Unknown Speaker 0:01
Hey guys, it’s Sharon from digital nomad quest. And this is Sean everything, Rei and today we’re gonna go over our real estate journey and how we’ve purchased 15 units combined. Now if you guys are new to the channel welcome, I’m all about teaching how to build passive income become financially free and design your best lives. So if you guys are interested in that, make sure to subscribe and hit the bell button to be notified on my latest videos, make sure to subscribe to Sean’s channel where he talks all about real estate investing. So basically in this episode, we’re gonna go year by year and talk about all the different units we’ve picked up. So I guess I’ll start because I purchase my first rental property at 22. So I purchased mine in 2013. And I bought it in Antioch, California, basically an hour away from me. And the details are not that exciting. Basically, my parents worked with an agent and found this deal. They asked me if I wanted to buy a rental property. And I was like, Sure, I was excited about it. Because in 2012, I was always interested in real estate, I would look out of state all the time on Redfin, and different sites like that. And I was excited to pick up my first property, but I had recently graduated from college. So I didn’t have two years of job income proof at the time. So what I did was me and my brother actually put both of our names on the property. And we split the downpayment, as well as the repair costs. But afterwards, I ended up paying him back in full gradually, and I put my name solely on that property. So he was just doing me a favor as a great brother, this property was purchased at $240,000 and depreciate it over double and has cash flowed me a lot. So I’m very happy with this property purchase. And then in 2014, I started going to meetups and studying more in real estate. Because I was always interested in real estate investing, I wanted to pick up more rental units. But what happened was I switch over to online businesses. And then I ended up becoming a digital nomad and traveling for two years, from 2016 to 2018. But before that Shawn had already purchased properties. So maybe we can talk about that and go to you. So in 2015, do you want to talk a little bit more about your real estate journey?
Sure. So in 2015, I was actually in Los Angeles working at a defense contracting company, and my mom was actually going to move from our home here to move to Taiwan. And really, the plan was to sell the home. But as a, you know, a young investor, I wanted to actually buy the property for my mom to keep it within the family. And the plan was to buy the property, renovate it a little bit and then rent it out to a long term tenant. Well, as luck would have it, my company actually moved me up from Southern California, back to NorCal. So we pretty much halted that process of leasing it out. And then I moved in myself. But during that time, I had many empty rooms in the home. And we have a lot of friends up in NorCal at the time. So we actually house hacked his home, and allowed some of my friends who were displaced, to also live with me and pay me rent. So that way, I was able to greatly reduce my cost of living expenses. And then I could save more money to then invest more
properties. So real quick for the viewers, what is house hacking. So house hacking is
when you have extra rooms in your home, and you just rent them out to friends, family or strangers on Craigslist. And by doing it that way your tenants slash roommates helps you pay for your mortgage, and utilities and greatly lowers your cost of living expenses.
So that’s really cool that you’re able to do that. Because you basically helped your mom retire and live in Taiwan currently, right? And now you get this primary residence, you didn’t have to give it up. So I think that’s really awesome. And then moving on in 2016, you started purchasing rental properties, right? So why don’t you talk a little bit more about that.
Yeah, so after I got this property, and after reading a lot of books, and going on a lot of online forums, I got really interested in the concept of real estate investing, I’ve always wanted to become financially free. And I tried many different businesses. But real estate investing as a concept really stuck out to me because you get to buy a property that can cash flow on day one, the rents increase over time with appreciation, the property appreciates itself, and your mortgage that’s paid down by your tenants sounds like a win win win situation all the way around. And I read online that one of the best ways to get into real estate investing is to expand your network by going to meetup groups. So I actually attended all the local meetup groups in our area. And I would show up every single week or every single month. But the thing is, when you’re brand new, and you don’t actually have any investments, it’s pretty discouraging to go these movements. Because you would go to an event, you say hi up family, and you try to start a conversation. But then when they say, oh, what kind of question do you do? And you say, I’m not investing it, I’m just an aspiring investor, then they’re going to be nice and say, Oh, that’s cool. But then the quicker going to go away and talk to somebody else. So after a year of doing that, you know, I got pretty sick of it. And I actually tried to volunteer to get some more FaceTime with investors because that way, they’re forced to look at me while I sign their names. But yeah, after a year of that, I got pretty sick of myself and I decided to just finally pull the trigger and buy my first estate rental property. And the reason why I bought a property out of state was because the price to rent ratios were better out of state, and the risk was relatively low for $100,000. The amount of money that you put in is only around $20,000. So for the downpayment, so it didn’t seem like a big risk to me at the time. So after saying my target market, after building up my boots on the ground team, we finally found a property that was listed on MLS for around $100,000. And we were able to negotiate it down to just $77,000. Because the property was actually being occupied by tenants at the time. So we knew that this property would not be able to be sold to a regular homebuyer, because tenants are inside, you’d have to be another investor like myself, so you offered them like a cash offer to close quickly and acceptable price for them.
So we’re up to three units now. So maybe you can tell us more about your next property purchase.
Sure. So the funny thing is, once you buy a property, you’re going to feel the bug, you’re gonna want to buy another property. As soon as you can, I was lucky enough to have built up a strong network that someone in my network told me about an auction property that I could get for just $40,000. That shocked me, because I’ve never heard of a property that cheap before. And I like to tell people, when you’re buying real estate deals, they don’t all have to be homeruns. Your first few can be base hits, as long as it gets you in the game. But then once you’re in it, you can start targeting these home runs. And this one was definitely one of those home runs, we bought for $40,000. We bought it kind of blind. So it was a little bit risky. But luckily, when we got inside, the property condition was still pretty good. We only spent 15,000. So to fix it up. And then it’s been rented very well ever since. Awesome.
And now we are at four units. And we’re at 2016. So your next purchase was in 2017. Right? Let’s hear more about the four Plex you’re able to get.
Yeah, so after buying those two single family homes and seeing how well they performed, I got inspired to buy more properties. But then I thought, man, for every single family property you own, you have three pieces of paper that you have to worry about every single year, you have your mortgage, you have your property taxes, and you have your insurance. And that’s a lot of mental headache that you have to deal with. And imagine if you scaled that to 30 plus units, then that’s 90 pieces of papers you have to worry about. So it’s working really hard to find four really good single family homes, I could just work hard to find one really good four Plex. So there’s more scalability in the multifamily side. And I want to try it out. So I asked my agent and our property managers to let me know if they ever heard of any good four Plex deals, and a couple months, but we found he found one. This one was for $250,000 in a really good location in Jacksonville. And at the time each unit was renting for $650. But we knew that we could boost the rents up a little bit once the current tenants moved out. The beauty with this four Plex is that the water meters were actually separately metered, which meant that I didn’t have to pay for your water utility bill is my word. And that saved me a lot of money over time as well.
Cool. So now you’re at eight units. And let’s go back to my journey. And basically I was still digital nomad thing. And I just come back in 2018, March of 2018. At the time, I was feeling kind of unfulfilled because I was just working towards building more and more passive income through online businesses. And I realized I needed more purpose, I needed to learn more skills, I wanted to build an impactful brand, there are a lot of things I wanted to do, which made me come back to the Bay Area ended up taking a job as a marketing manager at a startup. I’m still working at that startup because I really like what we do. The beauty of having multiple passive income streams is that you can choose something that really resonates with you. And another reason why I wanted to get back into working was that I wanted to start doing more real estate investing again. And I knew that with lenders, it’s a lot easier to get more properties if you show you have two years of job income proof. So at the time, I started going back to more meetups, more studying with books, podcasts and stuff like that I knew I wanted to invest out of state because California is pretty expensive. I didn’t want to buy in Antioch again, because I knew that it’s appreciated a lot in value. So I wanted to look at cheaper markets. Then in 2019. I met Sean and is really cool that he had that real estate investing experience. We started dating and it was great. By the end of 2019, we actually started talking more about real estate investing again, and he knew that I was all about estate investing. So we started researching different target markets, we had a bunch of cities we’re looking at. So we did the work and researching kind of analyzing a bunch of deals, calling the right people like agents, property managers, and people like that to build our boots on the ground team. And in March of 2020 actually purchased my first four Plex out of state. So I purchased this at $175,000 in Texas and repair costs were maybe around $6,000, but it’s been cash flowing really well currently, and it’s appreciated in value. So I’m very happy with that purchase. And that four Plex purchase brought us up to 12 units. And just like Sean said, you get kind of more impatient about getting more properties because you figured out the blueprint of how to buy these properties you just want to get more and more because it starts cash flowing really well. These properties are appreciating value. It’s really cool to see so I looked on bigger pockets and I found this deal in that target market for $25,000. I contacted the wholesaler and was actually able to negotiate down to $23,000 and I purchased it all cash I paid another 33 to $34,000 in renovation costs all cash again, by repairing this property I was able to increase the value of the property a good amount and it’s been cash flowing really well, I was able to increase the rents a lot just from those renovations, I was very happy with this purchase, because looking at the before and after pictures is really nice to be able to see how much of an improvement I was able to make on this property. And after that purchase, we brought us up to 13 units. And we started looking at other markets I had been calling other agents from different cities that started sending me deals, the impatience was kicking in, I called that agent again, saying, hey, like, you know, I’m interested in getting more properties. If you have any, in the under 100k range, like, I’d like to look into them. And lo and behold, that agent actually was selling a property that he owned himself, he was like, hey, like, check this one out. And we negotiated basically down from 45k to $37,500. So I actually got this with alone, I put in a 25% down payment. And the reason why I did that was the interest rates were pretty low at the time. So I was like, Maybe you should do that. But then the closing costs ended up being pretty high, like close to $5,000. You know, I put in a downpayment of a little under 10k, but they ended up paying that much in closing costs. So I don’t know if it was a good idea, but I’m still okay with it. Because of the low interest rates. The good thing about this property was is pretty turnkey, because they already had existing tenants in it, and the property management company in place, and I talked to that PM, and she was like, Yeah, this property is good for like another five years or so you don’t really need to touch it. I was like, okay, cool. And it’s cash flowing really well, recently, the pm even told me that the tenants paid an extra six months in advance. So I’m like, Okay, this is really awesome, great property. I’m happy with the purchase. So now you’re on our 15th unit. Do you want to talk a little bit more about what we did for this one? How we found it and everything like that?
Yeah. So after your success with the 14th unit, again, you got answered, we want to get another property. And we asked the as the same agent said, Hey, do you have any inventory, we’re looking for properties in this area, he actually sent us some listings. And when we tried to put an offer there already snagged up and told us that Mark is still pretty hot. And if you really want to find a good deal, then it should be off market. So lo and behold, he gave us a deal for $16,000. And we thought oh my goodness, like this is you know, almost nothing to us. And that’s like the down payment for your last property. So yeah, no brainer, seemed like it was still in a decent area compared to where you were at the rents were pretty good at maybe 606 50 per month. And yes, it did need a lot of work as to currently going through the renovation process now. But at $15,000, it seemed like a no brainer. So when we got the offer, we pull the trigger on it actually down the road after we got the property inspected, the agent went back on our behalf and asked for another $1,000 discount. So it was super crazy, and obviously is a great agent. And we’re just going to definitely work with him again in the future. And I do
want to add that I found this agent through bigger pockets. And you know, he has worked with a lot of investors. So he has that mindset of trying to make sure that as an investor, it’s a cash flowing property in a good area. So the good thing is buying through him, he can recommend different deals to us or not. And a lot of times when we ask him, should we purchase this one or this one, he will let us know like no, don’t get this one or this one. And he’ll have the reasons because he has that investor mindset currently with this property. As Sean mentioned, we are renovating it and the property management company said that we could probably get it to about 650 and rents per month, I believe. So we’re very happy with that it totally exceeds the 1% rule, we’re going to get a great return for this property. So we hope to buy more rentals like this in the future. As you can see, by investing out of state we’re able to buy in a lot of cheaper markets. We don’t need to leverage too much money so it’s not as risky but played so that was basically our journey towards 15 rental units. We are planning to grow our portfolio a lot more in the future. We’re going to buy a lot more rental properties this year. And in the future, we’re hoping to tenants our portfolio that way it’ll cashflow a lot for us as well as appreciate a lot for us so we’ve significantly grown our net worth by kind of creating this round portfolio for us. If you guys are interested in out of state real estate investing, make sure to check out the remote Raul riches course that we’ve launched pretty recently. I’ll put it in the link below but basically it gives you a step by step guide on how to purchase your first out of state rental property and replicate that blueprint over and over again towards financial freedom. We hope you guys like this video about our real estate investing journey we hope to give you more progress updates in the future if you guys liked this video, make sure to smash the like button. Comment below and let us know what you guys think about our journey subscribe to both of our channels hit the bell button to be notified of our latest videos. And we’ll see you guys in the next one.Transcribed by https://otter.ai