Snowballing $20K Into 11 Rental Properties in Under 4 Years

Ashley:
Ever wonder how you could just take $20,000 and turn it into a portfolio of 11 long-term rental properties? It might sound impossible, but our guests today did exactly that and they’re here to break down how they made it happen. If you’ve been looking for a game plan to grow your real estate portfolio in a strategic way, this is the episode for you. This is the Real Estate Rookie podcast. I’m Ashley Care, and I’m here with Tony j Robinson.

Tony:
And welcome to the show where every week, three times a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. Now, today we’re going to discuss why moving to a lower cost of living area could supercharge your real estate investing journey. We’re going to talk about how to pull equity out of a property that you already own to help you scale faster, and we’ll also talk about how to grow your portfolio in under five years. So welcome to the show, Brian Field. Brian, we’re super excited to have you here. Thanks so much for joining us today, brother. Thank

Brian:
You guys. Ashley, Tony, good to see you and super excited to be here and chat with you.

Ashley:
Ryan, I was looking over the guest form that you filled out and it says that you have 11 properties. So let’s start with how long have you been investing to amass this portfolio?

Brian:
Yeah, so I think really the start of everything was three and a half years ago, just over that in January, 2021, my wife and I decided to move out of California to Arizona and we bought a primary residence and the goal there was to be boots on the ground in a lower cost of living market and start our investing from there. At the time, that wasn’t what I thought was my start of my investing career, but today that property that was our primary is now actually a rental. It’s one of our best performing rentals in terms of cashflow and appreciation and then has also helped fuel. We’ve used the equity in that house to now snowball that into the rest of our rental. So technically speaking about three and a half years ago is when I got started.

Ashley:
And when you first started out, why did you decide that real estate was going to be a path that you chose, such as keeping this house as a rental? Why did you decide on real estate instead of other paths to build wealth and financial independence?

Brian:
I think it was a lot of trial and error. I did try stock trading and investing in the stock market and what led me to pursuing investing in general was kind of just some failures in the job market myself out of college and finding that it really wasn’t what I thought it was. And I started out of college wanting to have a high paying sales job and make six figures and I would work till I was 65. And that’s all I knew really. And I think failing over and over in some of these jobs, you should have seen my resume. It was very long with less than a year at each position and I just felt so bad about it. I went down a rabbit hole on the internet. I found different avenues of investing stock markets like I mentioned, but ultimately stumbled upon BiggerPockets. And as most people that listen to this show come to learn, then you start drinking the Kool-Aid with BiggerPockets and the rest is history. So that’s really where I got my hook onto real estate and made a couple of bold moves and found that it could work for me and stuck with it. And here we are today, still early in the journey, but well, on my way.

Tony:
Brian, you said that initially the goal after college was to get a six figure job work there till you’re 65 and then retire. It sounds like maybe that goal has shifted a little bit. So I guess if we zoom out 30,000 foot view, what’s the bigger goal for you now as it relates to investing in real estate?

Brian:
To buy back my time, I still have a W2 job and while it is aiding my ability to buy real estate and I’ll continue to use that lever as long as I need to, but really the goal is to be able to have enough passive income, retire my wife, retire myself, and be able to do the things that we want in life and not have to be tied ball and chain to coming to work Monday through Friday. It’s truly just buying back our time. So that’s the goal really, is to have that freedom.

Ashley:
So now that you’ve kind of put this plan in place, what is the first step that you actually take after you find BiggerPockets, after you’ve engulfed yourself in this information? What is the first step that you took besides just your research after you started learning about real estate investing?

Brian:
Yeah, coming from San Diego, California, very high cost of living market mentioned kind of the struggles with the jobs and the low income that I had and sometimes working two jobs restaurants at night and some form of a W2 during the day. But I did find and discover out of state markets and started researching online of lower cost of living areas. And I kind of put two and two together and said, well, how can I not venture so far to some of the Sunbelt cities like Florida or really far from California and how can I stay somewhat close but also kind of make this leap? And it really just came down to looking at some numbers. And I had a friend living in Arizona who was interested in investing as well. And it took a couple of weeks, months to convince my wife and she was on board eventually, and it came with a few tears from family members, but we decided that with the income and the savings that we had, that we could be boots on the ground in Arizona. It’s not so far from California that we could come back and visit. And it seemed to have worked for us pretty well. So that was kind of our first venture off into real estate was to move and try it out.

Ashley:
So right there is a huge step deciding to actually move for your first real estate investment. And it’s so funny, we have a friend James Dard, who literally just moved from California to Arizona also for a new primary residence and also great tax benefits going from California to Arizona too. So when you’re taking that leap and you’re making that decision, you talked about having a friend in that market and I think that is such a great opportunity. And if someone is really struggling with they got to invest out of the state, their market they’re looking at they live in right now is too expensive. That is such a great starting point is look at where you already have a boots on the ground, somebody that can help you with information, maybe even somebody that could go look at a property, somebody you trust, but somebody at least that has some knowledge of things that you would not know just from going on Google Maps and looking at the data of the property in the area too. So you need help trying to figure out your market. Take a look at what are markets you already know, maybe you grew up there, maybe your husband grew up there, maybe you have a friend that lives there that can help and guide you. I think that is great advice as to getting started with choosing a market. Tony, I already know that you are probably chomping at the bit to talk about the spouse piece here of getting the spouse on board.

Tony:
Alright, after a quick break, we’re going to hear more about how Brian grew his portfolio to 11 properties after almost a $100,000 mistake. Now if you are looking to grow your portfolio to, you’re going to need to find the right market to invest in, head over to biggerpockets.com/find a market to find the perfect market for you. Alright, welcome back to the show. Let’s hop back in with Brian reading in my mind Ash, because I think Brian, one of the questions we get often is, how do I get my spouse on board with the idea of investing in real estate? And you took it even one step further where not only were you able to get her on board with the idea, but you guys literally picked up and moved to a different place. So I guess you were the one, like you said, drinking the BiggerPockets Kool-Aid and reading all the stuff and listening to the podcast and watching the YouTube videos. How did you actually get your wife on board to say, Hey, we’re going to upend our life to lay the foundation to start investing in real estate?

Brian:
I guess there’s no real single way to put it, but I painted the picture. I had taken the things that I’ve learned from the podcast and the books and even showed some examples, but I just painted the picture of a better life that could be if we were to take a leap of faith. And worst case scenario was that we could have just moved back. And I think she was just super supportive. I didn’t have to pride that much honestly, but I think just being able to communicate well and lay out the pros and cons and discuss ’em together and just come to a conclusion together that it makes sense. And so that was really all it took. And like I said, she’s super supportive and was on board and I think the hardest part was convincing some of the family members that it was a good idea more so than my spouse. So we made it work. Well,

Tony:
I appreciate you giving us that insight, Brian, because again, there are a lot of folks listening who would love to get that first deal, but the spouse maybe is, I don’t want to say an obstacle, but they’re a little bit more hesitant than the folks that are actually listening. So it’s always good to get that insight. So Brian, going back to your story there, brother. So you guys pick up, you move across state lines, you land in Arizona. It sounds like maybe that first deal was actually the primary residence that you moved into. So talk us through maybe how that primary house ultimately turned into an investment for you. Yeah,

Brian:
A little bit of luck. I think. Like I said, we bought the house January, 2021 height of Covid, Arizona was actually one of the markets that had some of the highest appreciation in the country around that time. And so we got a great deal on a great house in an A neighborhood. And from 2021 to 2022, I actually didn’t buy anything. We just were saving our money, increasing our W2 income saving and kind of game planning with that friend of mine that I mentioned. And we ended up doing our first two deals together. But we were just able to buy right and get a little luck with the market. And we ended up gaining quite a bit of appreciation, which is what we tapped into a year later to really help us buy our next, or you could say our first true investor deal after that,

Ashley:
What an opportunity to start with your investing is to turn your primary into a rental property at some point, but also start amassing other rentals. So kind of walk us through as to, you’ve gotten to 11 rentals, so from then until now, what are the different ways that you’ve been able to fund and finance these properties? Because it all sounds great and wonderful, but how can you actually pay for these rentals that you have?

Brian:
Yeah, a combination of things. So first and foremost, we hustled with our W2 jobs. We moved to Arizona, weren’t making that much. My wife and I are in travel nurse staffing. And for anyone who doesn’t know, there was a huge demand in nurse needs across the country for all the hospitals. And so naturally our business in income was lifted with that surge in demand as well. So we were able to really grow our W2 income, and I think that’s kind of the foundation of we were able to save in our time in Arizona with a lower cost of living from compared to California. And then the second piece, which is pretty unique strategy that we tapped into was the appreciation of that primary residence. We were able to get an appraisal a year later. Like I said, that thing skyrocketed about 150,000 in equity,

Ashley:
Oh my god, in one year.

Brian:
And so we took out a heloc and that HELOC, along with our personal savings was our initial source of funds. And so from there we can talk about the first couple of deals, but that was really, it took us that whole year living in that house to ride that wave up.

Tony:
Brandon, I just want to quickly pause in the HELOC because there may be some folks in the audience who aren’t familiar with what that is. So can you describe what a HELOC is and how much of that equity you were actually able to tap into

Brian:
Heloc home equity line of credit? So it’s different from a cash out refi where I didn’t have to change my interest rate on the home and get a whole new loan on the home. They just were able to go in and appraise the current value and give me a spread of what my loan was on the property against what equity I had. And I think the bank at this time, I don’t think this is still a thing these days based on the way interest rates and all the chaos that’s gone, but we were able to get 95% loan to value at that time. And so they said, okay, you bought your home for 3 95, it’s now worth five 50. And so we were able to, I don’t know the exact percentages here, but we got a line of credit for $135,000 that was just free access for us to use. And payback, obviously payback. That was kind of our best tool that we’ve been able to put into play for investing into other deals.

Ashley:
So were you using this to make the purchase and then you’d go and refinance and pay your line of credit back? How were you actually utilizing your savings and the line of credit?

Brian:
At first, the goal was to flip two houses using our line of credit, and we used hard money lending as well, but that was kind of like our down payment was the line of credit, the hard money was the rest of the funding and then also using the line of credit for those renovations. And so our very first deal, we did exactly that. We used our HELOC to fund the down payment. We partnered with a hard money lender. We brought in 15 20% on that down payment. I think that first flip that we did was purchased for, it was about three 50 or so that we purchased it, but we were able to rehab it, we sold it, and it was actually a successful flip. We made about $27,000 in cash, which we paid back our HELOCs and then still had that $20,000, $27,000 nest egg to help roll into our next deal. So that was the plan. And then I guess we can get into a little bit later, but my strategy has switched a little bit, but initially, yes, we were going to flip, pay back the HELOC and use cash to deploy into rentals.

Ashley:
What a great way to build capital. And congratulations making that much money on your first flip. That is awesome. So Brian, before we get into the next step of your phase, now that you’ve flipped your first health, and is this where you start the transition into rentals?

Brian:
Not quite. So I mentioned our plan was two flips in a rental. So we had that first successful flip where we netted the 27,000 paid back our HELOCs, and we had this wave of confidence and we’re like, we’re doing this again. So a few months later, my business partner and wife at the time, and we found another house right away. And so the second house was also a flip. And this is an interesting story because this is the same way that I said Arizona went up. It also went down. And so this is kind of a huge learning experience that I’m happy to share, but we kind of upped our Annie a little bit. We had a little bit of a bigger house, a bigger purchase price, a bigger renovation on this particular deal, and turns out that it was a beautiful rehab and remodel, but it took about three months.
And during that time is also when the market started to shift downwards a little bit, we saw some interest rate hikes and some consumer sentiment changes and things like that. But we had gone from thinking we were going net $40,000 on this deal to losing 75 to a hundred thousand dollars. And so at that time, we had to make a decision, are we going to list this house and lose the money and carry that money on our HELOCs too, mind you, where we would still have to make payments beyond that loss on the interest of that debt. So we actually pivoted from there and decided to furnish the listing or furnish the house and actually turn it into a short-term rental. The remodel again was so beautiful. We had a pool this big backyard and just thought, let’s not lose this money and let’s just take our earnings from the last flip and furnish it and turn it into a short-term rental. So that was the second deal, and we held that for a year, which we actually just sold a couple months ago. But during that year, it kept us afloat. We were constantly booked, we made some money, but I think overall we broke even on that deal. And then once the market started to kind of ease up a little bit, we actually sold it for just a little bit lower than what we anticipated the first time around. And so that was kind of where the second deal ended up.

Ashley:
And you ended up making money off of the sale?

Brian:
We essentially broke even. We did sell it.

Ashley:
Oh, even with the sale, okay.

Brian:
Yeah, the sale after a year of holding it pretty much broke us even because we still had holding costs and while the income of that property, it was there, it didn’t make as much as we had hoped. I think maybe due to some short-term rental saturation in the Arizona market in particular. But it definitely floated us and saved us from catastrophe to be honest.

Ashley:
Yeah, I mean, this is why I think it’s so important to think about what your exit strategies are, and you were able to take this property that was going to be a flip, and instead of a losing a hundred thousand dollars, you went and you changed and you pivoted your strategy. And I think that as a new investor, you have to understand that that might happen because the market can change, especially if you are flipping a house, making sure you have some kind of option of what you can do with the property afterwards. And Brian went from about to lose a hundred thousand dollars to breaking even within a year. And I think that is a huge safety net that he had able and you were able to think fast and to kind of have a plan in place to take action on that.

Tony:
So Brian, how did you change strategies? Did you have flipping PTSD?

Brian:
Yeah, so a couple things transpired from there. My wife and I had our first son, and there was a couple of different factors, including that big one there that actually led us back to California. And so we moved back and turned that primary into a rental, but we kind of needed to come up with a new strategy because I was sort of back to I can’t invest in California. We still don’t have the funds even though I had the HELOC and whatnot, but we’re talking $300,000 houses now, $700,000 houses. And so it was still a little bit too out of my wheelhouse at the time. And so upon moving back to California, I still had confidence in investing since we had the successful flip. We ran the short-term rental really well, even though we broke even. And so we had all this experience and now I have a long-term tenant in my old primary residence.
And so I really just gained the confidence that I can keep doing this and I can do this out of state. And so my wife and I sort of ventured off on our own and started looking in out of state markets, and we still had our good savings and earnings rate. We still had our HELOC access. So we ended up also using our HELOC to now buy a long-term rental. And that was kind of where our strategy shifted was to get some buy and holds under our belt and start to build up our cashflow. And I had the confidence to look out of state, and we did our research and found a market. And the next deal from there, I bought a duplex and we did some value add to it, and that’s turned out we still have it and it’s turned out to be a great deal. So that’s the next part of my journey was venturing into long-term rentals out of state in more affordable markets than Arizona as well. So

Ashley:
Ryan, what markets did you actually decide on? Is it more than one?

Brian:
Yeah, so I’m in with the long-term rentals right now. We’ve got the Arizona property. The duplex I just mentioned is actually in Aberdeen, South Dakota, not a very well-known market. And there’s kind of a funny story as to why that was chosen. And just to touch on that a little bit, we work in healthcare staffing. And so my wife had an account in that city and she was saying, you know what? The hospital there has a lot of needs, but nurses are booking assignments and they’re getting canceled because they can’t find housing. And so I thought to myself,

Ashley:
Look at your wife, the lead source.

Brian:
So I thought to myself, why don’t we investigate this, right? If there’s a lack of housing, why don’t we see if we can pull off a little midterm rental? And so we investigated that and we ended up finding a realtor, found a duplex near the hospital, put in some renovation money into that, and actually it’s now a long-term rental, but we went into that market anticipating a midterm rental, but we did such a good job on the renovation there that the realtor and the property manager said, Hey, you can get the same on a long-term rental and you don’t have to furnish it. You don’t have to spend all that extra money and do that extra management. And so we ended up just plugging in two long-term leases into that duplex and making about the same there.

Tony:
Now, Brian, you have flips under your belt from the work you did in Arizona, but when you transitioned into South Dakota, how did you go about building that team remotely?

Brian:
At the point of moving back to California, it was like all or nothing. I had to make it work out of state. And so for me, I’m a pretty social person. I have no problem making cold calls, reaching out to people and building relationships. And that’s what I did. I called a couple different brokers that I just found on Zillow and started chatting with them, and one relationship led to another. And so once I honed in on the realtor that I wanted to work with, from there, I literally just leveraged their referrals for everything else, property manager, a contractor. And so it takes a little bit of trust to be in a short amount of time to be able to find and utilize all those resources from that first contact. But again, I was all or nothing. I just went for it and I made it work. And luckily, all the folks that were referred to me, I felt truly had my best interest in heart. And when working with those contractors, they would call me almost every other day. They would send me pictures. They were super detailed and it just worked out really well. But I think it all just starts with not being afraid to make a phone call and to get personable with people and build a relationship.

Ashley:
We have to take one final break, but more from Brian on how to adjust your real estate investing strategy after this. Okay, let’s jump back in with Brian.

Tony:
So Brian, I just looked it up and it was 1,688 miles separating San Diego and Aberdeen, South Dakota. So talk about long distance, right? That’s a pretty wide gap between those two places, but kudos to you for figuring out the process to do it remotely and then really leaning into the folks that you met to help you facilitate that. One last question from you on the duplex. So obviously this was like a burr, right? You bought it, you rehabbed it, you rented it. Were you able to refinance and kind of pull out most of that capital or did you have to leave any cash on the deal?

Brian:
Yeah, great question. And it’s super relevant to present day. I’m actually refinancing it right now. I’m trying to pull about, depends on where the appraisal comes in. I’m shooting for an appraisal of about 1 95 and we bought it for one 30. So after fees and whatnot, I’m hoping we can cash out about 35,000 of that. So that’s my down payment plus a little bit. So it’s not a full bur, but it’s definitely enough to buy me the next deal. And it’s been about a year, right? Since we bought that, it was July of 2023. We bought that at a 7.2% interest rate, and it just didn’t make sense for me to refi until right about now. And I could probably even hold it a little bit longer to get more cash out, but I’m ready to keep adding fuel to the fire. So here we are just working on that right now actually.

Ashley:
Well, Brian, a great time to refinance because while we’ve been on this call here doing this recording, I just Googled it. I knew the meeting was happening that the feds actually cut rates by half a percentage point. So I think more than expected by most. I did a poll this morning on my Instagram and definitely everyone thought more a quarter they were going to cut it, but yeah, by half percent. So

Brian:
Thanks for the news break.

Ashley:
Yeah, you better lock in that loan rate.

Brian:
It’s not locked in yet, so I’m actually excited about that.

Ashley:
Well, that’s good. Yeah. Yeah, it’s

Tony:
A good timer for you. Well, Brian, so I guess we heard about the duplex. I got so excited when you started talking about this that we didn’t get to hear the rest of your portfolio. So we know we got the flips. We have the primary residence in Arizona that became a rental. We have the duplex in South Dakota. What do the other units consist of where they located?

Brian:
So that brings us to 2024. After that duplex this year in 2024, I’ve added eight units, all of them in Arkansas. And so I pivoted out of Aberdeen because I wanted you learn a little bit as you go every time, learn something new after each deal. And I wanted somewhere that had a little bit more population growth, a little bit more job growth. And so I started to look for markets that gave a little bit more of that. And so I stumbled on a market in Arkansas. Interesting story here. I wanted to get into some creative finance, and I had been learning about it recently, and I started Googling buildings that looked like multifamily on Google maps and trying to find ways to find the owners. And so I built a list of a hundred different properties, and I started cold calling and making connections with owners and not necessarily saying, I want to buy your house, but I’m new to this market.
I’m looking to make connections. I noticed you’ve got X, Y, Z property. I’m looking to learn from others. And like I said, build that relationship. How did you get to where you are today? And after calling a hundred people, I stumbled upon a broker in the market who was also an investor. Her and her team own over 200 units, built a connection with her, and she ended up seller financing me a small portfolio of three single family houses and a triplex. And so that was kind of the next deal that we just closed on in May.

Tony:
Brian, I want to really pause here and take a moment to applaud what you just said, because I think for a lot of people, it’s going to go over their heads and they’re just going to hear the seller financing deal at the end, but they’re going to ignore the fact that you were virtually driving for dollars. You built your own list of over 100 small multifamily properties in that market, and you called every single one of those people to find one person that was willing to really entertain and give you that support that you were looking for. And I think that’s the work that most people are not willing to do. They want it to fall into their laps, or instead of doing 100, they’ll do 10. And when they call those 10 people and it doesn’t work, and they just kind of throw their hands up in the air and they wave the white flag. But that is the kind of dedication and hard work that separates the people who talk about wanting to grow their portfolio and those who actually do. So kudos to you, man. That was an amazing thing to hear.

Ashley:
So Brian, what is your cashflow goal? What have you set for yourself as to what you want to reach in cashflow and where are you at right now with it?

Brian:
Yeah, we have some lofty goals. I think just the stretch goal, I want to be at 30,000 a month in cashflow. I’m far from that right now, but I do have some incremental goals that we will achieve on the way to that. And the first thing is to really just be able to retire my wife and then retire myself. And so we’re looking at goals of 8,000 a month in cashflow, 16,000 and then up to 30. And right now, currently with the long-term rentals, we do have a couple of leases that we need to bump up to get us to market value. Once we do that early next year, we’ll be right around 28 to 3000, 2,800 to 3000 in monthly cashflow on those long-term rentals. And then another piece of the story is we just added an arbitrage Airbnb that I just launched last week. We’ve got five bookings. Thank you. Thank you. We’ve got five bookings already. And so we’re hoping that we’ll add over the course of a year with seasonality, maybe another $2,000 a month average over the course of next year. So that’ll put me at about 5,000 a month when all that comes to fruition throughout the next couple months here. So we’re about peeking around the 5,000, and then we’re just going to continue to snowball and hope that we can get that 8,016 and 30,000 mark.

Tony:
Brian, lots of inspiring things coming out of your story today, but I guess the last question I have for you is, do you have maybe a piece of advice that you wish you had three years ago when you first got started?

Brian:
Yeah, I mean, I would just say for anyone that’s new out there who has any doubt, any fear just to take action, that could be maybe not as extreme as what I did in moving out of state to kind of lower your cost of living, but you could literally start. House hacking is huge, and I think a great way for people to get started. But just again, my biggest piece of advice for folks out there is just to take action. And you’re not growing if you’re not a little bit fearful on what that next step is. And I think overcoming that fear and facing it is the biggest thing you can do and build a network of folks that are also interested in what you’re doing. Go to the meetups. But yeah, just take action. My biggest piece of advice for the listeners out there is just to take action, fight your fear, head on, and go out there and do it. That’s all I got for that one.

Ashley:
Well, Brian, thank you so much for joining us today, the Real Estate Rookie. We’re going to link your BiggerPockets profile into the show notes, or if you’re watching on YouTube, it’ll be in the description so you can reach out to Brian to learn more about what he’s doing and his investing journey. I’m Ashley. And he’s Tony. And we’ll see you guys next time on the next episode of Real Estate Rookie.