7 years ago, after years of searching, we found the beauty below and thought, “This! This is the house that will launch our real estate investment career.”
Obviously, that’s not true. We were just looking for a home, a place to live, a roof over our heads that was ours. Real estate as a form of investment was still just a twinkle in my eye, and something that Kristina was not that into. But things change.
If you’re a long time reader of the blog, then you know the story with our first house in Simi. It was a total passion project that involved a lot of blood, sweat, and a knock down, drag out fights about backsplashes. After living there for about 6 years and building some equity in the home, the idea of real estate investment had moved from a twinkle in my eye to a pretty regular conversation we were having. Kristina was now open to the idea, but she was only interested in a vacation home that we would rent out (she had fallen in love with our Simi house) something like this little gem below perhaps.
And that is how our conversation actually got under way. Kristina was on board for tapping our equity to buy a little vacation home that we could rent out when we weren’t using it, but she wanted to keep our Simi house. The story was already outlined in greater detail here. But once Kristina was on board with selling our house and moving to Ventura, all of my dreams were coming true.
Ventura is an interesting place though. There weren’t a lot of single family homes in the area we wanted to live, but multi-family homes seemed plentiful. It was a change of plans for us, but this is the way we sort of fell into house hacking. Long story short, house hacking is when you live in part of a home and rent out the rest to (hopefully) cover most or all of your mortgage payment. So we bought 3 units, are living in one and renting the other two. We are also trying to convert a studio space into a fourth unit and we are looking at using an unused portion of our main house as a fifth space that we would Air BnB. That’s five total units. Sort of by accident.
Another thing that happened by accident was the concept of a value add buy and hold. Value add is when you buy a property that you can add value to, whether by raising rents to market price, by renovating or rehabbing value into the property, or buy adding extra units or ways to generate income on the existing property. By the grace of God, our property allowed for value add in ALL of those areas. Again, this isn’t anything we knew before we bought the house. But the more research I do and the more I learn, the more I see just how rare and special a find this place was.
Buy and hold just means that we are planning on keeping this property long term. We aren’t flipping it or trying to resell it once we’re done. The plan is to collect the monthly rental income for years to come. It’s actually a foundational part of our retirement plans now.
So that’s the background on how this all started. It is kinda amazing how all these “accidents”(aka huge answers to prayer) have provided us with something we could have never dreamed of ourselves. It has also opened a can of worms for me. I now want to own 12-15 units by the end of 2019 and it’s my goal that every property we buy is a lot like the one we just bought. These units will be the pillar of our retirement. We still have 401Ks and IRAs and 403Bs. We still have other investments, but we believe in real estate and want the majority of our retirement assets to be in income generating real estate.
The next question, as soon as we finish this place, is, “What’s next?” This is the current conversation topic of most of our “dreams and drinks” these days.