Christopher Shank NMLS 2562885

Oscar Wilde once said that “imitation is the sincerest form of flattery”. The full quote isn’t terribly flattering on the whole, but the guy did have a point. We learn best by observing others and then modifying those actions to best suit our particularities. When I became a Marine, I initially modeled my behavior after my Drill Instructors, but then gradually eased off in the intensity department until I became more socially acceptable (standing at parade rest when talking to a civilian out in town is kind of looked strangely upon).

Anyway, as a loan officer with a specialty in commercial financing, one of the most common needs that I find hopeful real estate investors looking for are examples; they want to learn how successful investors structure their empires with the hope of learning a thing or two about them. To that end, I’ve dedicated this article to highlighting some of the different real estate investing strategies that I’ve encountered over the last few years. I’ve changed the names of these people for the sake of preserving their privacy.

One thing to note, before you begin. The people in these stories are (with the exception of their names), real people. What makes their stories worthy of sharing (their success) is due largely to their drive to succeed. Cindy relentlessly studied investment strategies to better help her mother manage properties when she was younger. Fred read practically every real estate investing book available to the Kindle while on deployment. These people succeeded not because they were “in the right place at the right time”, but because they surrounded themselves with knowledgeable people and never hesitated to ask questions or improve their understanding of how these systems worked. If you know a Gertrude, Harold, or Jeffery, please be sure to share their story with me- I’m always down to learn, myself!

Albert- Low Income Section 8 Rentals

Albert spent the first half of his adulthood working as a subcontractor for one construction company or another. He eventually got tired of watching his bosses rake in the “big bucks”, so he decided to try his hand at flipping houses. As an experienced contractor, he was able to singlehandedly knock out most of the work required to remodel a house, saving himself thousands of dollars in labor expenses. After a few years of flipping, an investor friend introduced him to the idea of holding on to properties instead of selling them.

Last time I checked, Albert owned over sixty homes, the majority valued around $60,000 to $80,000. He specifically seeks out houses in low income areas that are foreclosed upon or damaged. Using his own effort, he returns these houses to a livable condition and rents them out as Section 8 housing. As long as the houses remain in decent condition, the government sends him checks averaging $800 per month, per house.

In terms of financing, Albert provided the down payment for his first several houses using his own savings, but eventually became successful enough to work out a line of credit with a specialized investor. Last I checked, he’s got an open line of credit in excess of $5,000,000 to fund new additions to his empire.

Bartholomew- Professional House Flipper

Bart got his first taste of home remodeling back when he was a junior enlisted stationed in Maryland. He took advantage of a foreclosure sale to buy a house as-is to use as his first home. Only problem is- the basement of the house had flooded and stood stagnant for several months, which usually the best of conditions for wood framed structures. Still, Bart snagged this house for a little under $100,000, where the house had been appraised four years previous at a little more than thrice that value. Bart didn’t know the first thing about remodeling, but what he did have was an excess of fellow Marines who were willing to provide cheap labor, and a nearby convenance store to acquire the beer necessary to compensate his friends.

One year later, Bart got word that he was going to be stationed down in North Carolina, so he sold his first home. All told, he and his friends had completely restored the property, and it had only cost them around $80,000 to achieve this. Once down in North Carolina, Bart purchased himself a fixer-upper and repeated the above process using the experience gained from his first remodel. This particular home netted him $100,000 when he sold it four months later.

Bart elected to leave the Marine Corps and started his own flipping company. As of 2022, that company was flipping around a dozen properties per year.

Cindy- Self Financing Empire Builder

I’ve talked about Cindy before, so I’m not going to boil the ocean too much here. A few years ago, Cindy took out a HELOC on her primary residence and used the equity on that house to finance the purchase of a rental home in a nearby community. The rent she earned from this home was sufficient to both pay the mortgage on the rental property and repay her HELOC and then some. A year later, Cindy used some more of that HELOC line to supply the down payment for a second rental home.

It’s been a less than a decade, but Cindy now owns her own home and five rental homes, of which, only two rentals are still under financing. She’s opened two HELOCs on her larger rental properties, and altogether she’s got access to over $600k of credit with which to purchase new rental properties, as she identifies them. Now, Cindy still works a traditional job, but she earns enough money from rentals to contribute toward a nest egg to comfortably retire at any time, should the fancy take her.

Dave- Air-BnB Aficionado

Dave was stationed out in Camp Lejeune, North Carolina during the middle of his career as a Marine. This lucky guy managed to snag a house right on the beach and really didn’t like the idea of letting such a find go. After Lejeune, he was sent out to finish his career out of Camp Pendleton, California. In the time between, Dave used his North Carolina beach home as an Air-BnB. Turns out, a lot of people like staying close to the beach for some reason, and are willing to pay a lot of money for that privilege. Simply put, Dave made more than enough money during the summer months to cover his mortgage payments (even during the winter).

After leaving the Corps, Dave decided to purchase a property up in Gatlinburg to Air-BnB to tourists. Now, contrary to the above investors, Dave has limited himself to four rental properties, as that is the most that he can administrate singlehandedly. Dave understands that he could expand his operation if he were to pass administrative responsibilities to a third party, but has elected not to do so because he “doesn’t want to become a full-time landlord”.

Edward- Home-Grown Investment Group

Edward and his wife, Edith, decided that they wanted to take a stab at real estate investing, and invited two of their friends, Eric and Evelyn, to join their venture. Following the guidance of a friend, they established their own investment company and started scouting out properties. When a potential property was identified, as a group they would decide who was in the best position to finance that property. That individual would then use their own resources to finance the property, while their investment company would manage the property, rent it out, and repay the purchaser’s investment.

They learned a lot of lessons along the way, and while their particular path may not have been the most efficient, the things they learned are proving invaluable. Already, they have teamed up with local developers, financiers, and realtors with the idea of leveraging the equity in their current investments to finance larger products, like new builds and multi-unit dwellings.

Fred- Veteran to Millionaire in less than a decade.

Fred will always hold a special place in my heart, as he found a way to use the awesome VA loan program to build himself an empire worthy of the name. Fred started in his third year of active duty, using his VA loan to finance a quadplex. His mortgage at the time was around $3,000 per month, and he charged each tenant $1500. It should be noted that he lived in one of these units, but even then, not only was he living there essentially for free, but he was netting $1500 per month for his “troubles”.

The following year, Fred used a VA loan to finance the purchase of another quadplex, moving into it as a principal residence and charging each resident $1500. Now his empire was netting $4500 per month. The following year, Fred refinanced his first quadplex using a DSCR loan, freeing up his VA entitlement for- you guessed it- another VA-funded quadplex. Year after year, Fred would follow the same cycle. Eventually, he started earning enough money to completely pay off his DSCR loans, which freed up even more money with which he could do anything he wanted.

Fred retired from the Army after fifteen years of service. He could have pushed to twenty years to get his retirement benefits, but by this point he had ten properties to his name and was netting somewhere between $50,000 and $60,000 per month.