Today I want to show you how I went from this single family property to 55 rentable units in a span of five years and how I did it using very little of my own money. And it starts now. I’m Jonathan Beasley, the author of seller Secrets How to Sell Your Hampton Roads Home for Top Dollar with great terms in the shortest amount of time possible. And more specifically, I’m your insider into the world of real estate investing. Today, I want to share my story with you because frankly, I’ve kind of kept it under wraps because it’s kind of weird to talk about money and that sort of thing. But I’m over that s### because I want you to give double middle fingers to poverty and to the man and to the working stiff life.
Started From the Bottom
So I started with almost nothing and ended up with a pretty decent rental portfolio, and it’s still growing. That’s the most important thing is I’m still growing. Now, it’s not to say that you need to follow my exact path because to be honest, for most of it, we were extremely aggressive. It was a stressful way to go. Every time I created a liquidity event, which is essentially refinancing or selling a property I would use almost every dollar to put back into real estate. So a metaphor like this would be being at the craps table. And every time you get a winning role, you push all of your chips back in. Don’t necessarily recommend it. It’s not for the faint of heart. And it’s kind of one of those things. If you’re going to be dumb, you got to be tough. But that said, there’s a lot that you could probably learn from our story. And the difference between what I did and going into a casino is that if you’re a savvy investor, you can tip the odds enormously in your favor. As opposed to being a victim of the house always wins philosophy. Now, as I go through this video, I asked for just please a couple of quick favors.
First of all, if you like this and this is helpful content please click the little thumbs up below the video. If you think this video adds value to the world or to you, just do us a favor. Subscribe to the channel. We actually are thinking about putting together a Facebook group where I give out advice to anyone that has deals, but I would need enough people that join and enough of a following to make that makes sense. So. All right. On to the story. Here’s how I went from zero doors to currently. 55 doors and still growing our story. And I say our is because my wife and my kids actually have been with us this entire journey. And the first one, it began with a house hack. So I say house hack in quotations because that’s essentially where you live in a home as a primary residence and then rent out another portion of it in a way to offset living expenses and or save money. So Rachel and I did this before we ever even knew that house hacking was a thing. And there’s three really cool things about a house hack. Number one, because we lived in part of the property, it’s called a primary residence. So we got a really good interest rate because the loans are different when you live in the property versus if it’s strictly an investment only loan.
So we had to bring very little money to the closing table. And it was a federally insured FHA loan which had great terms. It also came with the added benefit of being a 30 year fixed mortgage, which meant the monthly payment was lower than, say, a 20 year or a 15 year mortgage. Now there’s arguments to be made about which of those is more advantageous. But for the sake of early on cash flow and growing a portfolio, the 30 year note was great and this is something that you can do. Just talk to a lender, pick up the phone, call a lender, comment below. We could connect you with someone. Secondly, we were there for almost half the cost of our actual mortgage.
So you see the mortgage payment that we had was like 1211 dollars a month or something like that. But we had this detached garage. It was an oversize two car detached garage with a room above that. We finished ourselves actually it was already finished and we bought it. We just kind of cleaned it up and fix it up, made it look pretty. The people that we moved in paid us over. I think it was like $650 a month. So it was over 50% of our actual mortgage payment cut it in half, which was a big deal for us. And I truly credit this very first house hack years ago as the genesis of what is to become hopefully a future real estate empire that maybe our kids will inherit or our grandkids will inherit someday. The third reason the house hacking is so cool and it’s a great way to start, is it gave us hands on training of being landlord. We had someone living in our backyard, and if there was an issue, they would call us. It was kind of like riding a bike with training wheels because we lived there and we were Johnny on the spot with any issues that came up. And there was a lot of growing pains, but it made it easy to be right there to fix any issues as they arose. We had an insane level of commitment to become financially free through real estate investing. So if you’re thinking it’s kind of crazy to turn your backyard into a rental property, you’re not wrong. There were times where it was stressful and weird, but we were committed to doing whatever it took to begin growing our real estate holdings. So after a couple of years of experience as a landlord, and beginning to understand things like leases and tenant and landlord law.
Understanding the Game
What’s the best way to collect rent? How do you track your books and so forth. We really started to fall in love with the idea of rental properties and cash flow. That is the money that you bring in in excess to the actual expenses of the property itself. That first property gave us an immense amount of confidence to know that we could certainly do more. I mean, if we could acquire one unit, we could acquire and manage another unit, right? And start moving towards financial freedom. Didn’t seem like rocket science to us. So we set out to start buying more properties now. This is back in 2016, about five and a half years ago. And the market has essentially been in an upward trend ever since and frankly, it still isn’t showing any signs of retreat yet by any significant indicator that I can find. So that’s something to take note of. So we started pretty much devouring any content that we could on investing and cash flowing properties. I discovered a couple of things. First of all, adding a partner to a deal could really help in getting a loan where we couldn’t. Your debt to income ratio is something that all of your lenders are going to look at. So bringing in a net worth partner or someone that looks really good on paper can be extremely helpful. And secondly, we can buy a fixer upper property with short term money.
Listen to me because this is actually the biggest key in this entire video. We use a hard money loan or a private money loan and then rehab the property rent it out. And then from there refinance into a low interest fixed loan and pay off the original hard money loan. Later, I find out that this strategy actually has an acronym known as BRRR So the BRRRR strategy, I think BiggerPockets coined that term, and to this day it’s a strategy that many savvy investors, including myself, continue to use. I’ve used it over and over and over to build our portfolio, even graduating out of smaller single families and smaller multifamily into apartment investing. But I digress. Let me get back to the store and the process of how we got to where we are. After that first house hack we saved up some money about $50,000. And that’s when I consider that our actual investment journey really began because we went from living in a property to actually purchasing property that was investment purposes only.
We BRRR’d property, we BRRR’d that first house and we use the proceeds to buy another single family and then another single family and patiently waiting to find the very best deals we could. Because at the time I was super scared of making a mistake. And in hindsight I was probably too scared and I might have actually robbed myself of some of the joy of the process because I was stressing out all the time about pushing all those chips back onto the table. I knew that we had limited capital, but I think I took it to the extreme because what I know now that I didn’t know then is that real estate is extremely forgiving and here’s why real estate goes up over time, rents go up over time, values go up over time, but your debt goes down. Not to mention there’s some great tax benefits to boot. You essentially have all four levers working in your favor when you invest. So as we continue to do this over and over, after some time pass, we begin to develop a sort of reputation here locally in a good way as being savvy investors that knew what they were doing and treated their private lenders and partners very well. We always made sure that the people that loaned us money made their money first.
Getting into BIGGER Units
So fast forward to last year, we had the opportunity to purchase a 15 unit property in Williamsburg, Virginia. It was in extreme distress termites, roaches, you name it. It was disgusting when we bought it. So guess what strategy we use? If you guessed BRRR you’d be right. We’re almost all the we’ve done with our renovations of the property. The units, the final units are getting renovated. We’re leasing them up and we’re going to refinance, pay back our short term lender and then hold the property long term. And keep the cash flow all the proceeds that we’re gonna get. Guess what we’re gonna do with those pushing back into the middle of the table and go buy another property. So at this point, we’re five years in. We have 35 units, no 33 units that under ownership and now have our largest property to date under contract. We have a 22 unit apartment and you guessed it, it’s a reposition.
It’s going to be a BR by the way. BR means buy, rehab, rent, refinance and repeat. So when we close on this property, we’re gonna have 55 doors under management with another 14 unit condo deal in escrow that we plan to close on over the summer. So at this point, some of the properties we bought five years ago, we’re now starting to sell because of appreciation. We’ve seen so much appreciation that it’s our best move to go ahead and sell them, take the equity and begin to redeploy that capital. So we’re starting to look at other avenues to invest, particularly we’re interested in Airbnb vacation rentals in areas that we think are going to show strong demand over the next coming years. While my initial goal was to get to 100 units and that’s still sort of a goal of mine, really my primary focus at this point is to get to a certain monthly cash flow number so that Rachel and I can live life on our terms. And life on our terms means absolute freedom and mobility. Something that COVID showed us is the fact that the world is probably much closer to being extremely mobile than we ever thought possible.
And working from an office really is a bit of an outdated, particularly in certain industry segments. So having a place in a warmer climate, let’s see clear water, Florida or somewhere down south so that we can hang out for there a few months in the winter sounds really good to me. And guess what? Once we get there, we’re not going to be done. So why do I share the story with you? It’s not to brag, I promise I get no pleasure out of like showing off or anything. Well, maybe I get some pleasure, but that’s not the point. One primary reason I do this is because sometimes it can be really hard to see how, like, one deal or two deals at the beginning of a journey is going to lead to any sort of financial freedom or or wealth at all. But matter of fact, I’m trying to get D-MAC into investing. I got to keep pulling him along because he’s busy writing the books and doing all this creative stuff. But eventually I’m going to get him into it.
Final Thoughts
And here’s the thing. It’s hard to get moving momentum is difficult. It takes a ton of energy, and you have to crawl before you start walking. But once it goes, once it picks up speed, it can get there easier and faster. One turns into two, two turns into four, four turns into ten, ten turns into 55. And I don’t know what the future might hold for me and Rachel. So if you’re the beginning of this journey, I hope it gives you some motivation to continue pushing through, to keep learning and to keep growing even when it’s hard. Just do something every day to work on your investing business and you’ll eventually get there. I have a friend that’s an expert level black belt, jiu jitsu practitioner and instructor, and one of my favorite comments that I’ve ever heard him say is this A black belt is nothing but a white belt. They just never gave up. If you like this video again, please it the thumbs up comment below if you have a question and by all means, subscribe. I’d love to connect with you. I’m trying to connect with a thousand new investors to inspire people to begin their own wealth building and financial freedom journey. I’m Jonathan Beasley with that That Fit Team professionals in real estate and passionate about people. See you next week.