Your first rental property

It’s official: Kim and I have moved from Portland to Corvallis, Oregon. We closed our house—a 1964 day farm with a completely converted basement—at the end of August, and have spent the past six weeks moving and unpacking. I thought I’d have time to post the gory details of the purchase, but that obviously didn’t happen. We’ve been so busy!

The short version is this: After we bid $128K on our dream home bid (and still lose out on a cash bid), we’re close to joining another bidding war on a similar home. But we didn’t. While other people were bidding for a spot on the street from $589,000 to $707,000, we snuck into a home we liked better for $680,000—just $5,000 on demand. We got lucky.

And while I was concerned about the possibility of buyer’s remorse, I’m happy to report that it never happened. We love our house and we love Corvallis. How can we?

Corvallis is the best city for biking in Oregon. (Yes, better than Portland.) Our home isn’t a pedestrian’s paradise, but it He is Within range of two grocery stores and a few restaurants. Corvallis hardly experiences any traffic congestion. The city is surrounded by forested foothills filled with hiking trails. Every day, we have squirrels, deer, and wild turkeys in our yard. There are two dog parks nearby. Our neighbors are very friendly.

I can go on, but I won’t. You can get the picture.

We had high expectations from Corvallis, but the city has so far exceeded them. I’m not joking. This is it exactly What Kim and I have been searching for during our three-month search for a new place to live. They are our hollow stars.

And our house, while huge for two, also exceeded our expectations. Sometimes it feels like it’s tailored to us and our lifestyle. I know it’s early days yet, but six weeks later we’re happy.

Small real estate empire

Kim and I also love that we are really starting to build friendships in the city. I’ve been spending time with Jeff from The Happy Philosopher, for example, and Kim takes a weekly doggie walk with a neighbor. Last weekend we enjoyed happy hour with the real estate agent and his wife.

Michael Wray lived in Corvallis for maybe ten or twelve years. At the time, they stumbled upon the idea of ​​”financial freedom” without discovering the burgeoning FIRE movement. (FIRE is a clumsy acronym for “financial independence and early retirement”). Like many others who eventually found FIRE, these two invented their own version in a vacuum.

Michael Wray has slowly built a small real estate empire, which currently includes six homes. They will buy a place, live in it while improvements are made, and then rent it out when they are ready to buy another property. Their goal, which they are approaching, is for the cash flow from their rent to cover their monthly expenses.

Michael Wray's real estate empire

Last week, over cocktails and appetizers at Magenta, Kim and I questioned Michael and Ray about their experience.

“Now that we’ve settled here in Corvallis, we’re starting to talk about the idea of ​​buying rental properties ourselves,” I said.

“I just turned forty-nine,” Kim said. “My years as a dental hygienist are starting to take a toll. My back hurts. My shoulder hurts. My wrist hurts. I want to find a way to make money without killing myself.”

Michael nodded. “We are happy to share what we know,” he said. “But you have to understand that this is not a magical path to wealth. It is work. It may not be the same type of work you are doing now, but it is work. And it takes time to build an income stream.”

“I see,” Kim said. “I got it. It looks like you guys got it. Didn’t you tell us that you only hire college students? And they come back year after year after year?”

“We don’t rent Just For college students,” Ray said, “but most of them are students. At the moment, one of our six homes is being rented out to a “normal” family. But you are right. We have been fortunate that tenant turnover is low.”

“We try to maintain long-term relationships with our tenants,” Michael said. “We don’t want to be friends with them, but we do want to have good communication. We want them to come back every school year. This often means we don’t raise the rent. Or, when we do, it’s a very small increase.”

“That’s smart,” Kim said. “It makes tenants more loyal and prevents turnover. Staff turnover can potentially be difficult.”

Michael agreed, “It is.” “We’d rather keep our tenants in their premises at rents a bit below market rate rather than deal with a turnover every year. When someone moves in, then we can move things around to match the market. Besides, building strong relationships with our tenants seems to help maintain Their motives for being interested in the place. And We’re starting to see it helps when their siblings come to school in Corvallis. They contact us because their brother or sister had a good experience with us.”

I said, “I like your moral style.” “Hearing your talk about this makes me want to learn more about real estate investing.”

“You are I know I want to learn about her,” Kim said. “I’ve been saying that for years.” (She has!)

I said, “You know, many of my colleagues work in real estate investing. I talked to them about it, although I didn’t follow it myself. Do you read any of the real estate blogs?”

“Not really,” Michael said. “I am familiar with Paula Pant at Afford Anything, though. I love her stuff.”

I said, “Paula and I are good friends.” “We’ve been close since 2012, often calling or texting to keep up with life. In fact, we just stopped by last week at Fincon in Austin. She asked me to help promote her real estate course.”

“You have to do it,” Michael said. “I haven’t seen the course, but she has solid information on her site.”

I thought for a moment.

“You know what I am Should Do,” I said. “I have to help Paula promote the course, sure, but more than that I have to get the course myself. I must take it I Learn more about real estate investing.

“Yes, you should,” Michael said. “It doesn’t mean I have an ulterior motive in getting you to buy more real estate.” We all laughed about it.

“Do you know what might help you?” I said. “When a rental property is on the market, you send in a video analyzing its potential. I love those, even if I don’t quite understand everything you’re talking about. I especially like the spreadsheet you use to solve the numbers.”

“It’s no surprise,” Kim said.

Would you like to record a YouTube video explaining your property rental spreadsheet? I asked. “I can play with this spreadsheet myself while taking Paula’s course at the same time.”

“Challenge!” Michael said. “I will record a video for you next week.” This is exactly what he did. Here’s Michael explaining the spreadsheet he’s using to screen potential rental properties.

Your first rental property

I recently read Todd Treseider’s book How much money do I need for retirement? I might write a full book review at some point. The main thing to understand right now is that Todd thinks it’s somewhat risky to use the four percent rule as a measure of financial freedom. He makes a compelling argument that it is safer to define financial independence the way Vicki Rubin does Your money or your lifeThe point at which your passive income exceeds your expenses.

While my recent move to Corvallis has led me to become financially independent again when defined in terms of the four percent rule, I Not Financially independent on a cash flow basis. My expenses exceed my passive income. I’d like to change that. And I think that rental property can be part of a strategy to do that.

Your first rental property

This morning, I signed up for Your first rental property, Real Estate Course Bula Pant. Reading the sales copy on the landing page was fun. I generally hate sales pages, but it was as if Paula had written this with me in mind. Seems as if the course is perfect for my needs.

I think I know Paula personally who helps me. Over the years, she and I have talked a lot about her various real estate adventures. I watched her slowly build her rental portfolio. Plus, I know she’s smart and trustworthy. If I’m going to pay anyone for a course in real estate, it’s Paula.

I also love and trust Chad Carson. Coach Carson’s real estate courses might also be a good option, and I might look into them for myself in the future.

Here is the need. Get piece of ground From requests to promote books, courses, and events here at Get Rich Slowly. I almost always refuse. I never wanted this to be a platform for product promotion. I want GRS to be a platform for education.

However, I enjoy sharing books and events that I think you will find valuable. That’s why I’m keen on Ramit Sethi I will teach you to be rich. That’s why I personally participated in this year’s EconoMe conference, and why I’m urging others to join us in Cincinnati next month. Some of these things are great and should be shared.

Obviously I can’t yet guarantee the quality Your first rental property, but I cut my own money to buy it. (“Did you mean to buy the course?” Paula’s assistant emailed me. “Yes,” I said. “I want to take it.”) I’ll ask Kim if she wants to work through the course together. I think it would be fun to do as a couple!

And who knows? Maybe in a few years we’ll have some of our rental properties…

Your first rental propertyIt, like many online courses, has a limited window for availability. (I think Paula only offers it once a year.) Sales for this collection end on October 14th. Get Rich Slowly earns a commission on every sale through our site.

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