Our Story

The course of my life changed permanently the day I read Rich Dad Poor Dad by Robert Kiyosaki. From this master I learned the revolutionary concept of “Your house is not an asset,” among many other lessons related to the benefits of creating passive income through rental property.

My launch into real estate investing entailed the simplest kind of all rental property acquisitions: moving and converting my home into a rental. My girlfriend (now wife) and I were at the point in our relationship where we were ready to take that next step. However, my one-bedroom condo felt too small for the two of us, and her house-share was also not ideal for obvious reasons. As luck would have it, we noticed one day that the tenant of the two-bedroom unit across the hall from my condo was moving out. We jumped on the opportunity and called the owner. Within a matter of only a couple of weeks, I had gone from being the owner of a small condo to being the landlady of that condo and a tenant of another.

This is how I first learned about the power of cash flow. As landlady, I received $1,100 each month for the smaller, but nicer, unit that I owned. As tenants, we dished out only $1,000 per month for a larger unit that was rougher around the edges. The net result of this move was an extra $100 each month (plus a lot of extra space!).

Having considered real estate investing for much of my life, this first taste of being a landlady was thrilling! Plus, I discovered that it really wasn’t that hard. A few months later, I enrolled in an on-site real estate–investing program at the Investors United™ School of Real Estate Investing. Over the course of a full year, I purchased my first two investment properties, which I found by sending letters to landlords of properties along busier streets in popular areas of town.

I ended up selling that small condo just as the housing meltdown was beginning, a move that I was happy about since the condo fees seemed to be steadily increasing. The two rentals were breakeven with respect to expenses and income, with much of the maintenance and repair costs coming out of my regular salaried income. We eventually made a change that had a powerful impact on our cash flow. We switched both properties into “house-shares.” In this way, instead of renting each house as a whole, we rented to separate individuals on a room-by-room basis. Given that the homes were both within walking distance of a major university, and that the rents were considerably lower than they would have been for a one-bedroom apartment, it has always been easy to rent by the room. Most of all, our tenants have enjoyed the sense of community that our house-shares offer.

In the aftermath of the housing crash, we bought our next three homes to aid our retirement goals. For two of the three, we temporarily leveraged my retirement funds using a 401(k) loan for the down payment, coupled with fifteen-year mortgages. For the third property, we converted my Roth IRA to a self-directed Roth IRA and used those funds to purchase a fixer-upper, which came with many life lessons! All the techniques we used, and many more, are described in detail in this book, as are our various successes and setbacks!

At this point, we have achieved the Level III Goal. And once the mortgages are completely paid off, in ten to fifteen years, we will have achieved our Ultimate Goal. At that point, the income from our handful of properties, after expenses, will be equal to our current income from our jobs. Our plan is to pay down the mortgages on our existing properties as quickly as possible. Before retiring, however, we plan to use the monthly income from the rentals to pay our daughter’s future college tuition. We will then use the income to fund our safe, comfortable, and financially self-sufficient retirement.

We feel a certain sense of calm knowing that we will never have to worry about whether we will run out of money in retirement or have to work for the rest of our days. Sure, we have other retirement funds doing their thing in their traditional mutual fund–based retirement accounts. If we’re lucky, we may also have Social Security benefits in some form or another. But, because we have used rentals—like chickens—to create an infinite flow of eggs, rather than just building up one risk-laden, finite “nest egg,” we know that we will have created a safe and secure retirement not only to last the rest of our days, but also to provide income security for the next generation. And that feeling is priceless.