How This Couple Works 5 Hours/Month for $120k/year
James and Emily share their real estate story
We’re diving into a highly-requested topic today: real estate.
How James & Emily Earn $120k/year in Mostly-Passive Income as Real Estate Investors
Can you tell us a little bit about you? What does your day-to-day look like?
We’re James and Emily, real estate investors in our early 30s. We’ve been living off of real estate for 4 years now.
Our day-to-day varies, sometimes we’re traveling, other times we’re working on some of our projects doing renovations. Most of the time we’re hanging around during the day doing whatever we want to do.
We also share our life as real estate investors on our Instagram, Rethink the Rat Race.
During an average week, how much time do you spend on your real estate?
We spend around an hour a week managing short-term rentals (STRs) and an hour a month managing long-term rentals (LTRs). We didn’t want to create jobs out of investing in real estate, it was meant to free up time.
How did you get started in real estate investing? What sparked the initial interest in investing in real estate?
I [James] was predisposed to real estate after reading the 4 Hour Body and the 4 Hour Workweek. I liked that he had these hacks around working and optimizing your time. As a part of this, he mentioned real estate as a passive income source.
At the time, I was a manager at a gym making $12 an hour, so I looked at BiggerPockets. I thought about how I was making so little, living at home, there was no way I could do this. I ended up letting my limiting beliefs get the best of me, and I quit looking at real estate entirely.
A few years later, when Emily and I got married and were making decent money, we learned about the FIRE (Financial Independence, Retire Early) movement. We decided then that real estate would be what we would go to to achieve FIRE.
How did you get over that limiting belief?
The first property we bought was $47k, which helped. It was in a shitty place, and it was a shitty property — to the point where we almost didn’t get out of the car when we drove up to it. What we would’ve lost in that situation was the $12k down payment, so we figured it was a good way to try it and see how it worked out.
We also knew we had the exit strategy of selling the property. So that, in combination with picking the cheapest way to try it out, worked well.
How did you save that down payment?
At the beginning, we didn’t have a lot of extra money. We were focused on outward appearances, living in a fancy condo in a fancy area.
But when we found out about FIRE, we moved to a cheaper condo in a cheaper area. That gave us enough runway of monthly income that we could put toward buying an investment property.
How did that first property go?
We owned the property for 4 years. It stayed rented out the whole time we owned it. After one of the tenants moved out, we decided to sell it since we weren’t interested in replacing the tenant. We ended up making around $90k on the sale.
When did you know it was time to invest in the second property?
We weren’t creative with our financing; we were oblivious to the options. Once we saved up enough for another down payment (20%), that was our signal to buy another property. The more we saved, the nicer the property we could buy.
We went under contract on our second property — a 3 bed, 3 bath with a mother-in-law apartment — around 8 months after the first property. The tenant in that MIL apartment turned in his notice while we were closing, and at the same time, two other properties popped up.
We initially planned to put 20% down on our second property, but because we wanted properties 3 and 4, we ended up moving into the MIL apartment in property 2 so that we could qualify for owner financing. That allowed us to have enough to put money down on all four properties. So we went from 1 to 4 properties in the span of a month.
Was there a certain number of properties you wanted to reach? How did you know how fast to move onto the next property?
We were just flexible and taking the deals as they came. Living frugally and having the money for deals made that possible. Once we hit the number we needed to live on, we weren’t in the mindset of “let’s do whatever it takes to get a property.”
Our most recent deals were chosen because it was the right deal at the right time.
How far into investing in real estate were you able to quit your 9 to 5s?
It was around 3 years from when we decided to pursue FIRE to when we quit our jobs, but 2 years from when we got our first property.
We lived frugally which helped accelerate the timeline since it gave us more to put towards properties.
What does your business look like now?
We have 10 units right now. We have 2 strictly medium-term rentals, 4 short-term rentals, and 4 strictly long-term. Our goal has been half and half; we don’t want all of our eggs in one basket. We view LTRs like our bonds and STRs like our stocks. We also look at each property and think about what would work best for it — is the location good for a STR? Or would it work better as a LTR?
What were you making before? What are you making now?
Before, our combined income was around $115k. Our first year living solely off real estate, we made like $40k, but we had a few years of expenses saved up. Last year, we made $120k. It’s grown every year.
What advice would you give to someone who wants to get started in real estate?
There are some people that seek too much information. They focus on obtaining more and more information rather than deploying it. Don’t let the fear hold you back. More information doesn’t make the decision easier.
3 new gigs this week! For more jobs like these, check out a full list here.
Brett is looking for freelance writers with knowledge on cannabis to write about cannabis credit and collections.
Rent out camera equipment to local creatives.
Layer is looking for someone to create social media videos and run their page. Budget is $500 to $1,000 (assuming per month?). Sounds like a solid opportunity for someone that wants to dip their toes into freelancing social media.
Want to see a specific type of work? Just let us know.
Opportunity to Interview with Fast Company
A colleague of mine is a writer for Fast Company. She’s looking for Gen Zers that have switched jobs recently and increased their pay. If this sounds like you, leave a comment on her post or shoot her a DM!
See ya Friday,