The year was 2020. I was in living in Barcelona at the time. I’d been out of the United States since 2014 when I quit my job and took what little savings I had to travel the world. Afterward, I moved to Colombia, then Germany, and then Spain.
Throughout this time, I had been working remotely for a mergers and acquisitions consultancy based out of New York City. I had been saving quite a bit of money every month and had been investing every penny that I was saving. I saved with the sole purpose of building my portfolio. When the lockdowns came in March of 2020, I was able to save even more of my money. At the same time, the stock market was constantly climbing. Everyone was seeing more green than red in their portfolios. My money during this time had grown by over 30%.
Though I had a full-time job, and I was living just minutes away from the beach in Barcelona, I was unfulfilled and began to look for a more substantial purpose in my life.
I would wake up every morning and enjoy a coffee on a Spanish terrace and then go to the beach. Afterward, I would begin working for the rest of the afternoon and some of the evening. At the end of the day, though, I still felt as though something was missing. I was sitting on about $80,000 in cash which was all tied up in the stock market. I considered several ideas such as starting some kind of business. I realized, however, that what I really needed was something that was more passive.
I liked my lifestyle. Being able to make my own schedule, being able to work remotely, being able to travel wherever and whenever I wanted. But I didn’t like the idea of my livelihood being tied to a single source of income. What if I suddenly lost my job? What if the company went out of business? How would I be able to sustain myself?
I needed income with the flexibility that my current job was providing without the risk of losing that income. I needed passive income. More than just passive income, I needed something tangible to place my money.
The stock market is risky. At the time of this writing, had I not invested my money in real estate, I would have lost 25% of my money by now. The market has crashed, and every day I’m losing money from the small pile I still have invested in stocks.
What I wanted to buy, I realized then, was income. I didn’t just want to buy stocks. I wanted to buy an income stream. A passive income stream, that was reliable and consistent and required very little of my waking hours to maintain. I also wanted something tangible that would increase in value. I didn’t care to be a millionaire or billionaire. I only wanted the comfort of knowing I have a reliable income, without the time commitment of a full-time job.
Enter real estate.
Around this time, I had a talk with my friend about a project he was going to start working on. He was considering buying a single-family home and renting it out. Property values were increasing, as were rent prices. And interest rates were at all-time lows. He broke down his rationale for me and walked me through his numbers.
I always liked the idea of putting my money somewhere it would grow. I had no dreams to spend the $80,000 on anything like cars or vacations. I was already living the vacation life, working from a beach on my laptop. What I was missing was a purpose and a goal to wake up to every morning. At the same time, I did not want to work at my current job forever. I wanted to slowly ween off from needing the income from my job and starting a business that produced the same stream of income while letting me live the same lifestyle. When I brought this up with my friend, I realized that this goal could be achieved with just a few years of investing wisely in real estate.
I began to learn all that I could about real estate. My friend introduced me to BiggerPockets, a podcast, and resource for both new and experienced real estate investors. I participated in a few webinars online while in Barcelona as well as watched a bunch of videos and read several blog posts. I bought Brandon Turner’s book on investing with little to no money down, as well as other books on the BRRRR (Buy, Rehab, Rent, Refinance, and Repeat) method. Everything to me seemed so logical and fit perfectly with my goals and lifestyle.
I liked the idea of building something that I could physically see as well as something that would produce wealth for the long-term and cash flow in the short term to support my lifestyle, which I loved. Investing in real estate would provide for me all of the above, as well as keep me goal-oriented, purpose-driven, and eager to wake up every single morning with a reason to work hard. On top of that, every step in my real estate journey produces tangible results, from the phone calls to agents and the open houses and working with lenders to secure funding, I can immediately see the results of my actions well before the cash flow even begins.
My goal is to have enough money to be able to retire by 40. This does not mean that I will stop working and live aimlessly on a beach in Barcelona. I’ve already been there and done that, and I’ve realized I am not happy unless I have a purpose to live for and a goal to work towards, and meaningful work to fill my waking hours with.
A W2 job just doesn’t cut it for me. I need to work for myself, see my own wealth increase, and spend my time continuously making life better for me, not for somebody else.
Since that time, I’ve moved back to the United States. I’ve invested in two rental properties in St. Petersburg, FL, both cash flowing tremendously from the very beginning. I’ve read dozens of books related to real estate investing, from remodeling, to lending, to tax advice, as well as management, leadership, and business advice.
I can safely say that I am certainly obsessed with real estate. It all just makes sense to me and fits perfectly well with my lifestyle and personality. I enjoy talking about it, I enjoy working with agents, I enjoy turning dilapidated homes into beautiful homes, I enjoy leveraging other people’s money (OPM) to build wealth both for them and for myself and future generations of families, helping turn old unkempt neighborhoods into modern places of living, and sharing what I’ve learned and my knowledge so that others can achieve the same goals as I have.
My first deal was a single-family home that I now live in and house-hack. It is a 4-bedroom 3-bathroom 2,200 square foot home. I live in the master bedroom and rent out the other rooms and make $2,500 a month while paying off a mortgage of only $1,400. Not only do I cashflow over $1,000 every month, but I’ve also eliminated my living expenses. I purchased the home for $287,000 in April of 2021 and after remodeling the home now appraises for upwards of $450,000. In one shot, I’ve managed to add an income stream of over $30,000 a year while at the same time increasing my net worth by close to $200,000.
I am ecstatic about these numbers. The extra income provides the comfort I need to not have to worry about paying my bills, and the value added to the home can be used as leverage to do more deals, further increasing my income and net worth.
The comfort is another thing that entices me to real estate. Not having to worry about money is more important to me than making more money and buying fancy things. Being able to sleep at night knowing my living expenses are covered and that I have the ability to save thousands of dollars a month that will go towards my goal of acquiring more rental properties and renting them out is priceless.
A W2 doesn’t provide that for me. Not only will I have to keep going to work, but I’m also at the mercy of my managers and their bottom line.
Just one or two properties is nothing to brag about, I’ll admit. Eventually, I want to diversify and own dozens of properties, both single-family, multi-family, and hopefully even commercial properties so that I have several income streams that can support me during any economic downturns, providing me with better peace of mind in the long run.
Another reason why I invest in real estate is generational wealth. I don’t have any kids, and I’m not married. But that doesn’t mean I don’t want to get married or plan to have kids in the future. Real estate provides the income stream I need now, and in the future it will provide that same income stream as well as tangible assets that I can pass on to my children and grandchildren. It’s the perfect option to achieve both a lifestyle for the present as well as a future full of financial freedom and wealth.
Tax incentives, the ability to leverage existing assets, debt pay down, and appreciation are other reasons to own real estate. The government is very generous when it comes to write-offs for rental income, you can use the value of your home to refinance or get a Home Equity Line of Credit (HELOC) for major purchases such as remodels and even to invest in more real estate, and your home will appreciate over the years as you continue to own it. Although I didn’t consider these benefits at first, I quickly grew to understand them as an added benefit of owning real estate.
Let me know why you decided to invest in real estate in the comments below. I’d love to hear about your reasons for investing.
