How a 23 year old teacher got into investment real estate | Bet on yourself
Three years ago I was teaching history lessons to middle schoolers on Zoom, making about $40k a year.
In three years I would own portfolio that is worth about $2,000,000. A lot changed between now and then. I want to share this because I think others, especially on the sidelines, can glean a lot —
What deals to start with?
How do I finance my first deals?
Breaking through limiting beliefs holding you back.
In this post I’m going to share with you my brief story in investment real estate. My story can be broken down into four parts. I will be releasing parts III & IV in a separate post.
- Laying the Foundations — House hacking my primary residence
- Building Equity — Buying my first (crappy) deals
- Scaling a Portfolio — Getting into STR, Creative-deal making
- Lessons Learned the Hard Way — Cash Flow, Preventing Mistakes, Gaining Wisdom
Part I: Laying the Foundations — House Hacking my Primary Residence
There I am, age 24 years old, alongside my brother Ryan.
During this time I was a public school teacher with Teach For America. We marched into public schools earning a mere $30-something thousand a year for extra long work weeks and extreme cognitive & behaviorally challenging students. I was stationed as a Social Studies teacher for 7-8th grade at Enlace Academy, a charter school on W 38th in the International Marketplace neighborhood. It was honestly extremely challenging, many of my students did not even speak English. I was NOT good at this job at the beginning. I wrote the most reprimands & detentions of any teacher in the school my first year. The students rewarded me by hating me even more…
The BEST decision I made — The best decision I made during this time (aside from choosing to date my now wife) was to buy a primary residence downtown. I was living with my parents in their basement as a first year teacher. I stumbled my way into to buying a $118,000 bungalow in Irvington in 2018, at age 23. Fortunately for me my grandparents were Realtors and had personally owned / flipped 20 homes.
The helped me believe that I could own a home before even trying the whole renting thing out… Thank God…
My first property $118k bungalow in Irvington, downtown Indy
House Hacking — I didn’t even know what this term meant when I started living in this home. I had some extra bedrooms, and I rented them out to two buddies. That was all it was to me. There was this random garage-like structure in the back that, with my parents help, we transformed into a one-bedroom apartment. I rented that out, as well. During this time, I would bring in $1800 / month in rent, while my mortgage was around $520. This helped me save a lot of money. I was also paying more on the principle each month than I had to, building equity quicker.
A lot of the principles I was applying during these years came from the book Set For Life by Scott Trench (now BiggerPockets CEO). This book is phenomenal for the upstart real estate investor / young person.
Back to the Story — The property appreciated A LOT during these 3 years. I ended up selling it three years later for $200,000 to one of the tenants.
I walked away from that closing with a six-figure check. I was pretty ecstatic, as a 26 year old…
What to do with the money?
We did have to buy a new house — which we did when we purchased our second primary in South Broad Ripple, a cosmetic fixer upper. (A story for later on that property…)
But there was some money left over, even after that purchase. This got me thinking…
Part II: Building Equity — Buying my First (Crappy Deals)
Around this time, I had a friend who also got interested in investing in real estate. His name was Cory. He was a travel nurse. He was pulling in great money on travel nurse contracts — $15-25K / MONTH! (This was COVID). He approached me asking to invest in a deal together. Sure, why not?!
The Deal — The deal was that he would provide the capital, while I would provide most of the sweat equity (finding the deal, executing the deal, managing the property).
Our 4plex — 29 N Tacoma — First Investment Property
Buying a 4plex — To put it moderately, we didn’t know what the hell we were doing. I was using the BiggerPockets rental property calculator and Rentometer to figure out rents. I landed on one that seemed to make sense to us at the time. We ended up buying this quadplex in Englewood, a rougher neighborhood on Indy’s eastside. We got it on the MLS under-asking for $328,000. Cory put down about $80,000 on it and I put down some of the rest for closing costs. He funded the vast majority, abiding by our handshake deal.
We put in some renters in using a property management company, and handed over the management to them — easy enough right? This one would come back to haunt us… Turns out property managers don’t always care for the property like it’s their own — who woulda thought? I turned my attention elsewhere…
Quitting my Teaching Job — Around this time, I got my real estate license, a HUGE move for me personally in the long run. And I now had a rental property to prove my status as genuine real estate investor (although I had no idea what I was doing). I took the leap full time in real estate, planning on making realtor commissions to cover my living expenses, and investing the rest…
Buying a Single Family Home Off-Market — In 2021, I ran across a FSBO deal off-market on Facebook. The owner was asking $80K, rented for $800. A real piece of crap property, if I’m being honest. I had about $14K to put down myself, but I needed financing for the rest ($66,000). I was not lendable from financial institutions as I had just switched jobs. I approached my dad on this one, asking him for a private loan. He asked what he would make, so I offered him 7% interest annualized on his money. He took the offer, probably simply because he wanted to show his support for me.
Investment Property #2 — 2040 S Laurel St — $80,000
I inherited tenants on this property, who were paying $800 / month. They were great tenants honestly. They actually left, though, when their lease was up and I had to decide what to do with the place. I ended up investing about $4000 into cosmetic renovations (paint, LVP, butcher block counters), and re-leasing it for $950 / month. Turned out to be a “light value-add”!
Laurel St Rental Today — I refinanced this in 2023, taking the money to buy more deals. Recently, I rented this property out for $1050 / month to a tenant (about 25% increase in rent in 3 years of owning). I still am accruing interest owed to my dad on that original $66,000 loan. At this point I owe him roughly $15,000 in interest. (Not bad on his money, right?). If you are looking to make passive returns like this through private note investing, hit me up.
Buying Crappy Deals — My first two “breakout” deals (Tacoma and Laurel) were both in Class C neighborhoods. Pros to this: Easier to cash flow, Lower barrier to entry. Cons to this: Management is tougher, Lower income tenants w/ problems (as I would find).
During this Time — During this time I started to make a considerable amount selling real estate. Turns out that there was a HUGE demand for an investor-minded agent that could speak to the ins & outs of owning investment real estate. In fact, my wife & I’s income about 3x’ed from 2021 to 2022.
I had some disposable personal income to play with and a desire to expand knowledge outside of “basic” long term rentals.
In 2022 we would launch into our next big investing project, in Airbnbs… stories from Airbnb investing in three separate properties coming soon in Parts III & IV. As well as lessons learned the hard way in investing in real estate.
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-Tyler
