How I Made $250k Last MonthSeptember 10, 2020 by Paul Begich
Did the title of this blog get your attention…? I hope so!
This article is not about me, it’s about YOU!
The power of real estate is INSANE, and it’s a vehicle to success I’m extremely passionate about.
My intention in sharing this story is to get YOUR gears turning. By the end of this, I want you thinking, “Hey, this doesn’t sound all that crazy! I’m confident I can give this real estate investment thing a go!”
A couple months ago Emily (my significant other) and I bought a four-plex in the Whittier neighborhood of South Minneapolis. The two of us had a very specific goal for 2020 – buy a four-unit property in South Minneapolis with value-add potential using FHA financing. Seems simple right? Not quite. There was literally blood, sweat and tears shed to achieve this vision.
This goal was important to us for a whole host of reasons but namely, we want to create a life of abundant opportunity for ourselves, those around us, and for our future children. And when I say abundance, I mean abundance in EVERY sense of the word – abundant wealth, abundant health, abundant charitable giving, abundant relationships, you name it!
If you’re vibing with our “why” then keep reading!
We knew that creating a passive stream of income was an opportunity to get a little closer to creating a life of abundance. Segway here – the LARGEST monthly expense ALL OF US have is our housing expenses. In most instances this is roughly a third of our overall income – and for some it can be upwards of fifty percent of their monthly expenses. THAT’S INSANE!
We wanted to ELIMINATE this expense! One of the ways to do this is through “house hacking.” House hacking is the idea of living under one roof with a set of other tenants – either in a multi-family setting like a duplex, triplex, or four-plex or renting out the rooms of a single-family home to friends/family. We went the four-plex route.
I’m going to dive into the numbers here – I want to forecast I share these for two reasons
1) to show the POWER of real estate and
2) to show that ANYONE can do what Emily and I did.
After months of searching, and well over ten offers submitted we landed the ideal four-plex in the Whittier neighborhood of Minneapolis. We bought the property for $625,000. We bought it using FHA financing which allows you to put just 3.5% down as the down payment. I CANNOT stress this enough, when we purchased the property I had LESS THAN $10,000 in my bank account! I had no idea how we were going to fund this purchase – not a clue in the world! But I’m a believer that when you put your mind to something and you work REALLY REALLY hard, that life has a way of figuring itself out.
Once we took ownership of the property we put about $75,000 worth of renovations into the property – essentially, turning the units from dilapidated to gorgeously designed HGTV worthy masterpieces. We did this using other people’s money! Remember, I had less than $10,000 in the bank – there was NO WAY we could afford to do a nearly $100,000 renovation! I’m pretty sure we called every bank, hard money lender, and private equity fund in the state – but hey, all it took was one to give us a shot!
That brings us to where we’re at today at the time of writing this blog.
The property just appraised for $875,000. That’s $250,000 in equity through forced appreciation in renovations since the acquisition just a couple months ago. As in, WE JUST MADE $250,000!
And we did this with just a few thousand dollars in the bank account.
I almost forgot, the property nets us over $1,000/month. Emily and I not only have no living expenses but we are actually making money living here! The rent from the other three units exceeds our mortgage costs, property taxes, capital expenditure reserves, maintenance, repair reserves, etc. by over $1,000.
That’s pretty slick! Adding $250,000 to your net worth AND making over $1,000/month while living for free.
Are you hooked yet? This could be YOU. In fact, this is YOU! YOU can do this! Emily and I are not unique, we don’t have special abilities or super powers. We simply had a goal and a plan on how we were going to get there.
If you’re interested in doing something like the above – or simply learning more about the power of residential real estate I’d love to connect and learn more about YOUR “why!” And I’d love to be the realtor that helps you use real estate to help you better chase that “why.”
I’m always looking to connect – whether it’s over coffee at Spyhouse or a whiskey at Freehouse.
Shoot me a message today! I respond to EVERYONE!
Paul Begich | firstname.lastname@example.org | 952-847-3406 | @penthousepaul