Matt McElravy

I am a novice investor about 6 years into my financial independence journey. My wife and I are house/land hacking our 4th investment property. We live in a home on 5 acres. we've updated the home and our developing the land for self storage. I’ve been a BP member for 5 years now, absorbing everything I can. By day I’m a self-employed IT Contractor. You’ll find me driving up and down I-5 between Portland and Eugene most days in my Prius/work-truck. We have 4 kids, 2 out of high school and 2 we are still raising at home. My Story: In 2005, I married the the love of my life. I was 26 years old and had just been promoted to project manager at the small business IT consulting firm I worked at. We bought our first house right before the wedding, a 3/1 rancher with about 1000 sq. ft. When we returned from our honeymoon, I was told my employer would be closing its doors due to financial trouble. I had a bit of entrepreneurial spirit in me and asked my boss if he would mind if I started a new company and asked our clients to come with me. He was done with IT and didn’t see a problem with it. Things started strong out of the gate and I was soon making 3 times my previous salary. We got completely debt free other than a small student loan that I couldn’t see paying off (it was 3% interest). After a year, we got starry eyed and decided we needed a larger house in a cul de sac. This would have been fine except I was self-employed now for only a year and didn’t qualify for a conventional loan. But our mortgage broker told us about these great things called Stated Income Loans”. The interest rate was astronomical but we figured the market was only going up and we could refi in a year or so. Well, we all know what happened next. The recession hit just as we started trying to refi. We were suddenly under water on our mortgage and we couldn’t refi. Also, my clients were struggling financially which trickled down to my business. I started using my business CC’s to float money so I could continue to pay myself what I needed to make my mortgage payment. Eventually we hit ground zero. In hindsight, we probably should have filed bankruptcy but we couldn’t bring ourselves to do it in good conscience. Instead, we worked out a short sale on our house. We went through Dave Ramsey’s Financial Peace University and started working on our debt snowball. It was a slow churn though. We seemed to be treading water for years. Our credit was shot. Every extra cent went to paying off debt, but it wasn’t moving very fast. That was the start of our decision to downsize our life. We moved several times after that, each time to a smaller home. We sold our car that we had a loan on and paid cash for a small Honda. Even still, we just seemed to break even every month, barely making a dent in our debt. One day, my wife and I were looking at my father in law’s RV trailer and we joked with each other that we should just move into one of those and park it somewhere for free. It seemed ridiculous at the time but it planted a seed in my mind. What if we could live for free or close to it? What if we could eliminate our largest expense? It would not take long to shed our debts if we could claim back $1,000/month in our budget. So we started thinking of ways we could live cheaply. We couldn’t house hack because we couldn’t buy anything. No credit and no cash. We tried looking for small apartments above someone’s garage or additional dwelling units on a friend or family’s property, but came up empty. We did have about 10K though in a retirement account that we’d held on to. We thought about cashing it out and applying to our debt but it would just make a small dent and we’d have to pay penalties. But what if we could use it to lower our living expenses forever? To make a long story short, we bought a large, 43’ 5th wheel and moved it to a relatively nice RV park. It was my wife and I and our 2 younger children. It was a little cramped, but not bad. We sold almost everything we owned and went minimalistic. We had to. There was no room for fluff. Our space rent was $400/mo plus electricity which was about $50/mo. We did that for 2 years. It was a long 2 years. But we made it work and paid our debt almost completely off. At first, I hated credit and didn’t care about my credit score any more. I didn’t care if it stayed at 490 for the rest of my life. I just wanted to be debt free. But soon I started wondering, what next? What do we do once we are debt free? We can't live in the RV forever. Reducing our housing payment dramatically was intoxicating to me. I loved that large swath of income that no longer went to a mortgage or a landlord. It was ours to direct into something positive. At first it was crushing our debt. But there was light at the end of the tunnel. Freedom was close. But what do we direct it to next? That's when I had a chance encounter with a Bigger Pockets podcast. I had a short 3 day job in Seattle so I stayed with my sister and her husband who live there. They were coming down to Salem for a visit soon anyway so they gave me a ride back. On our 5 hour drive back, my brother in law asked if I minded if he listened to a podcast. I said sure and it was of course a BP podcast. I don’t remember specifically which one it was, but by the time it was done, I knew what our next move was and where we were heading with our finances from now on. We were going to achieve Financial Independence through real estate. I was hooked! That brought some new challenges, i'm sure you can imagine. I now needed to be able to borrow money. We went to work building our credit back up. WIth our debt close to being paid off, we got some secured CCs to start building our scores. Slowly but surely, our credit scores rose. We paid off collection accounts one by one and suddenly, CC companies were sending us fliers to apply. So we added a few more cards and kept building that score, being careful to only spend what we would normally spend and pay off those cards every month. Once all our debts were paid off, we started saving everything we could and I took as many jobs as I could handle (Short IT contract jobs). In the summer of 2017, we started working with a mortgage broker and a real estate agent. We wanted a duplex but they seemed few and far between. The market was hot and everything had multiple cash bids on it. We put an offer on one about $25k over asking price and still lost out. So we moved on to looking for single family. We thought we could at least live in it a year then move and rent it out. But a month later, our agent called and said the offer on the duplex fell through and the seller wanted to know if we were still interested. We were, of course, and because the first deal fell through, the seller agreed to $20K less than our original offer (they were afraid it wouldn’t appraise). That pretty much brings us to today. We bought it in October 2017, evicted the side that needed the most work (it needed a lot of work) and moved in January 15th, 2018. It wasn’t a good enough deal to do a BRRRR strategy, which is what I really want to do going forward, but we’ve saved up almost enough for our next down payment. We want to be on another duplex or fourplex by Spring, 2019 or sooner. That took a lot longer to write than I thought it would but there it is. I skipped millions of details and included too many others, I’m sure, but you get the gist. I know it may not have been the most optimized path to where we are now, but it was a path and we took it. I read Scott Trench’s book, “Set for Life” recently and the whole time I was thinking, this is what we did and what our mind set was the last few years. It was a very different journey than Scott’s but similar principles. Any way, if you have any questions about our journey so far, feel free to ask. I’m happy to be on this path and a part of this community. Thanks, Matt McElravy