Real Estate Careers Retiring at 30 with 40 Rental Units: How One Ex-Grad Student Did It by G. Brian Davis July 19, 2018February 11, 2019 by G. Brian Davis July 19, 2018February 11, 2019 Eric Bowlin was 30 when he retired in early 2016. Nowadays, he does, well, whatever he wants, and blogs about the good life as a landlord. He doesn’t have a (financial) worry in the world. But when he first started? He had to reassure his sobbing wife, while explaining why they couldn’t afford groceries for another few weeks. Here’s Eric’s story of retiring young with rental properties: the good, the bad, and the moments so ugly they ended in tears. A First Taste of Passive Rental Income Ten years ago, Eric had recently enrolled in a PhD program in economics and decided to buy a home with his wife. By sheer chance he ended up buying a triplex and moving into one of the units. “At first I was not very excited about it. In fact, I planned to sell it and buy a ‘normal’ home and just be a ‘normal’ person,” Eric explained. Then he had a classic “ah-ha” moment. While relaxing with a movie one evening, someone knocked at the door. Eric wasn’t expecting anyone, and when he opened the door, there was one of his neighboring tenants, cash in hand to pay the rent. Eric gave the tenant a receipt and sat back down to resume his movie. Then suddenly a light bulb flashed for him. “I had this instant moment of clarity, where I realized I didn’t have to go out and hustle and chase after money. I realized I could literally make money knock at my door! “In that moment, I made a decision: for the rest of my life, I would focus on investing rather than working a traditional career.” Eric had just one problem: he had barely qualified for a loan for the home he just bought, as a starving grad student. Where would he get the money for more properties? Going to Afghanistan Having just started his PhD program, Eric knew academia wasn’t going to provide a real paycheck anytime soon. So what did he do? He joined the military and shipped off to Afghanistan. “In 2010-11, I deployed to Afghanistan. While it did help us with the money to get started, it certainly wasn’t without its sacrifices.” He spent a full twelve months learning. He read every book on real estate investing and business that he could get his hands on. “It was agonizing. More than anything, I wanted to jump in and get started. Instead I had to sit around waiting, on the opposite end of the world. “But when I look back, that year of waiting was critical to my success. It forced me to take my time and learn, rather than just jump in without truly knowing what I was getting into.” After a year overseas, Eric came home, and resigned from the PhD program. He had enough money to start his first investment property search, and he set to work. Eric’s First Flip “When I came home in 2011, I got my Realtor’s license to help bring in some extra money on the side, and in early 2012 I bought my first flip. “It was the biggest financial risk I’d ever taken.” Eric maxed out every credit card, used every dollar he had saved, and borrowed money from his friends to fund the deal. “A few weeks before we were scheduled to sell the flip, we were down to a couple hundred dollars in our bank account. Every single day for those few weeks, I would find my wife crying. We couldn’t afford groceries, and she was terrified. I won’t lie, I was pretty nervous myself.” To raise the stakes even higher, Eric had put a multifamily rental property under contract to buy, scheduled to close a few days after the flip was scheduled to sell. “In retrospect… yeah that was a mistake.” There was no Plan B. Eric needed the money from the flip sale to buy the multifamily rental property. If the flip didn’t settle for some reason, he wouldn’t be able to buy the multifamily, and would lose his deposit and the deal. For that matter, he wouldn’t be able to eat, either. Spoiler alert: the flip sold on time. Eric didn’t die of starvation, and he settled on the multifamily. The Beginnings of a Business Eric’s first investment property – the triplex he moved into and house hacked – allowed him to live for free, which laid the foundation for him to take a risk on a career in real estate investing. “But it was my second multifamily, a fourplex, that truly set me up for success. It is actually two buildings on one lot: the front building has three units, and the rear building is a single-family.” It had been owned by a mother, who had moved to Florida and left her son to manage it. “Unfortunately, he was addicted to heroin, so as you can imagine, it didn’t take long for the buildings to get filled with the worst kind of tenants. “The mother was asking around $150,000 for it. I wasn’t even interested in it, so I tossed a crazy low number of $65,000 out there figuring she’d reject it. She countered at $75,000, which is what I bought it for. “We put about $15,000 worth of work into it between floors, paint, cleaning, evictions, etc. After we turned it over, it appraised out at around $170,000-$180,000 and I got a $130,000 loan on it. “So, I was able to walk away with around $40,000 cash in my pocket and cash flow over $20,000 per year from it. “This is when my life really began to change, and I saw the power of this strategy.” Growing a Business By now, Eric had seen two separate multifamily properties blossom into life-changing sources of passive income. He decided to pursue a strategy of multifamily rental investments. To help bring in extra income, he kept his real estate agent license and continued using it for side work. But he had become a full-time real estate investor. “From 2012-2015, I grew my real estate investing business. While I did a handful of flips, my main focus was on buying, renovating, and renting out small multifamily properties.” He even went so far as to get his contractor’s license. In addition to overseeing his own renovation jobs, Eric took on other investors’ projects with his crew to generate even more revenue. “I began to understand that real estate investing and a real estate business are two different things. I was investing, but I was also running an active real estate business.” Eric realized that even though he had a successful business, he was working more than ever, which was not why he started investing in real estate in the first place. “I was spending all this time lining up private investors and funding, hunting down deals, and overseeing renovation projects. That’s a business! But putting my money into a deal and earning passive income from it? That’s investing. “I had a second moment of clarity in making this distinction. I was then able to start shifting my focus even more, to start easing back on the actively managed projects and prioritize the income earning investment properties. “This is when I started truly becoming financially independent.” Walking Away In 2015, Eric and his wife moved from Massachusetts to Texas. “After we moved, I was able to completely systematize my real estate business, completing the transition from ‘business owner’ to ‘investor.’ In many ways, being 1,700 miles away forced me to make those difficult decisions and put those changes into effect faster than I would have otherwise.” Because Eric didn’t know how much money he would need in his new life, he took a sales job. “I worked there for about nine months, and then I quit in January 2016. This photo is my last day of work ever. I was just chatting with a coworker and someone commented how good/happy/whatever I looked. So, one of them took out their phone and snapped a photo and sent it to me.” Today, Eric blogs about his experiences as a landlord at IdealREI.com. He still invests some money in real estate, although only passively. “Most recently I’ve been investing in real estate syndication. A number of investors pool their resources to be able to invest in large-scale projects. I’m now partnered on roughly 450 units here in Texas, which I own a small percentage in.” But Eric’s days of being an active real estate business owner are over. That’s the beauty of a real estate investing business – it’s what you make it. How many people would have walked away from a successful business like Eric had in Massachusetts? It generated plenty of revenue, but ultimately it wasn’t what Eric wanted. What he wanted was passive rental income. That was what drew him to real estate investing in the first place, when a neighboring renter knocked on his door with a handful of cash. Three years after buying his first true investment property, Eric reached financial independence. Less than a year after that, he officially retired. What are your real estate investing goals? How many years might it take you to reach financial independence? Could you do it in three like Eric? How many units would it take? To make your dream of financial independence come true through real estate investing, start your 14-day free trial with Mashvisor here. Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL Fix and FlipInvestment PortfolioPassive InvestmentsRenting Out 0 FacebookTwitterGoogle +PinterestLinkedin G. Brian Davis Brian is a real estate investor, landlord, real estate writer, and co-founder of online landlord resource SparkRental. He's owned dozens of investment properties over the last 15 years, and now loves teaching and writing about real estate just as much as investing itself! 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