Building Wealth Through Real Estate Investing Begins With One House *Updated*

Wealth building through real estate investments begins with one house at a time. Often, when you hear people talk about real estate investing they are talking big numbers. You hear about the millions to be made in the market, especially now when everyone is buying. You hear stories about the people who own 50 or more single family homes or bought a package of 10 investment properties. You hear about the people who syndicate large apartment deals or buy a smaller apartment complex of their own. What gets lost in the hype is that the vast majority of these investors began with just one house.

My story, like many successful real estate investors, begins with one small house in Texas. It took me awhile to buy this house. I made lots of offers before one was accepted, and I walked away from a few deals for a variety of reasons, most of which had more to do with fear than with the numbers. Finally, one of my mentors looked me in the eye and said, “buy this house or I will buy it myself.” So, I bought a house that no one else would buy, held my breath (and my stomach because the butterflies were giving me a stomach ache) and signed on the proverbial dotted line.

Every successful investor has a story like this. Most of us are just like you, scared of making a wrong choice, but are determined to change our financial future. Finding a mentor you can trust, and following their advice, makes that first purchase easier and more successful.

Our first rental investment property in Texas was a diamond in the rough. Once cut and polished, we captured $36,000 in equity and a cash flow after all costs of $429.00/month – this from a house that no one wanted to buy! I remember my mentor telling me, “Someone lives in every house on this street and someone will live here too. The question is, will you be the one who profits from it?”

The next house came shortly after with an equity capture of $21,000 and $324.00/month cash flow after all expenses. The third house represents an equity capture of $27,000 and $290/month in cash flow. All of these properties have an ROI of 43% per year or more.

A picture is forming, right? For most of us, it is not one big deal that takes us from a J-O-B to retirement. It is taking the first step and following the correct road map that leads you to the retirement of your dreams. I quit my J-O-B in January of 2010, in order to focus full time on my real estate related investments, and I am having a blast! I am working again, by choice, and I can follow my passion wherever it leads because I have created passive income through real estate investments.

Just these 3 investments represent $84,000 in unrealized capital gains. I have done a lot more since buying these first 3 houses. I have bought and sold several single family homes, and I currently have 5 in my investment portfolio. I have also invested in two apartment buildings with a total of 540 doors. But remember, I started with just one house.

Every month my renters increase my equity in these properties by paying down my mortgage. In addition, they provide passive income for my family. Although real estate values may rise and fall, my renters will not move out. They will continue to pay rent each month because they like where they live. I will not sell the properties until I can realize the capital gains I need to move to the next step of my 5 year retirement plan.

My properties are the best product at the best price in the neighborhood, so they rent quickly. My renters are happy to find such a nice home. The neighbors are delighted to have the blight in the neighborhood transformed into a beautifully updated home, increasing the value of every home in the neighborhood. The vendors who participated in the deal (from appraisers to roofers) are happy to have work, especially back in the recession. The social value in our model of real estate investing is priceless.

We are perfectly positioned to sell our single family investment properties and roll that money (tax free through a 1031 exchange) into more multifamily investments that generate a solid return and require minimal oversight as a passive investor.

We have taught our 3 children (ages 21, 23 and 24) the business, it has changed the trajectory of their lives and inspired them to be entrepreneurial in other ways. Once you learn how to run a successful business, you see opportunity everywhere.

We are well on our way to living the lifestyle we desire. Where are you?

Find a mentor you can trust, one who has successfully invested in real estate through both the up and down markets. Develop your own personal road map from the J-O-B to the retirement of your dreams. Take the first step along your personal road to success by buying one property. Then buy another, and another, and another. Wealth building through real estate investments begins with one house at a time!

Comments

  1. Very inspiring to see your experience. Many people blindly compare real estate to stocks but i love the way you show the power of cash flow. Keep up the good work!

  2. When you own a Home, you get privacy, increased equity, an appreciating investment & tax deductions.Real Estate helps you to save tax.

  3. Real estate provides the highest returns, the greatest values and the least risk. Real Estate helps you to save tax.

  4. Fantastic post! Ashley

  5. As an investor you have to be willing to take risks, and step outside of the box. A good mentor will help, but be very careful, because a bad mentor can cost you thousands and set you back. I love the fact you have mentored your children, you should be the example for them. The family that invests together… thanks for sharing.

  6. I like that concept. One house at a time. Build it up. And don’t give up!

  7. Refreshing article. I’ve been thinking about getting in the game for a while now, but let all these fears and unknowns get in my head.

    • LUI Web Team says:

      Hello David,

      We completely understand. Making the decision to invest in real estate is a huge step. We’ve just reached out to you via email to get a dialogue going and we’d love to explore the idea of getting you involved on a timeline that suits you.

      Thanks for reaching out!

      Best,
      LUI Web Team

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