Zero to 50 Rental Houses in 5 Years…
The day I decided I was going to get rich was March 8th, 2013.
I remember it was a Friday, and I was meeting some friends for lunch. We always went to this restaurant during Lent, because they sold fish tacos half price. After we pounded down some grub, we started talking about businesses and money, I casually said to my newly found friend who had just moved to Houston, “Man, I’d love to get into real estate someday…” He just looked at me, and the biggest grin on his face, and replied, “Let’s do it, man…” I was a little surprised at his response but excited at the same time. I was always hesitant to get in real estate by myself because I had never done it. Also, I was genuinely afraid of failure and the unknown.
I quickly learned that my friend, who I will call “D” from now on, had built a sizable real estate portfolio of homes in the town where he went to graduate school. Now that we lived in Houston, he wanted to start over and do it again. So on that fateful day “D”, myself, and 3 others that were at lunch formed a company. We decided to dive into real estate and to really start down the part of Financial Independence!
Since that pivotal taco day, I’ve now bought and sold scores of homes and increased my net worth to over a million dollars. I started out knowing absolutely nothing about houses but 5 years later now manage a portfolio of over 50 single family houses.
Who are We?
Here’s some background so you can see we are pretty normal dudes. We love listening to podcasts and reading personal finance blogs. Some of our inspirations are Mister Money Mustache, Bigger Pockets, and ChooseFI. I work in IT, and I live in the suburbs of Houston and I’m in my mid-thirties. My wife is a full-time mom to our four kids. So all those stories of dual-income couples with no kids or 1 kid, well that’s not my story nor my partners as he has 3 kids and a stay-at-home wife. I tell you this because i want people to know its possible to reach FI, even on one income and a bunch of kids in tow.
In 2013 I was making probably 85k, and now in 2018, i probably gross about 175k in my day job. However, my largest jumps in net worth are all due to real estate. I used to “play” in the stock market, but I quickly learned that i had limited information. As a stay at home investor, I always missed the real action in after-hours trading. I’m a firm believer in index investing, and I know it works and can make one wealthy, but I wanted something better, something quicker. I found that in real estate. Its the place I found where you can control most of the variables and therefore improve the outcome. The property, the improvements, the tenant, its all controlled by the owner. Plus, you can buy property with leverage thus amplifying your returns. This was a game changer for me. Back in the day, I would have never traded on margin (borrowing money to buy/sell stocks). However, now every rental property I have now has some type of leverage associated with it, and I still sleep soundly at night.
I also consider myself kinda a weirdo; different than all the “chasers” that seem to surround me. A “chaser”, as I define it, is somebody who is always looking for the next step up in lifestyle and doing everything to push their spending to edge, often to crazy level of debts to keep up with Joneses. Others call it “Income Bloat”. Luxury cars, boats, fancy vacations, expensive coffee, all these things are the antithesis of net-worth. That’s the only metric I track. It’s the single most important financial metric to me: NET WORTH. The famous quote, “That which is measured, gets managed,” could not be truer. We measure net-worth so that’s what we aim to increase at all times. You will see here through our journey that real estate can drastically increase net-worth if purchased correctly and managed efficiently.
Come on a Journey With Us
In this blog we plan to chronicle our journey, talking about each property we purchased, crazy tenant stories, wild transactions and throw in some life-hacks in for good measure. All the while tracking the most important number for us, net-worth. We will also share all the mistakes we made along the way in hopes that others can learn from what we did wrong. We hope you’ll enjoy our story!
