with figuring out why I do it led me to some serious soul-searching and self-development.

My first deal in Finland was a studio apartment in a satellite city of Helsinki, a one-hour drive from where we live. I knew it was a good deal because of the market knowledge I had gathered through studying and analyzing deals for three months. The only issue was financing. I didn’t have a job or the money to pay the down payment. But I had a husband and a brother with good jobs and some capital.

So I asked them for $20K, they gave it to me, and I skipped and hopped to the bank. Bollocks. Not quite that easy. You see, they’re both engineers. Practical, logical, pragmatic, analytical beings who both have worked hard for a long time for their jobs, income, and savings. So instead of just asking them for money, I created a business case. I hashed out the deal details in an Excel sheet and showed them what this deal would gain them and how it compared to the stock market.

There’s a huge difference between asking for an investment in a specific deal with a great calculated return that beats the stock market and simply asking for money. That’s how I got the down payment for my second deal. With the down payment, we got a conventional bank loan.

At this point, I was what people in San Francisco would call hella pregnant, with a one-year-old-toddler at home. And I had no idea how to renovate, so I did what no sane person would do: renovate it (mostly) myself. It just took a wee bit (“wee” means a crap ton, right?) longer and nightly YouTube how-to marathons. When I was done three months later, I got it appraised so that I could use the equity as security buying the next one.

The Nitty Gritty

• What: Studio apartment in Järvenpää, Finland
• Purchase Price: 110,000 Euro (approx. $125K USD)
• Financing: Conventional bank loan, adjustable rate mortgage (ARM) interest rate 0.8% (money in Finland is incredibly cheap right now, but the market is also very hot)
• Renovation Cost: 5,000 Euro (approx. $5,700 USD)
• Renovation Duration: 3 months (I wasn’t the quickest as a total newbie, preggo renovator—limber like a walrus)
• After Repair Value (ARV): 130,000 Euro (approx. $148K USD)
• Equity Increase: 15,000 Euro (approx. $17K USD—not a bad pay for a stay-at-home-mom)
• Rent: 690 Euro (approx. $785 USD)

Time, Knowledge, or Money

There’s a common misconception that you need money to be able to begin investing in real estate. It’s true that at some point, money will be required to change hands for a deal to be made. And if you do have money, you can buy somebody’s time and knowledge. But that doesn’t mean that you can’t get started without it.

With time, you can gather knowledge, and with knowledge, you can attract money with a great deal, like I did. Some luck was involved in buying it, but I wouldn’t have been ready for the opportunity without the preparation of gathering the knowledge, running the numbers, and following the market like an obsessed hawk.

 “Luck is what happens when opportunity meets preparation” —Seneca

Rental #3: The Beauty of BRRRR (Buy, Rehab, Rent, Refinance, Repeat)

By doing the renovations mostly myself on our first rental in Finland, we were able to keep the cost down and free up a nice chunk of equity with the new appraisal. In Finland, the appraisal, taxation, and refinancing process and rules are a bit different, but the principle is the same. The gist of it, of course, being to renovate it to increase the market value with more than you put into it. Simple, but not always easy.

Instead of pulling the equity that freed up in the previous deal out, I used it as security to buy the next one. This way, the gain we made was tax deferred as opposed to needing to pay taxes on it right away had we sold it, for instance. This strategy also enabled me to buy the next one more quickly, as we didn’t need to have as much cash for the down payment.

The Nitty Gritty

• What: Studio apartment in Turku, Finland
• Purchase Price: 91,000 Euro (approx. $104K USD)
• Financing: Conventional bank loan using the freed up equity from the previous deal as additional security to decrease the down payment amount
• Renovation Cost: 2,500 Euro (approx. $2,800 USD)
• Renovation Duration: One month (here we got some help from a contractor who knew what he was doing and had less baby in his belly)
• After Repair Value (ARV): 130,000 Euro (approx. $148K USD)
• Equity Increase: 36,500 Euro (approx. $42K USD)
• Rent: 520 Euro (approx. $590 USD—the rents are lower in this city, but the equity increase made us a great return on our investment)

Do What Others Don’t

The market we’re in in Finland is pretty hot. Most deals are not found; they are made. What I mean by that is you need to do something different than others to get the deal.

When submitting an offer in Finland, you send a short email to the seller’s agent (if buying from the open market, comparable to the MLS). Most offers, if not all, simply say the offered amount, a deadline, and potential contingencies. Instead of doing just that, which is totally fine of course, I add a bit more information.

I was buying it with my brother, who was on paternity leave with his baby at the time, and I was home with our babies. So I told them about us, and what we planned to do with the apartment. I shared our genuine love for the city we both were born in and how we wanted to bring the apartment back to its mid-century glory days and make it a great home for someone. Turned out it was a couple of siblings, a brother and a sister, who were selling the apartment. I’m pretty sure our bid was not the highest of the bunch, but our bid gave them something else they valued, and we got the deal. Behind all deals, in the end, are people.

“I follow three rules: Do the right thing, do the best you can, and always show people you care.” —Lou Holtz

Rental #4 and #5: My Biggest Mistake

At this point, I had popped out the second baby (that’s how you do it, by the way—just pop it, like a Pringle), and our first born wild-ling went to kindergarten part-time. During this time, since I didn’t have a job, I started my own consulting service business (a.k.a. my “typing on the computer while nursing” business).

I didn’t know how any of that worked in Finland. So, when our baby slept, I figured it out as I went, through reading and asking. I didn’t have any clients when I set it up. But one day, out of the blue, I was contacted by a former boss of mine whom I worked with in Stockholm years ago. Her newly founded company needed some help in Finland, and she thought of me. And tada! I had my first client. That, plus the rental income (in Finland, the banks acknowledge all rental income as income right away), enabled me to get more conventional bank loan.

But that wasn’t enough to cover the down payment for the next two apartments I wanted to buy—not even when using the freed up equity from the previous deal. My brother was out of the picture for these two new construction studio apartments, and my husband tapped out, so I needed to figure out another way. So I dipped into my 401K savings. Not the smart way.

The Nitty Gritty

• What: Two new construction studio apartments in Järvenpää, Finland
• Purchase Price: 154,400 Euro (approx. $175K USD) + 155,900 Euro (approx. $177K USD)
• Financing: Typically when buying new construction co-op apartments in Finland, 70% of the loan stays with the co-op, and you only have to pay 30% of the purchase price up front (the co-op loan you pay off with a monthly fee as part of your HOA, which with some constraints is tax deductible). So that 70% co-op loan portion didn’t, at the time, hit our overall debt-to-income ratio. That has now changed as the banks rightfully realized the risk in that. Utilizing some of the previous deals’ equity increases as security, I was able to get some additional conventional bank loan to cover a part of my 30% portion of the price. The rest I got from an early 401K withdrawal.
• Renovation Cost: 0 Euro
• Current Evaluation: 154,400 euro (approx. $175K USD) + 155,900 euro (approx. $177K USD)
• Equity Increase: 0 Euro
• Rent: 645 Euro*2 (approx. $735 USD*2)

Make Mistakes and Learn From Them

I bought these apartments with a clear intention: to decrease my overall risk since all my other rentals were old. These brand new apartments would most likely be free of costly near-future repairs. I also bought them as a means of tax optimization. But my drive to meet my goal for the year (buying four apartments) made me jump into it without having all the information and understanding of what to look out for when buying new construction apartments.

So, even with my intentions fulfilled, I ended up paying too much for them. And once the building was finished, the market was flooded with rentals because a major institutional investor had bought a big portion of the building. I now know this is one of the major things to look out for when buying new construction co-op apartments.

I also made some constrained assumption about making an early 401K withdrawal without checking and confirming they were true. For instance, I thought I would be able to pay low or no taxes on it since we live in Finland and I barely have any income. Not true. Asking any CPA would have confirmed that.

But I was so driven to hit my goal and emotionally decisive on buying these apartments, all the information I found went straight into fueling my confirmation bias. It was a great time for self-reflection and growth. It made me revisit the way I think about, set, and chase goals. I love that I made these mistakes because of what they taught me, and had I not bought them, we wouldn’t have met the amazing tenants that live in them.

“I never lose. I either win or learn.” —Nelson Mandela

Rental #6: Be a Pleasure to Work With  

When this deal hit the market, I jumped. But so did a lot of other people. When I called the listing agent that Friday night, I could hear her stress over the phone. So I paused and asked her how she was doing. She was a bit surprised about the question, but gladly told me. She had gotten bids with ridiculously short deadlines (like two hours), sending her on a wild, unsuccessful goose chase to get ahold of the seller for a response. So I asked her how I could help. We talked about what might be a good deal for the seller, a good deal for me, and a good deal for her. Together, we found that. And I got the deal. People, people, people. Behind every deal are people.

The Nitty Gritty

• What: A 1950 studio apartment in Porvoo, Finland
• Purchase Price: 101,000 Euro (approx. $115K USD)
• Financing: Conventional bank loan using the BRRRR strategy and the incoming cash flow from the previous deals; partnership with my brother
• Renovation cost: 10,500 Euro (approx. $12K USD)
• Renovation Duration: Two months (not preggo anymore, but nursing every six seconds or so)
• After Repair Value (ARV): 128,000 Euro (approx. $145K USD)
• Equity Increase: 16,500 Euro (approx. $19K USD)
• Rent: 670 Euro (approx. $760 USD)

 Things are different in Finland, but people are not. Well, we like to be naked here more. There’s that. But jokes aside, people like to work with people who are easy to work with. Those who bring them value and joy. And those who treat them with respect.

That’s one of my favorite things about real estate. It all comes down to people, encounters, and interactions. This includes interactions with the hardware store register, the bank customer service (I recently found out that the bank rates its customers too), the co-op janitor, and the neighbors (more on that below).

“Do unto others as you would have them do unto you.” —Matthew 7:42

Rental #7: Doing What It Takes

I’ve always loved the hustle and bustle of cities. The pulse of people nearby. The concrete jungle. So we’ve always lived downtown—until now. Moving from California to Finland enabled us to buy our first home. But buying something downtown would have put us up to our eyeballs in debt. So instead, we moved to the outskirts of the ‘burb of the ‘burb… of the ‘burb. I mean, we have rabbits and deer skipping by our backyard. This helped us keep our debt-to-income ratio in check. But it was a hard decision at the time. Without a clear, passionate “why,” I wouldn’t have been able or willing to do it. Had we bought something bigger or closer to the city, we wouldn’t have been able to invest in these real estate deals.

But we’ve also made smaller decisions to optimize our ability to invest. For instance, I buy all my and our kids clothes secondhand. Instead of buying a second car, I’ve borrowed one and use public transportation whenever I can (which is free here when traveling with a kid in a stroller). Thanks to all these decisions combined with the snowball effect of the previous deals, income from my consulting services, and a bonus, we were able to buy this deal faster than expected.

I have a good life, and I realize my decisions may not be as hard as somebody else’s. Not having a second car is such a first world problem. But my point is I had choices. Once I had a clear goal set, the question I had to ask myself was, “Am I’m willing to do what it takes?”

The Nitty Gritty

• What: A 1934 studio apartment in Helsinki, Finland
• Purchase Price: 143,000 Euro (approx. $163K USD)
• Financing: Conventional bank loan using the BRRRR strategy and the incoming cash flow from the previous deals; partnership with my brother and husband.
• Renovation Cost: None so far. We bought it with a tenant who we love, who likes the apartment as is so we’re holding on renovating it. That allowed us to roll in the renovation money into the next deal instead.
• Current Evaluation: 143,000 Euro (approx. $163K USD)
• Equity Increase: We haven’t reappraised it yet since we haven’t renovated it yet. Similar, but renovated apartments in the area sell for around 180,000-200,000 Euro (approx. $205K-228K USD)

“If you want something you’ve never had, you must be willing to do something you’ve never done” —Thomas Jeferson

Rental #8: The Abundance Mindset

One of the main things I learned about when living and working in Silicon Valley was the way people thought about others’ success. In the Nordics, people have a tendency to have a scarcity mindset. If somebody succeeds, that means less chance for you to find success.

In the U.S., and Silicon Valley in particular, it was the opposite. If somebody drove a nice car, people would ask them what they did and think, “If they they did it, so can I.” There was also a different level of openness and willingness to share one’s learnings with others—a mindset of abundance. Rarely do people here even tell others they are real estate investors because they fear those people will steal their deals, or God forbid, think they are successful or rich.

When I was renovating this last rental apartment with Stella, 12 months old at the time, I started talking to a neighbor at the local lunch restaurant. Channeling my inner Nor-Cal, I bravely told him I was a real estate investor currently renovating an apartment in the nearby building. Turned out he was one too, and he ended up helping me rip out one of the old kitchen cabinets I had been struggling with. He also gave me a ton of tips. And it doesn’t end there. His brother-in-law runs one of Finland’s best wholesaling companies that I now have the pleasure of knowing about thanks to that encounter over fish soup. People, people, people. Behind everything is people. Just people.

The Nitty Gritty:

• What? A 1970 top floor studio apartment in Espoo, Finland
• Purchase Price: 134,000 Euro (approx. $152K USD)
• Financing: Conventional bank loan using the BRRRR strategy and the incoming cash flow from the previous deals; partnership with my brother and husband.
• Renovation Cost: 7,000 Euro (approx. $8K USD—the first time we rebuilt the entire kitchen. Some major, costly, learnings that chipped away at the budget, and taught us so many valuable lessons. Totally worth it.)
• Renovation Duration: Three months
• After Repair Value (ARV): 155,000 Euro (approx. $176K USD)
• Equity Increase: 14,000 Euro (approx. $16K USD)

“If you approach the ocean with a cup, you can only take away a cupful. If you approach it with a bucket, you can take a way a bucketful.” —Ramana Raharshi

Summary

On the BiggerPockets Podcast, Brandon Turner asks the guests what sets apart successful real estate investors from those who fail or never get started. I think it’s different things at different times. But first, I’d like to take a second and define success. For me, it goes beyond money or number of doors. At my death bed, I would count my life successful if I’ve led a life true to myself, done meaningful work where I’ve been able to help others, had interactions I’m proud of, been brave doing things despite being scared, and ultimately, been a person my kids are proud of.

Through real estate investing, I’m able to work on realizing all those things, and that gives me an incredible sense of purpose. That purpose is what fuels me. An engine needs different parts to work, and in my real estate investing machine, those parts are things such as grit, consistency and focus, loving the process, willingness to learn, accountability, vulnerability, having a great team and support at home and from friends, asking for help, and spending time with people smarter than me to get challenged and questioned. But even with all these parts, the engine wouldn’t work without the fuel.

Call to Action

Who do you need to be to get where you want to go? What are the different parts of your engine that can help you get there, and do you have enough and the right kind of fuel to keep the machine going? If there’s a hiccup in your engine, could you fix it? And are you willing to do what it takes to fix it?

What’s one thing you can do today to get closer to the life you want?

Leave all your questions and comments below!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.