Where we are today because of rentals
We have been in the real estate business for around seven years or so now. We started in 2009 with my first deal, a rehab project which was a four bedroom one bathroom house in Hollywood, Florida. We purchased the house for $60,000, fixed it up nice by putting in about $20,000 in repairs, and then sold it for $137,000. I was not alone in executing this deal and actually used a partner to help me and my dad , who was doing the deal with me, put up one hundred percent of the money for the project because fortunately, or unfortunately, we didn’t have any money or credit at the time to do the deal ourselves.
This property was a fantastic opportunity for my dad and I as there was a large amount of equity in the property and we were buying it at the right price. We put it under contract, but we did not have the money for the deal and we did not even have any contact with anybody else that had the money for the deal. But we risked our deposit and our chances anyway. Once we discovered that the property had a large amount of equity in it, we started to talk to everybody that we could. We had about two or three weeks to close on the deal and we were very fortunate that this particular investor jumped right on board and not only put up one hundred percent of the money for the purchase price, but also put up one hundred percent of the money for the repairs. In return, at the end of the project, we would split the profits fifty-fifty. If you are interested in learning how you can do this, go to www.CashFlowMakerProgram.com/Training.
It was such a great moment because I was working at my dad’s business tirelessly making only about ten to eleven dollars per hour. I was still a college student part-time and learning about real estate over the weekends and neither one of us knew anything at all about construction. Michelle was not a partner in this deal, but she was learning and getting involved closely because we knew this could be the vehicle to take us to the next level. We really needed to start learning all about it. So through doing this rehab we learned about construction and learned a lot more by making mistakes. And you know what? It truly was a great experience for us.
We also realized that this would be a great way to actually become financially free. We had started learning and started listening to audio books and going to seminars and educating ourselves about real estate. One thing that really made us think about this business was that nine out of ten millionaires in the United States had created their wealth through real estate. So we knew we could the same thing ourselves.
It was also the very first time that I, received a check with to my name for $10,000. It was such an amazing experience and that’s where everything started to become clear to us. After I did that project, the investor was so excited that he gave me and my dad two additional $5,000 checks to have them ready for security deposits for the next two deals. His point was that since we did such a great deal together this time, let’s keep going nonstop do this exponentially where we can do a few more just like it.
That’s when the whole business really started to take off! In the first five deals we did after that, we bought the properties from same wholesaler that we used before. We became friends with him and talked to him every single day when we were looking at properties. We wanted to do exactly what he was doing. We knew he was making good money and asked if he would teach us how to do it. He agreed to teach us and guide us on what we needed to do for us to make a little bit more money. If you are interested in learning how you can do this, visit our website www.CashFlowMakerProgram.com/Training.
Michelle and I were ready to quit our jobs and do what the wholesaler was doing and focus one hundred percent on this business. We didn’t know anything about this business at all, and had no idea what to expect. But we now had this person who was going to teach us how to do what he has been doing successfully and we were going to listen to his advice and model ourselves on his methods.
We became wholesalers and what we do is help investors who want to buy, fix, and sell, or buy, fix, and rent properties, and find those properties that are under market value. In the process of doing this we have met so many key people that are so important in our business. We have built our team and developed relationships with some great mentors who have helped us so much in our business.
One of those people was actually another wholesaler whose only purpose in doing wholesales was to acquire capital. We ended up becoming friends with him and his best advice to us was to not stay in wholesaling all our lives because it wouldn’t give us the freedom we were looking for. We would strictly have a high paying job and a check, but it would still be a job because we would have to be working on it one hundred percent of the time if we wanted to keep bringing the checks in.
He told us that we needed to buy rental properties. But in our mind, how could we buy rental properties with only $10,000 in our account? Well he taught us how to do creative financing and how to use hard money loans and lenders to buy those rental properties and then refinance them.
We of course didn’t know that we could do this type of thing and certainly had no idea what type of houses to buy. He told us that we should buy big houses with 3 bedrooms and 2 bathrooms, nice properties that obviously needed repairs. We could buy them cheap with hard money. Just make sure that we always took care of our credit and taxes so we could qualify with a bank and refinance.
He explained to us exactly how to do it and that’s exactly what we did. We found a property in Deerfield Beach, Florida. It was a nice beautiful 4 bedroom 2 bathrooms with a pool. Now that was a big mistake! Never buy rental properties with a pool. We eventually had to cover it up after a lot of problems with it including the tenants not taking care of it. We didn’t have to maintain it every single month and it eliminated our headaches with it.
We bought that rental property for $56,000 and put in about $15,000 in repairs. It was in pretty good condition and the reason we got it so cheap is that the bank marketed it incorrectly. They listed it as a two bed two bath, so nobody would pay attention to it, and they failed to include any pictures of the property. When we walked into the house it was actually a beautiful four bedroom two bath with granite counter tops, bathrooms in really good shape, tile floors, central air conditioning, and a good roof. What else could we ask for?
We didn’t have any money, but for $56,000 in a market where everything else was selling for $80,000 to $90,000, this was a no brainer. So we jumped on board, we looked at the property, got a hard money loan, and we closed on it.
We were able to get the property rented for $1600 a month through Section 8. After six months we refinanced with a bank for a thirty-year mortgage with a fixed interest rate. And our cash flow increased about $300 per month. We were now cash flowing about $1200 a month on this specific property after all repairs were accounted for. We were able to redo the entire roof and finish up all the rest of the property. We made sure that we had a good property for the next twenty to thirty years because we had renovated it the right way.
So in the first year we had bought just this one property as a rental property. We were still doing wholesales and rehabs which allowed us to get financing and capital so we could start buying more rental properties. In the second year we bought two more properties and in the third year we bought three more properties as rentals. So by the third year we had six rental properties. Then things really began to spiral. In the fourth year we bought five more properties and last year we acquired another three.
We bought all these properties using the same strategy. We would buy a property that was in need of a lot of repairs, fix it up, and get it rented through Section 8. These were all the same type of property in the same location and area, a good size, descent roof and foundation. We did all the cosmetics inside, rented them out, and then we would refinance with the bank at a thirty-year mortgage and fixed interest rate, which would increase our monthly cash flow. But after refinancing four properties the bank started seeing these as commercial loans which then enabled us to get a big business line of credit with all this equity that we had.
Today we actually have a total of fourteen rental properties, some of which are paid off and some of which have regular mortgages with a bank, and we now enjoy the financial freedom that we have been looking for and we’re not even thirty years old! We are both twenty-nine as we write this book. We have worked very hard at this business and for very long hours but it has been such an amazing journey.
Today our rental properties pay for our house, our lifestyle, our vacations, our cars, our gas and our food, everything that we need, and we just keep working because we want to keep working. We want to keep growing and we want to have so much more and build the same foundation for our parents, and for our kids when we decide to have some. It really has been hard work but we can’t imagine working this hard for another business or for another company making somebody else rich and making somebody else’s dreams come true.
It’s been a great journey and we’re not going to stop anytime soon. We are going to keep growing and growing and today we have a program where we are teaching regular people how to start in real estate using the specific strategies that we have used and in the same exact situation when we started; no cash, no credit, not even credit cards. We are teaching people how to start wholesaling, how to do rehabs, and how to buy rentals, so they can then refinance to reach the ultimate goal of finding their own financial freedom through real estate. Remember, nine out of ten millionaires in the United States have created their wealth through real estate! If you are interested in learning how you can do this, visit our website www.CashFlowMakerProgram.com/Training.
So that has been our journey and the future is very bright. The entire trip has been long in hours, but very joyful long hours because we knew what the end result was going to be. By telling you how we got to where we are today because of rentals, we hope to inspire you and motivate you so you understand that step by step, you’re going to get there as well. It does not have to be a long tedious path. It can be a short and sweet one but it has to be effective, it has to be massive, and every day you have to work a little bit more toward that goal.