13 years after he became a real estate investor, Chad Carson realised he didn’t have any real success.
As a guest on the Mad Fientist podcast, he said that after he graduated from Clemson University, he just had $1000 in the bank.
He spent the next year looking for properties for senior investors to buy. He saved enough to get his own property. He started ‘house-hacking’ to increase his wealth.
Carson said on the podcast, “I bought a house, a quadruplex that had four units. I lived in one unit, and then I rented the other three units out. And so I was basically living for $200 a month by getting $400 in rent for my three tenants. So that’s $1,200 coming in. And my mortgage, taxes, and insurance were about $1,100…So, I was living positive by using my skills as a real estate investor, and by living in an apartment that kept my overhead super low, even when I went and bought my own property.”
Business Insider writes, “This real estate strategy – along with another of Carson’s favourites called “live-and-flip,” where you buy a home, fix it up over a few years, and then resell it for a nice profit – are the best ways to increase savings and maximize earnings when you’re young, he says. The key is to treat your first home as an investment and avoid settling down too early.
“After spending the next year scouting properties for seasoned investors to buy and flip, Carson saved up enough cash to buy his own property. Soon, he started growing his wealth through a strategy he calls “house-hacking.”
Carson says:
“I bought a house, a quadruplex that had four units. I lived in one unit, and then I rented the other three units out. And so I was basically living for $200 a month by getting $400 in rent for my three tenants. So that’s $1,200 coming in. And my mortgage, taxes, and insurance were about $1,100,” Carson, now 37, explained on the podcast. “So, I was living positive by using my skills as a real estate investor, and by living in an apartment that kept my overhead super low, even when I went and bought my own property.”
This real estate strategy – along with another of Carson’s favorites called “live-and-flip,” where you buy a home, fix it up over a few years, and then resell it for a nice profit – are the best ways to increase savings and maximize earnings when you’re young, he says. The key is to treat your first home as an investment and avoid settling down too early.
He explains:
“Particularly, in your first 10 years, if you make mistakes of buying emotionally on your residence as opposed to buying in a very calculated manner by making your residence a house-hack or a live-and-flip, or just renting and investing that somewhere else, the magnitude of that mistake is huge 20 to 30 years from now.
“It’s like $700,000, [or] a million-dollar difference, for somebody 20 to 30 years later who made the choice to make their first home a nice home, a great neighbourhood, and being in the top high school as opposed to making a decision to treat your home like an investment or just rent. It’s a major, major difference.”
Carson says that you should have some nest egg before you start investing on property rentals.
He adds, “Rental properties are wonderful for building wealth … [but] they’re not going to produce a lot of income on the front-end – at least not consistently – because you might make $200 a month on a rental property, but then what happens if a year and a half from now, the heating and the air system goes out on that rental property? That’s a $4,000 to $5,000 hit… And so really, the rental property game, as opposed to flipping properties, is all about generating big chunks of cash that you can use to pay your bills, and hopefully, to save money.”
Carson used his earnings from his flip and buys and house hacking to build his nest egg for future investment.
Business Insider reports, “Today, he and his business partner manage 90 rental properties, mostly in and around his hometown in Clemson, South Carolina. Carson now lives off passive income from those properties, affording him the ability to spend this year living in Ecuador with his wife and two young daughters.”
He says, “In my mind, the game of rental properties is eventually getting it free and clear of debt, so that you have a very low risk, high income investment that allows you to go to Ecuador and do whatever else you’re going to do with your life – leave your job or have a little independence to do other things… my main recommendation to everybody, whether you get into real estate investing or not, is if you’re early in your career, or if you’re growing your wealth … you either need to do the house-hack, do a live-and-flip or rent somewhere because those are your three most financially viable ways to treat your residence.”
The post How a 30- Something Started With $1000 And Is Now The Owner of 90 rentals appeared first on Australian National Review.