Recipe For Stay-At-Home Dad

Before any time passed my student, Dan, was hot on the trail in pursuit of rundown multiple unit properties.

This is the story about one of my early students who attended my real estate Fixer Seminar. Raising a young family, Dan dreamed about a new career working from home so he could watch his children grow up. When I first met Dan he was a traveling computer salesman spending most of his time on the road far from home. 

This is also a story about the magic of real estate investing, and how selecting the right investment vehicle can make dreams come true.

Dan was like many students who have attended my seminars! He knew real estate investing was the source of wealth for many, including several of his friends. In fact, Dan had already started investing before he showed up in my classroom. He was up to his neck fixing and upgrading an old Victorian style home. It seemed like the more money he spent, the more he still needed. 

The truth was, Dan was hopelessly stuck with what’s commonly called “An Alligator”; a property that eats more money than it’ll ever be worth! On the bright side, the Bay Area market was strong so he escaped without suffering a huge loss.

At this point Dan was no closer to his stay-at-home dream than when he started. He had however learned a valuable lesson! It’s impossible to stay at home or change careers without creating a new source of income! Investing in old Victorians – or even single family houses heavily mortgaged is like a bridge too far! Without some change, Dan realized his kids might be drawing Social Security before he ever became a stay-at-home Dad. So the big question Dan brought to my seminar class --- Is staying home even possible? Can it be done by investors without a ton of money to start with?

The answer is absolutely yes, but one must follow or copy a proven strategy. It’s a narrow path and requires strict discipline and a large dose of what I call stick-to-itiveness. 

You must acquire only properties that will pay you to own them! Without pay, it’s impossible to stay at home with the kids. My teaching model is multiple unit income properties. The reason is because when multiple unit rents are increased, the added income is generally a significant amount and it’s almost total profits in the investor’s pocket. For example, acquiring a 10 unit rundown tired-looking and under-rented property. It’s not the least bit uncommon to find the existing rents $200 or more below the current market rates. Rather than working like a horse fixing and upgrading an old Victorian with no predictable payday, you would now have a great opportunity to create $2000 worth of new income for yourself.

Rarely have my seminar students applied their classroom lessons with such speed and purpose. Hardly any time passed before Dan was hot on the trail in pursuit of rundown multiple unit properties. He set up arrangements with several local real estate agents to assist him in the hunt. 

The kind of properties Dan was searching for are not just sittin’ around on every corner. Obviously, well-kept, nicer-looking units command premium prices and the rents are already at top market rates. Part of Dan’s job was teaching agents that these kind won’t work unless you’re already rich or can pay all cash.

While chasing down leads, Dan acquired several smaller under-rented duplex properties from motivated sellers as he practiced his negotiating skills. Then suddenly, almost outta the blue, all the searching paid off. One of his agents brought him the tip he was looking for! 

Twenty-four (24) houses all in one location occupying both sides of a short dead-end street. The houses were older, rundown, two and three bedrooms with covered carports. Maintenance was not simply deferred – it didn’t exist. Obviously, the tenants were paying far less rent than the current market rate. Dan’s dream was about to come true. This property had the potential for stay-at-home earnings.

An elderly lady was willing to provide private financing with terms that allowed Dan some breathing room. In other words, with decent management, Dan could expect a respectable cash flow right from the start. Negotiations opened and closed very quickly because Dan knew he had discovered a potential gold mine. Allow me to emphasis a point here because there’s a valuable lesson involved. Dan was prepared to act. He had enough training under his belt so that no time was lost deciding what to do. Dan knew exactly what to do and he acted quickly.

I often describe a property like Dan had just found as: “A property with all the right things wrong.” Although the units were older, rundown and needed some tender love in’ care, Dan recognized that an inexpensive clean up, along with long overdue repairs and a shiny new paint job would immediately increase the value. Even more importantly – allow for substantial rent increases, mostly paid by the Federal government’s guaranteed Section 8 subsidies.

Guaranteed rents, completely sheltered by tax deductions and a healthy cash flow were exactly what the doctor ordered for Dan. For less than a million dollars price tag, he had acquired a property that would provide financial security for himself and his family. Obviously, Dan’s computer salesman days were only a memory. Stay-at-home dad had become a reality!

Often I’m asked how Dan accomplished his career-changing dream so fast. Obviously he can explain it much better than me, but in my opinion, he accomplished the task the old fashioned way! He learned what needed to be done and he dedicated himself to a proven strategy that would provide the benefits he wanted.

Remember what I told you earlier, you must acquire only properties that will pay you to own them! Students sometimes ask me if these multiple unit older properties grow in value and appreciate like single family houses. I’ll answer that by telling you that Dan recently traded his career-changer property for over three million dollars.

Earlier I told you – the big question Dan had asked me at my seminar: “Is it possible with only limited funds to acquire an income property that will create enough cash flow so I can become a stay-at-home investor?” You’ve already read my answer, but if you’re reading this blog, I want you to hear from the man who did it.

I asked Dan if he would share his success secrets with my seminar students. Specifically, I asked if he would jot down his most important “Success Tips” – sorta like special steps students could follow! 

Dan went a step further and is in the process of creating a mini-course titled, The 5-Day Beginner Roadmap, Confusion to Clarity to Cash Flow. Dan's says that he used the 5 main steps in this roadmap to focus on the "prize" which is cash flow......and saved "tons of wasted time" in the process.

Click Here to get notified when launched. Thanks.