$0 to $5,500,000 in Assets by 27. Here's How I Did It.

the house behind me is worth about four and a half million dollars I could buy this house and spend a million dollars of renovating it by 27 years old but I won't instead I'll tell you the story of how I got the money I just have to change shirts and remember meet me in Chicago on July 13 the story starts a long time before it ever even tried I Mikado toast oh and before we get into the video let's just make this really clear a five and a half million dollar portfolio means if values go up just 1% it's kind of like I made $55,000 doing nothing 2% 3% you get the idea it gets ridiculous so people are always worried about why I want passive income while I want cash flow well you know I want to be rich and I want to be able to retire and go live on the beach of Mexico or whatever and do nothing the first thing you should do is figure out how am I going to build a net worth because once you have a net worth you can transform all the assets you have into cash flow pretty dang easily if they don't already make you a ton of cash loss in January of 2008 right before the greatest financial crisis since the Great Depression I knew absolutely nothing nothing at all about wealth of a catechist or real estate and well quite frankly school either see I went to school took AP classes in honors classes but ended up a CED student and didn't pass a single AP exams now one of the reasons that wasn't exactly the best of students was because I would skip school to go play a Burning Crusade runescape or counter-strike so I was basically a truant in high school as a junior and I decided what would be a nice way to miss some more days of school oh you know what I'll go on a school trip to Europe and on that trip in Paris France I met Lauren C I went on the trip from a South Florida Lauren went on the trip from this school so after being long distance for a year I'm like well I don't have a job I don't have any money I kind of suck at school may as well just try my luck out in California and see what happens at 17 years old what could possibly go wrong going across country for a girl well this is also where one of the first big changes in my life took place and it really helped shape what I'm able to do now see back when I was in Florida I would take all these honors and AP classes and like biology and history and stuff I didn't really care about I just do it because I thought I had to do it to go to a good college well then when I came out here I decided you know what just put me in all of the easiest classes and I'm just gonna study what I want which at the time especially with the recession going on was everything having to do with finance the economy money credit cards you name it just to understand how is it that so many people are losing so much money and how in my life can I do the opposite and see there were two things I started learning I started realizing oh wow wait a minute there is something really important about credit so on my 18th birthday I didn't have a fancy party and said I went to Wells Fargo and opened a credit card on my 18th birthday in addition to that I learned so much about the marketplace in the economy that my econ teacher in the basic college prep class that I was taken said hey Kevin I do you want to enroll in AP econ I'm like nope I'm gonna keep studying what I want to study now what somebody else is gonna tell me to study now that didn't exactly help me get into like a crazy fancy college but it did help me get into Ventura College but right before I started taking classes here in the summer before I enrolled here I actually ended up taking my real-estate exam to possibly become a real estate agent Laurens family knew about real estate how hard could it be to be a real estate agent the median income is like $54,000 for a real estate agent I could probably make more than the six thousand dollars I'm making right now working part-time minimum wage and so during my first semester at Ventura College I was actually standing right here this was the entrance to my portable for the first class I had in the morning and that portable is now gone so you can see this is now parking a lot but anyway I was standing here and I got an email oh my gosh I officially passed my real estate licensing test and now I'm a real estate agent I'm like whoa I don't really know anything about real estate I just went from selling smoothies and so what am I gonna do now so first thing I did was you might think get educated and I did start doing that but I bought a car I bought a Prius and thought you know what I'm gonna just slap my face on it I was always kind of against the leasing things I still am today I just don't like leasing I like owning because eventually it's paid off and it's mine I don't owe anybody anything you know a lot of people are like oh well then you don't get to have a new car every three years I don't so I can care about a new car every three years I barely care enough to wash the car that's probably not so good for advertising but it was while I was here at Ventura College that I took my enthusiasm for the market and money and started learning everything I could about real estate and used my car's way to advertise my services even while I was parked at Ventura College the funny thing about that was people actually thought I was here teaching college not taking college classes so it's like okay I'll take it sure let me help you sell your house so while going to college not only did I start taking my first real estate clients but I thought hmm what's the next best way to start selling real estate well how about owning real estate and so that's where we get to the story of this place yeah that house right behind me was actually the first house we ever made an offer on the problem was we knew absolutely nothing about what to do or what to look for all we did then was we looked for okay well what could we afford and in that case the only thing we could really afford was actually what we now call a wedge deal that is we had to look for places that had crummy kitchens crummy bathrooms crummy flooring car paint because that's all we could afford if the place already had dual pane windows or a newer roof or copper plumbing like this place has well the now which is bonus we just looked into that so that's how we had to start but it also created a lot of fear because this was our first time buying a place and our budget was anywhere between two hundred eighty thousand to three hundred fifty thousand bucks that was it we couldn't afford a penny more mostly because well Lauren's income and my income was so insignificant that the lender said yeah you guys qualify for zero so when we co-signed with my father we were able to buy this place and what was really frustrating about it was it seemed like everything was getting multiple offers even this place had to cash offers on it and so we got to the point of frustration where it was like wow are you we really going to miss out on another deal so finally we're just like whatever just offer three hundred and five thousand dollars on this place that was listed for $287,000 and we finally won well we thought the challenge was over but the problem was we actually needed help to be able to qualify for the property and the way we did that was by enlisting my father who was kind enough to co-sign for us except he made us start thinking about things that we originally hadn't thought of like what happens if things go wrong what happens if we can no longer make the payment what would we do the first thing we thought is okay well if we move in and for some reason we can't make the payment anymore we'll rent it so of course we ran the numbers and thankfully we realized wow even with repairs and vacancy we probably be all in for about 2150 and the rent was 2150 at least what we thought we could get on the market if we needed to sell we were pretty confident we were getting a good enough deal although it was the first place we were buying and if for whatever reason the market fell say that too loudly okay that we thought oh it wouldn't really matter because we would just keep it but then you know something interesting happened we moved in and that kind of a little fire under our butts to go make some more money and we did and so within a year we were able to qualify for our own loans which set the stage for the next one and see what was interesting is buying that first property was so overwhelmingly scary that I think I got a lifetime of scare out of me and now I'm just like jazzed on real estate I find that to be so true with pretty much everybody that has not yet bought real estate but it's part of my real estate investing course which if you don't know about it link lots of 250 bucks help you analyze your deals to to get so many people in there that are looking to start and they have a lot of questions a lot of fears and just having somebody to bounce those fears off of that's unbiased in the situation is so valuable to a lot of people and now it's almost every single week that somebody posts saying I'm in escrow I'm getting ready to close it's so exciting but I relate so much because I went through that same initial fear that same oh my gosh the flooring guy just called and said there's asbestos under the old linoleum I'm like oh come on like no we've already got mold we've got no kitchen now you're telling me there's asbestos and this is bad and that's right like all of the bad news that Lord and I went through initially to start getting into real estate really kind of made us kind of jaded to the idea of bad news and real estate [Music] and you know how to fit something really crazy happen not only did Lauren and I start getting closer because we're spending all this time making trips to Ikea and Home Depot with you all's to save every freaking penny that we could doing drywall ourselves Electrical it doesn't matter you name it whatever I could do to learn is what I did in that first house I would do a bunch of outlet changes or or drywall or whatever then I'd hire a professional ago hey what did I do wrong just to teach me so I could learn and what came out of this was after a year of owning this property I'm like wait a minute this isn't that big of a deal so that three hundred thousand dollar house turned into a now six hundred thousand dollar house but after I got through that renovation after we settled into that first house guess what the next thing on my mind was well we need a rental property if we were able to take a three hundred thousand dollar house and get it appraised for $450,000 within a year of us doing the fixes that meant we now got a home equity line of credit and we were able to buy a rental property why not now it's just a matter of going and finding the deal so it was right here it was right here that I remember audio booking and passing out flyers remember leaving flyers on these houses and I was just thinking to myself I have to find it I'm going to find a rental deal this year I'm gonna make it happen I don't know how it's gonna happen but I just feel it I think I just watched the movie the secret and I'm like sure if I just keep telling myself that I'm sure it'll happen okay so here's the story of what happened next so next as I told myself to keep grinding I made sure everybody knew that I just bought real estate and I just renovated real estate and what did that do well not only did it start letting people know that I was interested in buying real estate but it showed that I had the confidence to work with people who are interested in real estate now you don't have to be a real estate agent to do these things but you don't have to be somewhat confident that you know what I'm a realist investor saying I'm a real estate investor took forever because I thought to be an investor you had to be you know a multi-millionaire you had to start with 32 units and have two million dollars in partnerships and LLC's and all this money to be able to make any money in real estate I thought you know what I'm not an investor I'm just some kid buying a house so that really kept me discouraged but buying that first place and seeing what I was able to do with it with certainly a lot of effort but very well compensated effort I got super stoked and see that's where I ended up on this street see I always told myself I'd only be interested in real estate that I'd be willing to live in I would never buy any kind of super super inexpensive low-end something where I wouldn't feel comfortable living and so this particular house behind me was for sale and remember I was a real estate agent so I decided to hold an open house right here at this house and a while I was holding this open house the neighbor from across the street walked in that neighbor ended up being the owner of this house right here and she said well would it be awkward to have two for sale signs on the same street turns out not only did she not want to put the property on the market and she was willing to sell it to us but Lauren my girlfriend at the time knew the seller ironically the seller used to work in Laurens elementary school office and she actually remembered Lauren because Lauren was sick with asthma all the time and so our first rental property literally fell in our lap and I I don't know I mean part of me is like whatever just freaking coincidence or maybe there's something to the whole like secret thing but I think it all really started with that willingness to say you know what like we got our worst-case scenarios covered let's just pull the trigger on number one and we'll worry about the other stuff later there's a reason why the first video of mine that ever got any decent amount of views on YouTube had to do with encouraging everybody to start alright step one for everybody who just wants to watch for 20 seconds you need to buy a place if you keep watching to learn how why and all the other tricks and I know and do I am and all that stuff the feeling I watch 20 seconds is about 20 seconds because it was that first house that really led me down this real estate investing path and so guess what happened after we bought this place and fixed it up with the same experience I had from house number one well we started shopping for yet another house and now you might be asking yourself well why would we be shopping for you know these little single families like this rather than big apartment buildings and units and you know all the sort of stuff that you pretty much hear everybody talk about on YouTube well the reason for that was pretty simple in order to buy a big apartment buildings and units you need to do what's very simply known as over pay a lot of these apartment buildings basically take what all of the apartment buildings similar to it sold for before and then they add a premium and then that's what you have to pay now you might be thinking yourself well they can't charge more than market value right that might be true but what happens with multi-family real estate is you have a ton of investors competing for these in fact research suggests that on multifamily especially larger apartment buildings ninety-five percent of the time are you dealing with people that are solely investors they don't care at a house hag and live in one of the units or any that they're just straight-up investors and oftentimes they're trying to place other people's money because they're running a fund or whatever and when you're running a fund you don't care about overpaying you care about buying and selling crap so you can collect your fee so what happens while those market values artificially get pushed up what did I want to do well wanted to keep doing what I did with my first house and what I did with my second house well therefore I had to make a choice and I realized Wow wait a minute on single-family this kind of stuff are the more basic kind of stuff only 11% of buyers are sophisticated investors that means 89% of people buying places are probably exactly the same as I was when I bought my first place except they wouldn't have basically had the balls to buy a place with three and a half percent down that needed mold work asbestos work didn't have a kitchen didn't have toilets in the bathrooms all that kind of stuff I just did it I just dove in because I don't know what are what's the worst case a what's the worst that could go wrong maybe it was a little crazy at the time looking back but whatever it's exactly what gave me that motivation to go whoa this is this is too easy man this is like this is like free money people are leaving on the table go ahead you want to buy units you want to start with 32 units you want to go put 35 40% down great you'll probably not buy anything until you're 40 or 50 years old or you'll get discouraged and you'll give your money to somebody else and then you'll earn your marginal returns I on the other hand was able to take a little bit of my money like $8,000 $9,000 from Lauren and turn it into over $200,000 in equity in the first place which we then borrowed against to buy our second place and you might think oh my gosh you borrowed against your $200,000 to buy another place well now you don't have any equity but that wasn't true because we put that money down on the other place and we're able to generate another hundred fifty thousand dollars in net worth above what we paid for the property and above our down payment so it's not like we lost our down payment we saw that money there because we bought another good deal that's how all of a sudden it was like oh my gosh we went from a net worth of like eight thousand dollars and nine thousand dollars to a net worth of somewhere around four hundred fifty thousand dollars in two years thanks to real estate you don't see anybody doing that investing in index funds or funds in general and notice most of that net worth didn't for me doing crazy business as a real estate agent in fact my first two years in real estate I made thirty five thousand dollars and fifty five thousand dollars and I had business expenses on top of that so probably had even less but what did I do I just kept hunting for deals because now when you have this net worth on properties that create cash flow one rented out what are you able to do you just keep going to the bank and you ask for more money you go look I did really well on these they cash flow we could qualify those rents and let us buy another one so we went shopping for a short sale and well and yet another really nice neighborhood here's the third property we bought using money from the other deals we bought to buy wedge opportunities and create a massive net worth again this property because there was a short sale and was also being sold on her market probably bumped our net worth to easily over half a million dollars the day we closed and look I get it you might all be thinking to yourself Oh Kevin does that mean you're just all debt no equity no in fact just because I bought my first house with three and a half percent down doesn't mean there's no equity in fact that first house we bought three and a half percent down probably closer to 40% equity now and it's worth $600,000 similar things are true for all of our properties especially the ones where we're putting 25% down and we're buying them in the wedge it's amazing what you can do with residential real estate because there's such a lack of competition and the financing is really good but do keep in mind I'm a big fan of not over leveraging in fact something I talked about on my channel pretty regularly is that I'm not a fan of constantly refinancing and having too much debt I'm a big fan of you know once you have a nice base or something you can retire off of don't lose it in a recession you know I mean now another principle that I'm a huge fan of is doing what's known as by the median the median price for real estate in my area is between five hundred eighty to six hundred ten thousand dollars depending on when you look at it the first three properties we bought are all today worth $600,000 so when I give you advice on this channel realize follow that advice awesome next house is house we live in oh yeah and one more thing please make sure you you know do this this is my house I'm super happy because these maples are finally in bloom but anyway this place we bought for six hundred thousand dollars it's probably worth somewhere around seven hundred twenty thousand dollars and we got a loan of way less than both those networks okay sorry folks my mic just broke so I have to use this handheld sorry I know it looks kind of funny but it's just you and me don't worry nobody else is watching it's still just us even though it looks like I'm a news reporter now anyway here's something else I wanted to talk about I get all these comments all the time from people are like oh my gosh well if you invest in a single-family house when it goes vacant it's a hundred percent vacant yeah and that's true but when you own multiple single-family houses it's kind of like having 110 unit apartment building except maybe you have ten single-family houses they're just spread apart and yeah it might be a little bit more work but I'd rather put in a little bit more effort and get under market value deals which is exactly what made Warren Buffett rich then tell people it's okay to overpay for real estate and don't fall victim to those arguments like Oh what about scale one roof instead of ten roofs yeah what about paying under market value and building a massive net worth every time I make a purchase rather than overpaying when I make a purchase hoping it appreciates also on the note of vacancy factor see this house right here behind me yeah that house we bought as well and this one just came up for rental renewal and we got it rear nted within one week it was the first vacancy that it had within three and a half years some people are like oh what if you can't get it rented for for two years or whatever and I'm like dude you think if you drop the price by 50% you'd get it rented tomorrow the answer is always yes in fact you probably have a line of people out of the door hi there that are willing to rent the property and so the question isn't is there somebody that's willing to rent it there always is somebody who's willing to rent Horatius has to be right and then stuff rents we're never worried about vacant real estate it's never a concern of ours because we just re rent stuff and if you have trouble doing that then just get a property manager involved which I recommend you do anyway now the other thing that's a good idea is minimize your monthly expenses that are debts that don't matter see for every dollar of a debt you have you have to earn two dollars and a 30 cents to be able to qualify for the same amount of real estate so it makes more sense to pay off like a car lease or credit card debt or student loans so you can qualify for more the other mistake a lot of people make in real estate is they wait to get pre-approved or they wait to get started in real estate they suggest oh well I'd rather wait until I have kids or a family to buy a house I don't want to settle down yet I don't wanna be tied down by a 30-year mortgage I'm not tied down if I want to move I pack up and move and guess what I get to do I get to rent out the place I had before it and the place that I'm moving to guess what I get to do I get to buy it again with home owner occupied loans cheaper financing thirty-year fixed-rate loans why not to me it's like free money you know you get a lot of people that jump up and down about all the returns they get and all the different investment vehicles or whatever but to me it's just shocking when you can go into real estate and turn you know a three and a half percent down payment or $150,000 down payment be coating 25% down or whatever into an instant net worth boost of a hundred grand or two hundred grand and over time even more because guess the other beautiful thing that happens over time tenants are paying off the loan prices and rents go up over time it becomes easier to pay off the loan you can pull out more debt if you want then you go shopping for more real estate as long as you're safe about it good news is if prices fall I don't really care because they cashflow I'm really never worried about going bankrupt now when it comes to buying real estate I almost always recommend you buy within 30 minutes of wherever you live because that's the best way to know what the good neighborhoods are when the neighborhood's become no longer good which bad neighborhoods are becoming good neighborhoods it's a great way to get good deals it's the best way to stay local and actually be able to communicate with agents and say hey I'm a local buyer I'm not some out-of-area investor and surprise surprise you will get better deals doing that the next place we bought is just barely within that radius it's about twenty nine minutes away from here and I'm too lazy to drive there so instead I'm gonna show you the before images of this property when we bought it you can see everything is trashed on the inside we had started ripping off the tile but the floors look like they're full of mold the kitchen scrapped the upstairs is crap the floor plan was okay except you know I didn't like this post in the kitchen which ended up being much more mature than I thought it would be there were a lot of things that I liked about the house and a lot of things I didn't like about the house the fact that it was within twenty nine minutes was just like the icing on the cake there's like it's still okay I guess is okay is still within my rule so we bought it and this is what we turned it into you can see that new kit channel walls are repaired the bathrooms are new we even did an addition to it we did this all with permits architects everything beautifully and at that place we bought for well under seven hundred thousand dollars and it just appraised with a nine in the front now I'm gonna tell you about a big mistake I made this one here and this is a house that I did go in with the intention of flipping and we not only replaced the sewer line but we replaced every single drain within the property we replumbed the house we did everything with permits super high quality work this house right here we ended up selling it which I really wish I didn't and even once we had signed the contract the buyers are like we want $16,000 for repairs we hadn't done the roof at that point that was the only thing we didn't do and we disclosed that that was because the market kind of started softening a little bit more like okay before we start doing roof work and spending more money let's sell it the only thing left to do is the roof and so even though we disclosed it to them they're like okay well now we want money for the roof and so what did I do well as much as I liked them and thought okay you know they're probably really nice great people I didn't want to spend money on a new roof because at that point we would have probably been losing money we already spent money on new concrete and new everything else and we went over here and I installed a for rent sign and said take it or leave it I'm giving you zero dollars I think he gave him like a few hundred dollars or whatever and smart for them they ended up taking the house because they got a really really nice house but to this day even though I didn't have to pay myself to sell it I still regret having to pay the escrow fees the title fees the other realtor and and now I don't have the house I don't have a tenant in there paying off my loan every single month like it's gone it's it's out of my life it's not mine anymore whereas if I had a ten in there in there I can be standing outside looking at it going every month you're paying off $500 of my loan thank you very much so I know at this point you might be thinking yourself okay well so we crossed the four million dollar portfolio mark and we don't have crazy amounts of debt where did the other portions come from well here's the next one see this particular house was on the market for $650,000 I actually tried selling it to some clients of mine and they said no way it needs $150,000 of work we're not interested in it well despite having ten offers from mostly home buyers and some flippers I came in offered more money than what the flippers were paying because I'm not flipping it so I don't need to pay as little as them and I can beat them and then offered better terms than what all the homebuyers were paying because they were all thinking well I need to have an inspection on this meanwhile I'm like you kidding me house is built in 2003 I can inspect this walking through it and call it a day and that's exactly what I did so I wrote the seller a check for $20,000 and said if I don't buy it keep the 20 grand bought the deal got it appraised is worth over seven hundred seventy thousand dollars now after we did maybe twenty five thousand dollars worth of work thank you very much I guess the people I showed it to the first time should have bought it now the other thing is I'm gonna put an arrow on it because of the tenants outside right now but you see that house there over my shoulder yeah that's actually the first house that we turned into a rental that we first bought that first fixer-upper I showed you pictures of it seems like they've pretty much been home all day so I didn't want to just walk up there with the camera anyway let's now come almost a full circle here and go to what is the last place on this five and a half million dollar portfolio we're sharing it's right here it's worth $600,000 and take a peek here it is you'll notice it's literally four houses from the one we first bought it's actually the same exact floorplan to so here it is this is just finishing with the remodel we got the new concrete the new landscaping the paint inside out so folks what are some big takeaways here I think the biggest thing is don't be afraid to start get some education honestly it doesn't have to be my course that's linked below if there's also a course there for real estate agents and rember you do get private livestreams twice a week you could also meet me in person next stop is Chicago but seriously what are some big takeaways well get started get educated get in the game once you're in the game it becomes so much easier to go to the next step the next step in the next step I don't feel like I'm super special I just feel like I kind of lucked into having basically the balls to go for the first one and after that everything was kind of a no-brainer because I became so used to and familiar with everything that why not yeah I also happen to be a real estate broker that served hundreds of clients buy and sell and invest in real estate but that's why I also have a course is because I know so much to help you do this stuff but anyway enough about that think to yourself what are you gonna do next make sure to meet me in a place like Chicago or Austin or Seattle or San Francisco the other next stops coming up on the I'm over at tour oh and in case you're wondering what that's a reference to that's a reference to over the lack of education in the real-estate world because everybody tells you crap like oh yeah you need to find 32 units gonna have to go figure out how to get partners and have an LLC because otherwise it's stupid to start yet ironically the same people that tell you that usually own the real estate they're living in and started by buying single-family stuff and made a lot of money from single-family and then moved into the big stuff think of it like a stepping stone where are we going now yeah let's do it [Music] [Applause] you [Music]

Channel: Meet Kevin

Views: 1,102,359

Rating: 4.8548875 out of 5

Keywords: real estate, real estate investing, wealth building, portfolio building, how to invest, beginner real estate, getting started in real estate, start real estate investing

Id: 6p06O4rW5fk

Length: 32min 36sec (1956 seconds)

Published: Tue Jul 02 2019