My Story

My story begins in 2005 when my wife and I moved from Iowa to the Minneapolis MN area. While in debt from college, a wedding, and vehicles, my wife and I lived in the basement of my mother and father in law’s house for a year and I was motivated to earn extra money. We did get our first house in 2006 and financed it 101%; we not only got the key to our first house that day, but also received a check at closing. Crazy times just before the housing crash. We started our careers entry level like everybody else – myself as a web developer and my wife as a project manager. Being motivated to earn extra money on the side to get our first house, I created an ecommerce company and website that sold (drop shipped) nutritional supplements. Anything your local supplement shop had, we had available on the site. The company did well for a few years, and then once Amazon grew in popularity, we could no longer complete, and I sold in 2010 for $45,000 (pre-tax). It’s 2010 and having just sold the business and with our second child on the way, our first home was too small and we were stacking things vertically in every room. I asked my father what I should do with the proceeds from the business sale, between these two options:

Pay off the second mortgage on our starter home that was at 12% interest rate.
Or, put the money towards a larger home for our growing family so we could be more comfortable.

My father said I should ask one of his friends that had done very well for himself, so I did and he recommended a third option – put the money into real estate investments. This man became my real estate investment coach for years and was a Godsend to us. He wasn’t into the numbers or details but spoke about the big picture end goal and dream as he lived it – he had enough rental property income to just live off that and travel all year. I knew nothing about real estate investing and had a lot of anxiety about risking so much money. I didn’t want to add more stress to my wife and I as we both worked full time, had two young dogs, two infant children at home, and I already did side work as a programmer / web developer, and now considering adding a rental property on top of all that while staying in our overstuffed small house. My father told me “don’t do it, it’s too risky. If a water main breaks you’re out thousands of dollars.” I remember my mentor telling me, “Nick, you need to live today like nobody else, so that someday you can live like nobody else.” While I loved my dad, he wasn’t a real estate investing expert and didn’t understand all the ways real estate pays you in addition to cashflow. At the time, neither did I, but I knew I didn’t want to be working until 67-70yrs old like the government has us on track to do with their retirement age. No thanks. With my wife’s support, we sacrificed comfort and anxiously made a leap into doing this and started shopping for our first rental property, and then disaster – I was fired from my job.

Employment

My career working full-time for other companies was challenging. As a left brained analytical person, I was a perfectionist and early on probably too outspoken with my good intentions to make the world a better place. Others didn’t always see my good intentions. Losing my job in 2010 wouldn’t be the first time this would happen during a rough few year stretch, and it’s very humbling experience. It’s one of the worst feelings as a father – to come home from work carrying a box of your things and to look at your wife and your little kids and tell them you’re without an income and unable to support them. At this time, I developed anxiety, specifically around work and the potential of being unable to make employers happy and ensuring I could provide for my family. I had terrible stomach pains whenever I’d go to work, and the meds I was put on created other undesirable side effects. Sometimes people get into a position working for a company and their culture that just isn’t a good fit, and that’s OK. Sometimes it takes a few tries to find the right one.

First Rental Property

Within a few weeks I was back to work and we were again shopping for our first rental property. By then I’d read many books and had spreadsheets, charts, budgets, and plans extending 10 years into the future of how to get out of the grind of working for other people, and it centered around real estate investments. The first investment we purchased was a duplex about 10 minutes from our house. It was in rough shape, and the inspector old me to pass on it, but I was “seeing stars” at the time and bought it anyway against his experienced and advice. Within the first month both tenants moved out and with their stuff out of the house, it became quickly evident how rough shape the house was. Everything needed to be replaced (Flooring and paint, kitchen cabinets, appliance, furnaces, AC, windows, doors and door hardware, faucets) – Everything. I had only 18K left to work with, so a few grand went into the bare minimums to fix it up and get two new tenants into the duplex at rents lower than were possible with a fixed up unit, and the rest went into purchasing a single unit (one side) twin home. The cashflow from this property was needed to help pay for repairs on the first duplex.

Sacrifice and the Start of Something Great

My wife and I continued working hard, and I worked evenings and weekends doing contract work for extra cash. My fulltime job was close to home, so we sacrificed and sold our newer Ford Edge vehicle and I bought a cheap 12 year old vehicle to drive to work. This was $400 per month more that we could put into our investments. The next year we purchased another single unit twin home, and the following year a single unit town home. In 2015 we had 5 rental units and equity – we had more equity than cash, and my real estate investment coach advised me on how to use equity to buy more rental properties. In 2015 we acquired a four-plex in a rough part of town with zero dollars out of my pocket. It was amazing! I have stories… drugs, guns, domestic issues, you name it. I learned a lot managing this one. In the years following we acquired another duplex and a couple fourplexes as we continued working full time and myself on nights and weekends. Against all financial advice you’ll find and hear, I withdrew my 401K and invested in more rental properties. I knew we were on track for something great with real estate and it was working. It didn’t make sense to keep this 401K, which was earning lower returns, without being able to withdraw the money penalty free until I was 70.

Became a Business Owner

2014 – 2017 I worked for a great company as a technical lead and was off the anxiety meds, until the culture changed in the final year and I was again threatened with my job. The good news is, real estate income provided me with choices, and this time I chose to quit and use equity in our rentals to help purchase a competing business that was for sale. I’d had it with being employed and having somebody (your boss) have a ton of power over me and my family’s life, which I’ll write about in other articles, and took the plunge into owning a small website design and development company with a staff of 8 people. After purchasing I learned the company needed a lot more work than I expected. The previous owner exited after the first month, and then two of the main staff members, the account manager and lead developer, quit a month later. I had to go back on the anxiety meds. I worked 65-70 hours per week for the first year just firefighting and solving problems, then less as things improved. Persistent hard work and investing in the company by creating processes and building tools to automate routine tasks and increase accuracy, creating documentation and standard operating procedures to minimize human error, and hiring great people all contributed to the transformation into a great company. The company was doing very well after two years, and the income along with equity from our existing portfolio allowed us to purchase 4 fourplexes (16 units). After four years the company had grown by 250% and I felt it was the time to sell, but not without a plan. The proceeds from the business sale could purchase enough real estate that my wife and I would be financially free and “retire”, assuming we could live within a new budget and our means. Purchasing and turning around this business was the most difficult and stressful thing I’ve done to date, but it was also one of the most rewarding.

Real Estate Purchases Get Larger

In 2022 housing inventories were at an all time low. Four-plex’s for sale were nonexistent, and duplexes and any multi-family properties were way overpriced. The best cash on cash returns were with single unit town homes believe it or not. Buying one town home here and another over there would have been a long and slow process; it might have taken two years to buy enough of them to invest the proceeds from the business sale and make us financially free. Fortunately, I found a new housing addition in a nearby suburb that had 16 town homes remaining and available, and we made a deal to purchase them. Buying new construction created many more lessons learned on my journey, but overall, it was a great investment. My wife retired from work and I sold my business in January 2022 as these homes were being completed. After a few years of giving the tech business everything I had, being stressed and out of shape, I looked forward to the next phase of life where I could focus more on family, faith, and health.

A New Life Experience

No longer is work on my mind nearly every waking hour, and when my kids talk to me, I’m present and listening; my mind is not thinking about work or other stressors. When my wife and kids are having a rough day, now I’m present enough to notice and do something about it. My daily routine is very different than before – I drive my daughter to private school (family time), then go to the gym for a couple hours (health time), do what I want (yes a hobby), home projects, or focus on real estate investments mid-day, more family time when the kids get home, then read and watch YouTube videos to strengthen my faith. Living off predictable rental income is a piece of cake compared to working full time or owning a business; no more anxiety meds needed.

We have much less stress now, which is also great for your health. It’s difficult to measure the effects that stress has on your body, but they’re huge. The home projects and “unlimited” vacation days available presents a new challenge – setting a new spending budget and sticking to it. After about 8 months of “retirement” and decompressing, I was ready to start adding value to the world again, and what’s better than to follow my passions in real estate and help others achieve their dreams. Hope you enjoyed reading about our journey to financial freedom and a new lifestyle and would consider letting me help you achieve your dreams.