In 2021 I wrote a three part series on my real estate journey. Since it’s been five years I thought it could be a good idea to write a fourth post since things have changed quite a bit since that last post.
First, a recap of the first three parts of the real estate journey.
Part 1 centered on the years 2004-2010. This was the time when I bought my first rental properties. It was also the time when I first got into flipping houses. I was reminded as I read back over this post that the show Flip This House had premiered in the summer of 2005. To say that I was intrigued would be a major understatement. During these years I had a lot of excitement. But I was also very naive. By the end of this time period I owned five rentals (all at 50% ownership).
Part 2 centered on the years 2010-2016. These were the difficult years. It was the years where my naivety led me to some bad decisions, and it took place during those most crucial years when we had little ones. There was so much stress. But I learned how to work hard. Not always smart, as that would come later, but definitely hard. It was also during this time that I began building my real estate agent business. By the end of this time period I owned seven rentals (three at 50% ownership and four at 100% ownership).
Part 3 centered on the years 2016-2021. I made it through the difficult years and entered a season of growth. Along with my partner, I bought, renovated and sold 12 houses during these years. And halfway through this time we switched from flipping to holding. We saw it as moving from making income to building wealth. It was also during this time that I retired from vocational ministry and was able to put more time into the business. By the end of this time period I owned nineteen rentals (fourteen at 50% and five at 100%).
During this time the goal was growth. I had gotten good at identifying properties with potential, I had a great team of subs, and I was able to access capital. But I never stopped to ask, “What does enough look like?” It was common in real estate investing circles to be asked the question, “How many doors do you have?” I rarely ever heard anyone question whether more truly equaled better. Success seemed to be equated entirely with growth.
Around this time I began thinking and writing about Life Design. I began asking a lot of questions about what I truly wanted in life. And then I started trying to build my business around those goals. I recognized that I had previously been building a business without ever asking what the end goal was.
I ended that post by talking about the events that led me to start thinking about what it would mean to have a few paid off rental properties producing monthly cash flow for us. I then started a debt snowball to begin that process.
And that brings me to part 4. These are the years 2021 through today.
I am really happy with where things stand today, but it was all due to the fact that I paused the building for long enough to ask some really deep and meaningful questions. I began listening to contrarian voices, and I had some great conversations with Mandy and with my business partner.
I’ve come to believe that clarity is a powerful thing. Like wisdom, it’s meant to be pursued. Whether it’s an open or closed door, it takes an option off the table. And that’s important since so many of us suffer from a paralysis of analysis. Gaining clarity around vision led to decisions that brought a lot of fruit.
I started the debt snowball in January, 2021, and I paid off the first property in December, 2023. It was a great feeling to be sure. I felt a sense of freedom. This past year I was able to accelerate things. I sold several properties, and all of our vacant lots, and this enabled me to pay off all but two of those 100% owned properties.
As of today I still own nineteen rental properties ( fourteen at 50% and five at 100%). That is more than I want to have, and I plan to sell more in the coming years. But I have simplified things in a lot of ways. A year ago I was managing over twenty properties. I got pretty burned out, and so last fall I turned almost all of those over to a management company. I now manage the five properties that I own 100%. I really enjoy the current pace of life and work.
One of the big aha moments over the past few years came when I realized that just a handful of paid off rental properties can supplement retirement income in powerful ways. Through the help of our financial planner at Creative Planning I figured out that five paid off rental properties would yield around $60k per year. That’s not enough to retire on, but what it means is that as long as I own these, I will need to dip less into our retirement funds, which means that they will have more time to compound.
I’m grateful for the role that real estate has played in my life. It’s been something that I’ve enjoyed doing these last two decades, and it’s been a powerful vehicle in moving us towards financial independence.
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