How I Went From Broke to $4,600 / Month in Passive Income By Age 28

The story behind how one man went from broke to earning $4,600 per month in passive income by the tender age of 28! Learn from his success.


From Broke to $4,600 Each Month in Passive Income By Age 28Note from Paula: Today I’m featuring a guest post from my friend Brandon Turner, who is officially The Tallest Guy I’ve Ever Met.

I suggested that he write a post about “How I Got So Friggin’ Tall.”


He countered by offering the juicy details on how he created $4,600 per month ($55,200 each year) in passive income by the tender age of 28.

(New readers: “passive income” is money you earn while you’re sitting on the couch in your underwear, eating Cheetos.)

(Brandon loves Cheetos.)

Take it away, Brandon!

From Broke to $4,600/Mo in Passive Income By Age 28

By Brandon Turner

I knew it would be the worst day of my life.

Throughout my childhood and teen years, I saw it coming. And it scared me to death.

I’m talking about “the day after my honeymoon.”

You see, I knew I had college to look forward to. After college, I had the dating world, travel, and the honeymoon to look forward to. Everyone “knows” the early twenties are the best years of a person’s life.

In my mind, those glory days ended with the honeymoon — a symbolic sign that life would cease to move forward.

Sure, there would be kids, vacations, raises, etc. — but I knew that the first day of adulthood had officially arrived. There would be no more levels. I had checked the box for high school, college, sex … and then what?

That’s why I dreaded this day. The day when I woke up and realized that from this point on, until I hit my 60’s, I would be stuck.

The thought depressed me … until I found a way out.

Can you relate?

For millions upon millions of adults, this is life. Your progress until finally you … just stop.

You stagnate.

But I found a way around it. Phew!

I used real estate to create financial freedom and live a life that I wanted. By age 28, I built a rental portfolio which produced around $4,600 per month in (mostly) passive income. This post is going to share how I did it, and offer tips for how you can do the same.

Why I Chose Real Estate as my Path to Freedom

I have to admit, I was first sucked into real estate investing from the television.

During the mid 2000’s, there were several “flipping” shows that featured an investor tackling a large remodel job and making big money fixing ugly houses and selling them for huge gains. It sounded so easy and exciting — I just had to do it.

I bought a home, fixed it up, and sold it without really knowing what I was doing. (This was before the real estate crash… when anyone could flip a house!) Although I cleared around $20,000 over the year, I realized three important things about real estate:

#1: Real Estate Has No Limits. My fear about reaching some final “step” was quickly washed away when I realized I could control my own future because there was no limit on what level I could take it to. I didn’t realize this at the time, but the reason I had such fear of growing old and stale is because I was an entrepreneur stuck in a day-job world. As soon as I realized there was hope – the “day after the honeymoon” never came!

#2: Flipping Houses Is Not Passive Income. Yes, I made money (and spent it on my wedding.) However, it was a LOT of work, stress, and risk. I realized flipping houses was just a business. It appealed to the entrepreneur side of me – but it was still trading time for dollars, which I was beginning to see was my enemy.

#3: Real Estate Can Produce Outsize Gains. For example, I bought that first home with just a couple thousand dollars down and used credit to remodel the home (not the world’s best choice, but it worked for me this time!) Had I tried to invest in stocks with that could thousand dollars -I would have possibly made a hundred bucks a year. Hardly life changing. You see – real estate is the one asset class that allows you to use creativity and sweat in the place of cash.

My First Rental Property (And My First Addiction)

After that first successful house flip, I was back at square one, with no home and no income. I began looking for a new home to buy — which is when I stumbled upon the concept of buying a small multifamily property.

The home was a duplex located in a nice, blue-collar neighborhood. It was a bank foreclosure, so it needed a little bit of paint, carpet, and cleaning. I bought it, lived in one half, and within a couple weeks I had the other side rented out.

The best part? The other unit paid the entire mortgage. More than 100% of it.

Which meant I was living for free. This was my first taste of (mostly) passive income and I quickly grew addicted.

I say “mostly passive” because there is work involved with managing rental property — depending on how you set up your business. In the beginning, I accepted phone calls from my tenants and did my own maintenance and repairs (though I’ve since outsourced both of those tasks.)

My Step-by-Step Path to Growing Passive Income

As the title of this post suggests, I went from having nothing to around $4,600 per month in cash flow by the time I was 28. There is a good chance you are wondering how the heck I did this, so I’ll break it down for you here.

However, keep in mind that this is just the path I took — not necessarily the path you should take.

Age 22: I bought that first duplex that I lived in part and rented the other part out. I stayed for a year or so, and then moved on. The mortgage was right around $600 and I rented the other home out for $625, giving me the opportunity to live for free. As soon as I moved out, however, I rented the home I lived in for $500, providing me around $500 in extra money. However, after paying the utilities and budgeting for repairs, I ended up clearing around $300 per month.

Age 22 (and a half!): I bought another house to “flip” … that ended up not selling. The market started crashing all around me, and I couldn’t sell. However, I discovered a tactic (out of necessity) that I’ve used numerous times that helped me turn this flip into a cash flowing rental that brings me around $300 per month – with no money out of pocket. I’ll talk about that strategy a bit more later in this post.

Age 23: I bought “the hell house” — a home that just breaks even every month. Not cool.

Age 24: This was a big year. I bought a 24-unit apartment complex, using seller financing (which means the sellers act as the bank, and I pay them the monthly mortgage payment each month.) The property was half empty when I bought it, and in rough shape. I spent more than a year turning the thing around, raising rent, fixing problems, and managing the rehab (and doing a lot of the labor myself.) In the end, this property cash flows around $2,000 per month.

Age 25: Nothing. What a lame age.

Age 26: I bought a triplex with some friends this year, which provides a total of around $600 per month in cash flow. I get half, so approximately $300 per month.

Age 27: I bought a four-plex at the start of my 27th year of life, using a hard money loan. There is a 5th unit that I will be renting out after my refinance goes through, and I should be cash flowing around $800 per month within a few months of now.

Age 28: I decided to flip a duplex a few blocks from my house, but decided to just keep it for a rental instead for a few years, maybe indefinitely. I’m working on getting a refinance on it right now, but it will be cash flowing around $500 per month when the refinance happens later this month.

Age 28: I’m closing on a triplex later this week that provides around $400 per month in cash flow.

So add it all up and you get $4,600 per month in fairly passive income.

Of course, there’s volatility. Some months, Murphy’s Law kicks in. I deal with an eviction, a trashed unit, extra vacancies, and other problems. Other months, however, I have strong occupancy and everything runs smoothly.

I plan for most problems by collecting security deposits from the tenants (sometimes as high as two months’ rent), I have my manager make frequent inspections on the units, and take quick decisive action when things go wrong.

The Power of Real Estate Partners

At this point, you are probably thinking, “Man! Does this guy work for the Mob?! How did he get so much money to buy all this stuff?”

Here’s a secret: I’ve put almost no money into anything I’ve ever bought. Really, probably less than $5,000 total over the past seven years.

How did I do this?

While I used a variety of techniques (probably every method a person could) my favorite technique was to invest with partners. Essentially, my strategy looks like this:

  • I learn everything under the sun about one specific real estate niche and strategy. I become an “expert” in that very narrow niche.
  • I find a great deal.
  • I negotiate a killer price.
  • I find a partner, who wants to earn a good return but doesn’t want to be actively involved.
  • The partner supplies the down payment and gets the loan on their credit.
  • We both own the house jointly.
  • I manage the property entirely and manage (outsource) every aspect of the deal.
  • We split all profits 50/50.

A lot of people ask “but why would this partner want to do this? They are paying all the money, yet giving you half the profit.”

True — absolutely. However, as I often say “50% of a great deal is better than 100% of no deal.”

The simple truth is that most people will not invest in real estate. They won’t take the time to learn how to evaluate or negotiate a good deal. They won’t call the agents, arrange the financing, or crawl under the houses. (Though I’ve finally outsourced the crawling-under-houses aspect!)

The fact is: most people won’t invest. When I pitch a partnership, I give them an easy way to enter the field.

Cool, I Got Cash. Now What?

My point is not to show off, or to make it sound easy. Sure, in a 1,800-word blog post, it can seem pretty simple.

But the fact is, I’ve struggled a LOT to get where I am. I’ve made more mistakes than good decisions. I’ve bought property that I later regret buying. I’ve wasted a lot of time chasing deals that made me no money at all. I’ve even lost money a few times.

Reaching $4,600 in passive income took a massive amount of work.

But I love it.

Life did not end the day after the honeymoon. Now that I have financial freedom, I can live on my own terms.

There are many ways to create freedom in your own life. Your path doesn’t have to be real estate investing. — that’s just the path I chose.

Life doesn’t have to end on the first day of adulthood. That’s when it can really begin.


Brandon Turner (G+) is the Senior Editor and Community Director. He is also an Active Real Estate Investor (Flips, Apartments, and Buy-and-Hold,) Entrepreneur, World Traveler, Husband, and Third-Person Speaker.

If you want to learn more about how to get started investing in real estate, check out The Ultimate Beginner’s Guide to Real Estate Investing (a free online guide that Brandon Turner co-authored) or How to Invest in Real Estate at a Young Age.

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NOTE: Comments will be held in moderation. So if you leave a comment and it doesn’t appear on-site, don’t panic!! I just need to approve it on the back-end. :-)


  1. says

    Thanks so much Paula for letting me brag about myself! :) I do appreciate the stage to share what I’ve done and hopefully help others accomplish much more. I’ll be sure to hang out here and keep track of comments, in case anyone has any questions!

    Thanks again Paula! You rock!

    • jim. triplett says

      I enjoyed your post I have the know how it’s just during life I’ve made mistakes with my credit and recently divorced I’m ready to pick up the pieces and start over I’m a fighter not a quitter but with no credit and very low funds am I dead in the water I just don’t know the steps to get started please help

  2. says

    Hi Paula,

    This is an awesome post. I first heard about you in the BiggerPockets podcast and have been following your blog ever since. It’s nice to see a guest article from Brandon.

    I recently bought my first house in partnership with my father and I am on my way to become financially free.

    It’s great to see the progress that Brandon made at such a young age. I am 23 so this makes me aware of what I can do.

    Cheers to passive income,


    • says

      That’s great, Diego!! Congratulations on your first house … keep reading me, BiggerPockets, and other blogs written by rental property investors. There’s a great online community forming around people who are sharing their ideas, opinions, successes and failures, and it’s especially awesome to see more people in their 20’s and 30’s who are taking part in the real estate investing scene.

    • says

      Hey Kathleen, thanks for reading! What next? I have no idea :) I wrote a post a long time ago on Mr Money Mustache about that. I got to the “passive income surpasses expenses” phase and realized that didn’t mean anything, really. So I decided to tackle bigger projects and figure out what to do next!

      • says

        Hey Brandon and Kathleen — I want to jump in here, too!

        Brandon, you had mentioned earlier that one of the most important questions you can ask yourself when you’re envisioning financial freedom (or any other dream) is the question … “and then?” Then what?

        Okay, cool, so you’re financially free. You no longer need to trade your time for money. Then what?

        This is the space where Awesomeness is Born. That’s where you grow companies, start families, develop new skills or engross yourself deeply in hobbies.

        I went through this when I traveled the globe for two years. I had spent years wanting to travel, and when I finally did, I was like, “Okay, I’m here! I’m in Egypt/Vietnam/Colombia. Now what? This experience MUST go beyond just staring at the Pyramids. I need something more.”

        So I started reading. A LOT. Which led me to start writing again. And that got me to start blogging. And now we have this awesome community of rebels and limit-smashers here at Afford Anything, which is the most fun project of my life …

        So I guess this is a slightly-rambling way of saying that “Then what?” is an ultra-important question, but it’s also one that tends to answer itself organically, one step at a time.

  3. says

    Talk about a well timed post. I was just looking at Brandon’s BP profile today and wondering how he got to 40 units so quickly. I even considered pestering him with an email, but I figured I’d search BP for more details on his story this evening rather than bothering him. Luckily I stopped here first.

    Great story. I’ve had buyers remorse about my second property that I closed on a few weeks ago. It always helps to hear that everyone else has had plenty of regrets so I shouldn’t beat myself up too badly. Hopefully this isn’t a “hell house”, but even if it is I can always do better the next time.

    • says

      Hey Mike,

      That’s awesome! Yeah, I get asked that question a lot, so I figured I’d tell my story here so I can point people to it. But feel free to hit me up on BP anyways with questions, I’m never bothered!

      And yeah, sometimes buying properties that aren’t amazing are part of the gig. I think the lessons I learned from buying that hell house have taught me more than a book ever could.

      Thanks and keep in touch!

  4. says

    So… The strategy you discovered that helped you turn the not-selling flip into a cash-flowing rental was that you had already purchased it with a partner who agreed to split the profits 50/50? I’m not sure I see the connection between that strategy and turning the flip into a rental…?

    • says

      Hey Rich,

      Yeah, re-reading that I realized I didn’t explain it too well!

      What happened is this. I bought the house to flip by myself, but when it didn’t sell, I went to the bank to refinance it and was told “No.” (What? A 22 year kid with no job couldn’t get a loan!?) So I was stuck… I couldn’t sell it, couldn’t refinance it… and my short term loan was coming due (it was a 2 year hard money loan.)

      So I talked with a partner and added them onto the legal title for the property. After 6 months of “seasoning” that the bank required between title changes, I went back to the bank and used my partner’s income to qualify for the loan, which was no problem for them. So we refinanced the property and now have a 30 year mortgage on it. I gave up half my profit for this, but it was the only way.

      So the strategy I stumbled upon was using partners, but I stumbled upon it in a very unconventional and desperate way.

      Hope that helps!

  5. says

    Love the site but I would disagree wholeheartedly with this post. To take on all kinds of debt with no money down to flip properties is very risky. Remember the last crisis? To borrow on credit cards, or hard loans to buy property, no. No money down, using someone else to put up the down payment and the credit? If you can buy real estate with cash for the income potential – that would be a much less risky. Even a modest amount of debt might be ok. This article ignores the risk involved, touting the current income. I’m glad it is working for him right now, good luck.

    • says

      Hey Jay, I appreciate the comment and actually don’t disagree with you at all. What I did at the start was incredibly risky, and I don’t deny that. I don’t even really recommend people doing the same thing, though there are a lot of people better at flipping than me. Now I’m all about cash flow investing (I’ve learned my lessons about flipping!)

      However – I had no net worth at the time, no credit history, and a terrible job… so what was I risking? Anything? Years at a terrible job, trying to save up enough money to buy a property?

      As Wayne Gretzy famously said, “You miss 100% of the shots you don’t take.”

      Now days, I partner with others to buy property using their income and credit, but only on crazy cash flowing rental property. I think it’s one of the least risky things in the world. When there is enough cash flow each month to more-than-cover all the expenses, including saving for the future, and we have fixed rate mortgages on the properties, and systems in place to manage effectively … I think there is VERY little risk involved.


      • says

        Thanks Brandon. I hope that didnt come across as overly critical. As long as you have an adequate cash cushion for problems and you aren’t planning on selling the properties – then the cash flow model can ork. The real danger in buying with little or no money down is that if interest rates go up – values should go down. But if you are confident in your abiliy to keep them rented and maintained if could work, just leaves you a much smaller room for error when you are highly levered – I tend to be much more conservative. Congrats for striking out and your entrepeneurial spirit. Of course use only fixed interest rates. Hope it works out great!

  6. says

    What an awesome post! Thanks for sharing. My husband and I have toyed with the idea of owning rental property, but we just haven’t taken the plunge yet. This definitely motivates me to investigate more (and maybe look for a more seasoned partner!)

    • says

      Thanks so much! Yeah, rental property can be fun – but it can also be a lot of work, so be sure to study as much as you can ahead of time to decide what you really want to get into. There are so many different routes, but I think you can succeed with practically any of them if you work at it!

  7. says

    I really enjoyed this post – mostly because I can relate. I bought my duplex at age 23, lived in half, saved like crazy and then bought what I consider my dream home (2500 sq ft on a lake) at 24. Our real estate market is very weird where I live so I’m a little shy to keep going. (Although it’s certainly tempting to pay cash for a 900 sq ft house @ <30k) Thus, I have turned to other means of passive income for now- mainly index investing (boglehead style) and through peer/social lending. Now I have my own blog about peer & social lending to share information with others.

    Seems like you had an exciting path and I envy your financial freedom. We'll see where I'm at when I turn 28 :)

  8. says

    Yikes! I just joined BP about a week ago (thanks to Paula), and now Brandon is on here doing a guest posts…how exciting!

    I can say that BiggerPockets is “all that, and a bag o’ chips.” I love that it’s a community filled with such a diverse group of people; literally, from around the world. Plus, I respect and appreciate (immensely) that Brandon, and his partner Joshua Dorkin are highly visible, and very protective of all those who post on their site; especially “newbies” who they don’t want to be taken advantage of my unscrupulous folks (hmm…can we say, gurus…).

    I’d NEVER imagined I’d be swept into the world of real estate like I’ve been over the past 6 months to a year, but thanks to Paula, and to BP, I think I’ve been bitten…now, for action.

    Thanks for the great post, Brandon, and best of luck to you and the BP community too!

    • says

      Hey Chante, thanks so much! I really appreciate the kind words about BP also. We try so hard to make that place, as you said, “all that, and a bag o’ chips.” I look forward to hanging out more often, on both BP and here on AffordAnything! Thanks again for reading :)

  9. says

    New to afford and Bigger Pockets. I have been in the corporate world for 20 years and I am completely disgusted with the politics, long hours with little appreciation and people who think they are so smart but would be complete failures if they ran their own business. Although I started late I now own two condos with excellent cash flow and I am hoping to obtain a third within six months. I first though my path to financial freedom was thru the corporate world and investing with Wall Street but I feel I am on the right path now and what keeps my head up at work is one day I will join the vagabonds out there.

    • says

      @Rock — Better late than never!! I’m glad you’re blazing your own path towards financial freedom, rather than trying to find it through the corporate world. I firmly believe that grabbing the reins and creating freedom through your own investments/businesses is the best way to go. Welcome to the tribe!! Glad you’ve joined with us trailblazers. :-)

  10. says

    While I congratulate you on your accomplishment, I would be concerned about the partnerships. They rarely turn out well. You might have to sell when you are vulnerable, they might scare out for liability issues, or themselves have difficult money times. I would transition to you being the sole owner, now that you have a viable income for regular loans.

    Again, congrats. Nice to see that other people are where I want to be.

    • says

      There is definitely danger in partnerships, and I choose them VERY carefully because of it (close family/friends ) but even so, it’s always a concern. So yeah, I definitely would like to move more toward total control as I’m able! Thanks so much for the comment and reading!

  11. says

    HEy Brandon great story, I think you relly followed a pasion without being fearful. I commend you for doing things the average person would not do. So anything new coming up in the pipeline? Also what area of the US are you buying property? Because by me (Northeast) the taxes take a big chunk of any profit a landlord might get.

    • says

      @EL — Just to comment: Property taxes in the area where I invest (City of Atlanta) are also ridiculously high, so I just factor that into the equation when I’m looking for my properties. Here’s a post on how to determine taxes, insurance, maintenance, etc., when evaluating rentals.

    • says

      Hey EL – thanks! I can’t say I was always without fear though! (More than one sleepless night in my journey!) :)

      I’m near Seattle, but more toward the coast, and we have good prices here with stable rents, which is nice. Next for me, though, I think would be to sell it all off in the next few years and “upgrade” to a few bigger properties down in Texas, where the climate (both political and physical) is a bit better for Landlords!

  12. says

    Brandon, awesome post, I have been interested in hearing your story, glad to have run across it. Didn’t realize you had so much experience with real estate, thought you were more of a blogger, man how do you find the time. Again, Great post and thanks for sharing it was quite uplifting!

    • says

      Hey Jim, thanks! Yeah, I figured I don’t usually tell my story, but it should be somewhere in case folks wanna learn about me!

      And yeah, I actually just started blogging 2 years ago. Before that, I barely touched the computer except to play a little Starcraft once in a while! So the last 2 years have been a complete whirlwind. My wife now works on our rental business a lot more than I do, and we have an office manager too. My actual work on that side of things is probably down to under 10 hours a week, and even that is tough. Throw in the book I’m writing and I forget what free time was!

      However, I don’t have kids so I can’t complain. I know if I had those I would simply cease to exist from being too busy!

      Seeya around the blogosphere!

  13. says

    I love reading success stories and you make a great point which can be applied to other industries: Even though it takes money and knowledge to achieve financial success, you don’t personally need both. When lacking in money, but very knowledgeable in a particular area, you can partner up to balance it out, and work towards a common goal together.

  14. says

    Very inspiration stuff! I’m a huge fan of Brandon’s and Bigger Pockets. I just closed rental property #4, and am working towards clearing $2000/month in cash flow.

    Can only dream of the day I get to $4000/month. Fortunately, I’m planning on calling it quits around $3000/month or so.

  15. says

    Hey Brandon,

    Great story, thanks for sharing!!! My Wife and I hope to explore Multi-Family investments soon.

    I’m assuming your first investment wasn’t following your 50% rule? With the mortgage at $600 and rent at $625, how did you prepare for any unexpected expenses?



  16. says

    So if I understand you right your partner(s) are ponying up the cash for everything, right?

    Down payment
    Loan to purchase the property
    Money for repairs
    Miscellaneous costs

    Then you split everything 50/50 so that $4,600 of “passive” income is really only $2,300 to you?

    If I understand this right then the the post that you must write next is how to find partners like that. That’s where the real money is!

  17. says

    So what is the end goal with the passive income, is there a certain point where you would stop…10K, 20K, 2 years. 20 years?

    I ask because we have decided to take a faster approach and pay off our rental home, and home we live in(also rental income producing) and pay the mortgage as regular payments with all of the rental income going towards decreasing the mortgage balance and eventually(7 years by my calcs) have that paid off and live off the rental income only.

    • says

      @Steven — I don’t know what Brandon’s end goal is, but I think “living entirely on rental income” is a pretty awesome goal. (That’s my goal, as well.) Once you’re totally living on rental income, you can do anything you want: write a novel, become two stay-at-home parents, move to Bali. You’re no longer tied to the necessity of creating an income.

      • says

        “But I think “living entirely on rental income” is a pretty awesome goal. (That’s my goal, as well.)”

        Just one of the reasons I enjoy reading many of your posts, it feels a little like minded for some of the things you write about. It’s exciting to think about, right now I think about this plan and money as much as I think about sports, which for me is near impossible.

        Some of the things we do are not “Personal Finance” conventional, but we are not trying to be conventional. We decided to pay off the rental home early, put our emergency fund into a dividend producing stock, use only 1 income to pay off student loans. It’s not what everyone would say is correct, but I feel really good doing it and it’s working for us. Thanks again for the comment, hope to read more great posts in the future.

  18. says

    My only concern about this type of strategy is over leveraging myself and losing it all. Dave Ramsey did something like this. Glad to see you are doing well, maybe consider strengthening your positions so you do not leverage yourself to much. After all this work, you do not want to lose it all some day. Thanks for sharing.

    • says

      @Terry — Then you should become a landlord. Nothing is stopping you, other than yourself.

      Earn more money. Acquire the skills to get a higher-paying job. Work 60-80+ hours per week, if that’s what it takes. (Most of us who are financially well-off have worked ultra-grueling hours at some point in our lives.)

      Then live on a bare-bones budget (I used to live on $1,000 per month). Get roommates in order to keep your cost of living low. Grow your own food. Walk or bike everywhere. (I own 6 properties, and still live with 2 roommates.)

      If you do this, you’ll turbo-charge your savings. After 1-2 years, you’ll have enough to buy your first rental property. Use all your profits to buy your second rental property. Then your third. Then your fourth.

      Alternately, you could whine and complain all day. The choice is yours.

      • says

        He’s not whining, he’s complimenting the process with an apt and succinct quote about the whole ordeal. He put it in the past so he is probably now the man who is working no job. Good for him :)

        • says

          @Jon — I like your positive outlook! :-) Yes, I hope that he meant that in the “past tense” — as in, he’s escaped the time-for-money carousel. I hope he now has investments that create passive income. I would love to see more people embrace an empowerment attitude, and enjoy the success that flows from that. :-)

  19. says

    This story is very similar to mine. Eight years ago I was divorced, had two kids under 6 and about $5000 in my savings account. After divorcing I moved into an apartment, saved some money and within a year I purchased a Duplex. The tenant on the other side paid 60% of the mortgage so it wasn’t free but still good for me. 8 years later my new wife and I own the duplex and 2 other single family houses and are clearing about $700 a month. We both still work for the man but will be aquiring more properties soon. The “City” I live in is about 30,000 population. Foreclosures are here but there is stiff competition for them…it can be done but great deals are rare.

  20. says

    The title says “From Broke To 4600″ but the post never really says how he went from 0 to that first passive income. How did he but his first house to flip if he was broke??” That’s the part most of us are stuck on.

    • says

      Hey Jon,

      Great question. So, I’ve never really put any of my own money into any deal I’ve ever done. I consider myself a “creative real estate investor” and try to find other ways to make it happen. So, on my first deal, think I did a low (very low) down payment loan (I think it was 5% down) and borrowed the money from my parents. I financed most of the repairs on credit cards (not usually recommended!) and was able to make it happen that way. The next deal, after I sold that one, I obtained what was known as an 80/20 loan, in which i had 2 mortgages, one for 80% and another for 20%. They don’t really have that loan anymore, but I usually recommend people start out with an FHA loan, which is 3.5% down payment and good up to a 4-unit property.

      Hope that helps some!

      • says

        Hey Jon –
        Jumping in here: I totally agree with Brandon’s recommendation that first-time investors (who are cash-strapped) apply for an FHA loan and use it to buy a multiplex.

        As he said, you’ll only need to put down 3.5 percent, and you can buy 4 units. Live in one of the units (preferably with roommates, if you’re really broke) and rent out the other 3 units. Do this until you’ve saved enough money to make a down payment on your next home. Then repeat.

        My first investment was a 3-unit. I live in one of the units (with 2 roommates plus my boyfriend) and I rent out the other 2 units. As a result, my out-of-pocket housing costs are $0 — in other words, I live for “free” — PLUS I collect about $3,500 gross every month.

        This allowed me to buy House #2, and then #3, and #4, and so forth.

        So that’s my recommendation for anyone who is starting out. Best of luck!

  21. says

    I know I’m a little late in the comments but I just wanted to say that I love your story and it has inspired me to continue doing what I’m doing and hopefully i’ll be where your at soon.

  22. brooke says

    Hi, I’m curious how you insure that the investor gets a return? For example, for the property that breaks even, how do you not get an upset investor and keep them coming back?

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