Making 6 Figures Investing After Quitting His $40K/Year Job

Dave:
Today we’re talking about what happens when you go all in. Our guest today left his job on a break to go sign a HELOC that he was going to use to invest. And when he came back to his job, he also brought his two weeks notice and a plan to go full-time in real estate. Two years later, he’s made more than 30 deals happen. Hey guys, it’s Dave and I’m here today with Henry Washington and a guest he brought us investor, Jon Boyd from Arkansas.

Henry:
Yeah, man, John’s got a pretty amazing story. I mean, he’s literally done the thing that people dream about doing when they start learning about real estate investing.

Dave:
He did the Jerry McGuire. He just rage quit. It’s amazing.

Henry:
Who’s coming with me? Yeah, exactly. No, but he’s got a fantastic story and I think people are really going to enjoy it, but learn a lot about what it truly takes for someone to do something like this. So let’s jump into it.

Dave:
Jonathan Boyd, welcome to the BiggerPockets podcast. Thanks for being here.

Jon:
Yeah, thanks for having me. This is great.

Dave:
Yeah, we’re excited to have you. Glad that we could pull this off. So Jonathan, it sounds like you just started in real estate a couple of years ago. What inspired you to get started?

Jon:
Yeah, so full-time was a few years ago, this journey started back, oh man, I probably was in my young twenties, just met an old guy. He was a pharmacist as his full-time job, but he had a few investments down near the University of Texas, and he just put a bug in my ear. He was telling me how well it was doing, and he said, Hey, you should invest in real estate because people, one, always need a place to live. And two, they’re not manufacturing any more land, so put your name on it. And at 21 years old, that made sense to me. And so that is what started the curiosity. And then for several years it was the sort of sidelines looking into it, not really participating in it, almost kind of like a hobby more than anything else. But then a few years ago, I actually went full-time into it.

Dave:
Where did this magical pharmacist who just gave you this great advice come from years? I just met this old guy just on the street. Whoa, whoa, whoa, whoa, whoa. Not that kind of magical pharmacist. You guys said it. Not me.

Jon:
Yeah, I worked in pharmacy at the time and he actually went to the church that I went to, and I, he’s just one of those guys that never too pretentious and just really down to earth. But then as he starts talking, I’m like, wait, you have a house where and warehouse? And I’m like, I know what a pharmacist’s salary is. You didn’t do that on a pharmacist salary. And that’s when he started telling me, oh no, I got some investments.

Henry:
And what year was this when you were learning about real estate?

Jon:
That very first bug? Man, that would’ve been 2013 or 14.

Henry:
Oh, okay. So how long did it take you from when he told you to buy real estate to when you actually bought some?

Jon:
Okay, so that’s curious because every house that I have purchased since that time was with real estate in mind. However, I didn’t have the best knowledge. So the first house my wife and I bought it was for us to live in, but we didn’t buy our dream house. Like, no, we want to buy in a place that it’s going to rent. Well, a good part of town. And it wasn’t our dream house, but we bought it with the intention to rent it, which is exactly what we did. And we lived there for a little bit. And then we moved to where we are now in northwest Arkansas. Our house we bought here was a duplex. Obviously you don’t buy that unless you intend to invest. And then since then, it’s just been investment after investment.

Henry:
And what year was that when you bought that duplex? The house hack?

Jon:
Yeah, the duplex we bought in 2017. And then in 2020 I was in the circles. Henry was in, we both knew the same realtor, just kept bumping into each other as I was in it casually, and he was in it more seriously at that time. And so in 2020 I just finally said, you know what? I’m going to try it. I was still working full time. So I looked at what everyone else was doing, sent some mail, bought the house I’m currently living in, had a few other deals that I handed off to others. And then in 2022, I was able to use what happened in 2020 as proof of concept in order to allow me to accelerate it into a full-time career.

Henry:
It sounds like you did a couple of deals between 2020 and 2022, and then you were like, you know what? That’s enough information for me. I’m going to go, is that?

Jon:
Well, it’s a little bit less. So I actually, I had a health issue that kept me from doing more. So I bought the house I’m living in, and then the health issue, I just kind of hit the wall. So the deals that I had, I ended up kind of wholesaling ’em and giving ’em off to other investors that I could have capitalized on. But then as I was recovering from that health issue in 2022, I just got so sick of my job that I was like, you know what? I’ve seen real estate work. I’m going to try again.

Henry:
Let’s put some specifics behind that because a lot of people may hear this and think, you know what? I don’t like my job either. I’m going to quit. You didn’t truly just quit on a whim. You had proof of concept, you sent some mail and you got some deals. So talk about what that first mail campaign looked like in terms of volume. How much did it cost you? What kind of deals did you get? How much did you make?

Jon:
So the first campaign, it was, I just did pull the list, I think from list source at the time for 800 addresses. So I actually did a method where I was like, where would I like to live if I happened to get a house? And so I drew on the map and I was like, yeah, I’d like to live there if I get something. And then I just sent out the mail. And of course at that time I had Google Voice, I was still working in a pharmacy and I was working where I had to be all gowned up. So they would see me literally ripping off the medical equipment to go and answer my phone. And so tried to have my wife bless her heart, try to help me, but we had a newborn at the time, so it was very rare she was going to answer that phone, nor would I expect her to.
So sent out the mail from that first mailing campaign again, this is in 2020. I secured the deal. The first deal I actually secured was actually just a few months after I sent out the mail, and it’s the house I live in now. So it was a little too bad. Two bath house, got it for 80 5K, converted the garage, so made it a three, two, moved in on the day we moved in all costs, rehab, holding everything. We were in it for one 20 and it appraised at 180 day one, and that we refinanced it in 2021. So we’d already built that equity right off the bat. In the meantime, I had two other deals for sure, that if I hadn’t have gone through the health issues that I did, my realtor told me, he’s like, man, that was a $40,000 flick. So from 800 mailers, I could safely say I could have made close to a hundred, a hundred K in profit.

Henry:
Do you mind sharing what you were making in salary at the time when you quit?

Jon:
Sure. No, that’s great. Less than 40. I was making, I think with overtime like 38,000.

Henry:
So a hundred K would’ve been substantial.

Jon:
Oh yes. Oh yes. A hundred K was substantial.

Dave:
I just want to take a second to make sure everyone listening understands what we’re talking about when we’re talking about sending letters and this just general concept here. And Jonathan Henry, please correct me if I summarize this poorly, but sending letters is one of a couple different ways that you can find off market deals. It belongs in this broader category that is often called as direct to seller. The general idea is that you are trying to identify homes and sellers who may want to sell to you as the investor before putting it on the open market or on the MLS. And you might hear this call driving for dollars. It sounds like Jonathan, you were doing it more maybe in a little more technological way where you’re using a map and building lists digitally and then sending out letters. But the whole idea is that you essentially have to send out a lot of these things and a certain amount, hopefully you have a high conversion rate, are going to get back to you. And it’s just this funnel that you have to work until you identify a couple of deals that you can hopefully buy off market. And in theory, you’re going to buy for less than it would have cost if you were buying it on the MLS through an agent, through a traditional process

Henry:
That’s 100% accurate. You’re looking to find people who need to sell and not want to sell. And so that typically requires you to cast a wide net. Most of the people are going to fall through that net, and the ones that stay in the net are typically the ones who truly do need some help.

Dave:
Alright, it is time for a break, but stick with us on the BiggerPockets Real Estate podcast. We’ll be right back. Welcome back to the BiggerPockets Real Estate podcast. This off market deal finding strategy is kind of like a business in itself. You have to get good at it. And so do you think you would’ve taken this approach had you not sort of learned how to do this? I don’t know if it’s an advanced maneuver, but it’s a less common approach to deal finding. Do you think trying that out is what gave you the confidence to do this?

Jon:
Maybe. I think it’s a mixture of things. So I thrive when I’m helping and talking to people. So even to this day, going to sellers houses, sitting with them in their kitchens, finding out why they’re selling, why they called me, that’s what gets me up in the morning. And so talking to people and even having hard conversations wasn’t that foreign to me. I think it was in my area, again, the R that I went to, we had a bigger pockets meetup. Of course, Henry was there at that time doing stuff, and I don’t know if Henry remembers this. I actually got on a five minute call with you to find out. I’m like, how do I send mail? And that was it. I was like, okay, you send mail. And I was aware of Bandit signs, but there weren’t many in our market. I was aware of websites, but of course, if you Google start your own website or whatnot, then it’s just like, okay, I don’t want to do that.
Plus I was working full time, so I was like, well, what can I manage while working a full 40 hour week W2 job when I came across mail and I thought, okay, phone calls again, I knew enough. I was like, oh, I could have A-V-O-I-P phone number and my wife can help answer. And so that was sort of what started me there. And then in my research, I found a mailing company that was full concierge. I send them a list and they’re going to take care. They’re going to send the mail, they’re going to handle the removals. I just send ’em a quick text or an email. It was just set it and forget it. I said, that’s what I need because I’m working full time and I have four kids. So

Dave:
I mean, it’s true. And I totally respect that. You say that you thrive when you’re helping people and talking to people, but did you even have a plan to replace that income? No.

Henry:
Okay.

Jon:
This is my favorite story to tell. So in 2022, I’d been working as a pharmacy tech for years. I was good at what I did, but again, still an entry level job, and I was working as a chemotherapy tech in all respect to ’em. That was the pinnacle of my, that’s what I want to do. And then I had my performance review and they’re like, Hey, you’re a rock star. You’re a leader. You’re probably going to have a leadership position. You’re indispensable to the team, and here’s a two point a half percent raise.

Dave:
Yikes.

Jon:
And I thought, wow, thanks for the love. And so I thought, you know what? Why not? And so as far as money at the time, I had enough money to live for a few months, and at this time I had four kids. So my wife and four kids, I had enough money to live for a few months and send out mailers. And so I figured, Hey, if this thing just goes up in smoke, I’ll just go get another job. But I was sick and tired of it, and yeah, went for it.

Dave:
I got to tell you, we interview a lot of people on this podcast. Most people say, I invested from 2013 to 2022, and then I stopped investing. But you just went the complete opposite approach. You sat out the decade before, and then as interest rates were going up in 2022, you just jumped right in. So what happened in the next few months?

Jon:
I was at that job and I was so sick of it, and so I was like, I need some money. So I went actually and got a HELOC on my house. That’s when I realized, oh, interest rates kind of stink right now. But I remember because I got that heloc, of course they’re verifying W2 and all that. I’m with my banker and I’m like, okay, are we done? I went to sign and she’s like, yeah, we’re done. I had told work, Hey, I’m taking a long lunch. I’m going to go sign some papers at the bank. I came back to work from that with my two week notice. And so I went and signed the paperwork for the HELOC on my lunch break, came back with a two week notice and said, I’m out.

Dave:
Did you get the two week notice notarized while you were at the closing?

Jon:
No, no. I was scared that if I did, they’d be like, wait, we just verified your income. Whatcha are doing? So I was scared. Good point. That’s why I even said to the banker, I’m like, so no more job verification or income checks?

Dave:
And she’s like, she’s like, yeah, why do you ask?

Jon:
That’s what I thought. She never did ask though. She was just like, yeah, you’re good. You can write a check today. I was like, alright. So yeah, I quit the job and took about a month or so to prep and recuperate, but I just did what I had done before, pull the list, sent out mailers, and I just did it to a greater scale and that was it.

Henry:
And so once you did decide to quit, what did that first mail campaign look like?

Jon:
So the first mail campaign was I pulled a list of high equity, so many years in the house. And like I said, I didn’t want to do McMansion, so I kind of limited the square footage, limited the estimated A RV. And then again, like I said, I drew that area on the map and I essentially messed with the criteria until I had a list that I wanted to send, which was right around eight to 900. And so yeah, I just kind of messed with the square footage a little bit, messed with the age a little bit until my list had enough. And then I set them up on a mail campaign to get one letter a month for six months. And it alternated every now and then. And I will say on those letters, and pretty much every letter I’ve sent out since then, I’ve been very particular. I don’t just send what they tell me. I actually choose the message, choose the font, choose all of that, and then send it

Dave:
Out. Sorry, I can’t get over the fact that you just quit your job without a plan. That is so contrary to what I would’ve done in that situation. But do you have a high tolerance for risk? This is like, I don’t know if you guys have read that book, burn the Boats, but this is total burn the boats, no plan B, just go for it kind of mentality.

Jon:
Well, actually, yes. So a big part of my story is the burnout that I went through. And when I say burnout, it wasn’t like, oh, I’m tired of work, I don’t want to go back. It was like I can’t even choose what to wear. And if I didn’t think about it, I probably wouldn’t have even fed myself. I mean, I hit the wall, I had enough muscle memory to go to work, do my job, come home and lay on the couch, and that was it. And what I like to say is during that time, I lost my margin for bs. And so when I was at work and I got that performance review, I’m like, well, this is bs. So it was kind of like, man in my mind when I was quitting my job, there’s two things going through my mind. I said, first off, whatever happens to me if this fails is not as bad as my experience in burnout. So secondly, I was only making 38, $40,000. If it didn’t work, it wasn’t going to be hard to find a job that would pay that.

Dave:
That’s true.

Jon:
And so I literally was, worst case scenario, three or four months from now, I’m back working in another pharmacy.

Dave:
Well, good for you, man. I’m sorry you had to go through that difficult situation. Sounds like a really challenging experience, but good for you for figuring it out and using that as sort of a means of reframing your life and reprioritizing what you wanted to do and how you spent your time.

Henry:
Yeah. Can you give us some context around what did that first mail campaign after you quit, what did that produce for you and how is that different? Or is it different at all from what you’re currently doing today?

Jon:
Yeah, so the first one, I essentially repeated almost verbatim what I did the first time, just instead of 800 addresses, I picked 5,000 addresses and I didn’t have enough money to send it, six months worth of mail, but I had enough for three. So I sent for three and figured if it stinks at month three, I’ll go back to work. If not, I’ll find money to send the next three. And so I sent six letters, one a month to 5,000 addresses, and it was month three that I got my first contract.

Henry:
Oh, wow. You remember that deal? Can you tell us about it?

Jon:
Yeah. So actually he was one of the first guys that ever called me, and I just kept in touch with him every one or two weeks, just call him, see how he was going, being like, Hey, you going to sell that house? I drove by it today. It’s still empty. And so he really wanted more. I just kept working with him. And finally he called me back and he was like, man, I don’t want to talk to anyone else, and I’ve invested so much time talking to you, I’ll sell it to you. So we bought it for 150,000, and then we put about 32,000 into it. We ended up putting more because when we went to sell it, it didn’t appraise, but the appraiser literally told us a little, they had a laundry room that was at the back of the garage that originally wasn’t enclosed, but they had enclosed it, but they hadn’t dropped HVAC there, so it wasn’t counted as square footage. And he literally was like, Hey, if you close this in and fix it all up and make it up to code, you can count that as square footage. So we struggled with appraisal, but we put about, I’ll just say 30, 30 to 32 into it. And then on profit, we sold it for around 2 45. And after holding costs and everything, I think we made 28 off of that 28 profit.

Dave:
And how long

Jon:
Bought it in October, closed on it in February to sell it.

Dave:
Okay. So in a third of the year, you made three quarters of your normal salary. That’s pretty damn good.

Jon:
And in the process, it’s like we had that one got it all fixed up and put on the market. Literally the weekend we were putting it on the market, I got another one under contract and I went with a partner on that one. And then we had that one. And then right about the time I sold the first flip, I got another one under contract. And that’s when I was like, okay, this thing’s working.

Dave:
That’s amazing. Well, good for you, man. Took the leap and it paid off. Can I ask you, Jonathan, when you talk about that first guy and you talk to him over the course of a couple months, I’ve actually never done this. I’ve done one direct to seller deal in my life. It was the first phone call I ever made and it worked, and I decided to quit. I’m never going to try

Henry:
It again. You betting a thousand on Andrea thousand.

Dave:
I’m like, what are those guys get calls up from, the minor league, hits a home run, and they get sent back down to the minor leagues and never comes back again. You said that you’re great at and you really like helping people and talking to people. So can you talk about how you nurtured that relationship so that when that guy, he was like, I only want to talk to you. How did you create that dynamic with this person that presumably you’d never met?

Jon:
Yeah, yeah. And I hadn’t met him. He was out of state. We were in northwest Arkansas. He lived in Tulsa, man, just listening to their stories and relating with them. And so with this guy, he was an older guy whose wife had died, and we just connected on a lot of different stuff and he had a lot of cool stories. He’d actually gone to L’Oreal in Paris to learn how to do hair, but then he is like this rough and tough cowboy. And so

Henry:
There’s a story there.

Jon:
And so I’m like, yeah. And so I would just call and I knew I could mention certain things and get him talking, and he enjoyed talking about

Henry:
It.

Jon:
I mean, there were times that we called and mentioned nothing about the house. It was literally just like, oh, hey, you’re riding your bike. Oh, they have bike trails here in northwest Arkansas. What are they like in Tulsa? And just kind of being interested in him as a person. And then when the house came up, I just would tell him, Hey, I’m doing it for a business. I like you and I want to help you, but if I’m going to help other people, I got to make some money. And like I said, he rejected my initial offer for months. And then like I said, finally was just like, I’m so done with this. So maybe I just wore him out. Maybe that’s actually what he got tired of hearing from me. He’s like, I don’t want to get another phone call from this guy.

Henry:
That’s how I got my wife, by the way. Just wore her down. Yeah. Yeah, absolutely.
That’s a good question, Dave, that you asked John, because I think it’s very easy for us as investors, especially when you’re in a position like John put himself in where you got to get a deal or you might not eat. And so it’s easy for you to look at a seller or a seller appointment or a house as a transaction. And when you get super transactional, that’s not relatable for a seller. And when you’re dealing, especially direct to seller, because there’s no intermediary, there’s no realtor in between that relationship, it’s very easy to forget that there’s somebody’s home and uncomfortable situation that’s at the end of that transaction because no one wakes up in the morning and goes, you know what I want to do today? I want to sell my house for less than it’s worth. Who can I call to do that? Right?
There’s reason or there’s pain associated with why they need to sell their home. And the more I think new investors or investors in general can stop looking at sellers as transactions and start looking at them and talking to them and treating them as people who need help. I think that you find yourself in a position where you do get deals because there’s a story behind why that person is even talking to you. Because if they just wanted to make money, they’d go call a real estate agent. It’s not about that. There’s something there. And we as investors need to be better at being good people and having empathy and just trying to be of service. Whether or not that means you get a deal. And I think that that means you’ll actually end up getting more deals because this isn’t about a transaction. It’s about how do you help someone who’s in a very tough position.

Dave:
Totally. And you were joking about wearing ’em down, Jonathan, but he could have screened your calls.

Henry:
Oh, yeah.

Dave:
He found value in talking to you. He didn’t have to pick up the phone. You were offering something to him and connected with him in a way that was mutually beneficial. I just think that’s super cool.

Henry:
So John, you did that first deal. You started the daisy chain getting deals after that. What does your business look like today? How many deals have you done? How many of those are flips or rentals? What’s your business look like now?

Jon:
Yeah, so since that time, I’ve done, I think it’s 24 or 25 deals. Only one was a wholesale, and it didn’t even count. It was to someone I knew who was a business partner on another project. I literally just had an older gentleman again, just trying to help someone out. And it was actually a monster flip project. And my wife came and said, you do not need that right

Henry:
Now. You should know what she said was, we do not need that right now.

Jon:
You stay away. And then my buddy, he’s like, if you can get him down to this, he said, I will pay this. Anything you get him above that, I’ll pay you as a wholesale fee. Which was also interesting. It was a creative finance. I wholesale a creative finance to my buddy. So I’ve done one wholesale. I have five doors as rentals. So most everything was flips mainly because I had to eat. So yeah, that’s kind of what it looks like now on par to do about 12 to 14 flips this year.

Henry:
That’s incredible. That’s

Dave:
Amazing. Good for

Henry:
You, dude. Super amazing, man. Congrats. All right, it’s time for one more break. All right, let’s jump back in with investor John Boyd.

Dave:
Tell us a little bit about the structure of your team. How are you doing 12 to 14 flips? You must be surrounding yourself with other people.

Jon:
Oh man, I’ve got four or five people that I need to hire

Dave:
You. Like four or five people doing mailers for me. I got a contracting team.

Jon:
Nope. I mean, I have an awesome title company. I have an awesome real estate agent. I’ve got a lawyer who owes me a lot of favors, so I keep him on retainer. Yeah, it’s kind of just me. I mean, I’m indispensable. My wife is indispensable to my business, but she doesn’t have a whole lot of fingers in it. She’s in the background maintaining house, maintaining kids, helping where she can. But right now I’m part of different groups and stuff, but my team is like, I make the calls, I pick the mailers. I mean, I hire mail teams. I don’t hand write a thousand lefts ridiculous. But as far as who’s making decisions, who’s gone there so far? It’s just me.

Henry:
So you have no employees?

Jon:
Zero.

Dave:
Super impressive. So how many GCs do you have at a time running these flips?

Jon:
I GC my flips too. No,

Dave:
Seriously, all of them?

Jon:
Yeah. Well, okay. Okay. That’s not true because most, one of my favorite new strategies is partnering. So I’ve got a partner who is also an agent and has a lot of cash, and his wife is a designer and likes project management. So the way this works is if I can get a deal that has enough margin and I get them to agree to a price, I hand it off to them. He throws his commission into the pot, she throws her fee into the pot, and we split everything 50 50. Nice.
And so I love it because it’s like I sign at closing when we buy and then say, PO tell me when to sign at closing when we sell, and then I sign at closing when we sell. And we just did, that was actually my second deal. I did that way, made about 20 5K. I just sold a deal month and a half ago, made 30 5K, and we’re about to list a third deal. We’re doing that way, and we’re both probably going to take about 40 in those cases. I don’t do that. But as far as GCs, I don’t have a gc. I mean, I have some that I can call if I needed them, but I don’t like most of their prices. So especially at the beginning, I had to do all that stuff. I did a lot of work myself on that first flip, but I just started calling around, getting quotes and kind of like sink or swim. I found these contacts. And then also, I’m around Henry and I’m around these other investors. I’m around our realtor who’s investor friendly, so I’m able to pull information, but actually vetting them and working with them, that was something that I did. And even to this day, it’s one of the things that I need to hire someone to help me with my flips. And so yeah, I hire the handyman, I hire the painter, hire the carpenter. I have a list of names that I call when I’ve got a property.

Dave:
You’re crazy, man, right?

Henry:
You want to hear something even more crazy. Address this elephant in the room. You said at the time when you were thinking about, or when you did your first deal, you had four kids. How many kids do you have?

Jon:
We have four.

Henry:
Four kids. And then how many bedrooms did you say that house that you bought as an investment property that you live in has?

Jon:
It has three now.

Henry:
Oh, so you added a bedroom to it?

Jon:
Absolutely. Yeah, absolutely. But I mean, hang on. This is what’s funny. I’m about to do it again. One of the properties that I bought, so we have four kids at the time, my oldest was four or five, and now he’s nine. And so I don’t care how nice it is. It’s a nice house, but it’s small. And now that those bodies are getting bigger that live inside of it, that space is getting smaller. And so one of the properties we just bought in July, we’re looking to move into it significantly bigger.

Henry:
Yeah, I did the same thing. I was rehabbing a property. We had just had our first kid in our house. We lived in a small house and it was getting smaller, and then my wife got pregnant and one of the houses that we were flipping started looking real good for us, so we moved into it.

Dave:
Jonathan, are there any other seller financing types of deals that you could tell us about that you’ve done?

Jon:
Yeah. Oh man. I just recently did one this year, and this is actually probably my favorite deal that I had. I have a client that actually Henry bought a house from her, and so we’re familiar with her. I went and walked a property, couldn’t give her what she needed. She found a great seller, which was fine, but we kept the relationship open. I would just call to check on her. She would call me and be like, Hey, do you know a guy that fixes mold? And yeah, I do. So she called me and she said, I have a problem. I have a house that I bought. And she said, I bought it in cash from another investor that’s in our area who does good work. And she said, I bought it for my grandson. And he was going to get his feet under him, kind of start getting his life on track, and he was going to buy it back from me.
And the original agreement was is that he would move in and pay rent to grandma for one or two years and then get the mortgage and make it his own. Well, she called me and it’s been four years and he still hasn’t done it. And she got a terminal diagnosis and she said, I do not want to be landlord in the last days of my life. I want to be grandma. So she came to me and she said, I don’t want him to have to pay much more rent, otherwise he’s not going to be able to afford it. He’s trying to get his feet under him, but I also don’t want to sell it to him for much more than this. What can we do? And so I said, the only way that works is if we do something creative. So the way we have it set out is I paid a certain amount to her, and it’s even in the county records, that he has the option to buy the house for me for a little bit more than I bought it from her.
Not a lot. And then in the meantime, he pays rent to me the same amount he was paying to grandma. I make $0 on this deal while I own it. Now, to be fair, I’m $0 out except for closing costs. So he has until August of next year to get his ducks in a row, if you will, get his financial house in order, and then get a loan for this property. And then grandma’s wishes will be fulfilled that he got a house and kind of made something of his life, start a family legacy. So in the meantime, he’s renting for me. I own it. And like I said, in the event he doesn’t come through, it becomes fully mine and I got a steal of a deal. But that’s kind of not the goal. If the longer he waits, obviously everything he pays in is essentially what’s going down on the principle.
So if I were to sell it today, I’ll make an okay profit, make it worth it, but just to see that need and then be like, okay, it’s going to get real creative. And then I had to find the people willing to do something that creative. Yeah, we closed that. So it’s one of my rentals. Like I said, I don’t make any money on it, but I also don’t mess with it. That was part of the agreement. I’m like, Hey, if you’re working to be a homeowner, it’s time to be a homeowner. So in our contract, it’s like, unless it’s something that I need to file on my insurance, you’re responsible for it.

Dave:
Wow. That’s one of the more creative kind of deals I’ve ever heard of. Have you done anything like that, Henry, or heard of anything like that?

Henry:
Heard of before? Yes. Have I done it? No, but knowing the lady who he bought this from and knowing John, I’m not surprised that this is how it worked out. She’s a sweet, sweet lady, and John’s a good person. So this is,

Jon:
She’s sharp as a tack

Henry:
Too. She don’t play. She don’t play.

Dave:
That’s awesome. Well, John, this has been fun. Before we get out of here, I want to ask you this approach that you’ve taken, which is you sort of slow rolled it for a little while and then just accelerated to a hundred all at once, you’re using off market strategies, you’re doing a little bit of everything. Do you think this is an approach that the average investor should take, or who else could try this, and what advice would you give to them?

Jon:
Yeah, I would definitely say that my approach is not a fit for everyone. Everyone’s on their own journey. Everyone has their own path. Take the steps in front of you. What I will say is if that real estate bug is there and you’re kind of wanting to go forward, what I will say is that path is seldom comfortable. But at the same time, I don’t think it’s wise to completely put yourself completely exposed to that risk. Like I said, because to be fair, when I quit my job, I had the duplex that was still making money. I had the house that I’d flipped and move into. And so I said, if everything goes absolutely pear shaped, I’ll sell the house. I move into, kick out one of my tenants and then live in that side. So it was like I had these sort of tiered methods to bolster it up.
And so I would say, you need to find where your comfort level is, and then just push it just a little bit past that. If you stay in your comfort level, you’re not going to do anything because don’t put your comfort level so far out there that you’re going to make dumb mistakes. And also, like I said, I have a wife, she’s great, she’s awesome, and she was sort of my barometer. And so I didn’t do anything without consulting her. And when I went to her the time to quit my job, she literally was like, well, I wouldn’t want to move back into the duplex even smaller than what we have now, but at the risk of you being able to chase your dream, I’m willing to do it. So I mean, I did still have some fail safes built in. So I would say, do find what’s comfortable and push just a little bit past that.

Dave:
I love that because a calculated risk, when we say go burn the boats, it sounds like you’re just lighting it all on fire and just running around. But you thought about it and you said, Hey, this is a risk. But I’ve thought about what I’ll do if something doesn’t go well. It sounds like the opportunity cost wasn’t that high, right? You said if you needed to just go find another job, it wasn’t going to be that difficult for you. And so you were able to pursue something, but sort of control the downside, which to me is the perfect scenario for an investor.

Jon:
And I will say it’s not without sacrifice. I don’t know of any investor who’s made it. And so before we even started, I mean obviously I was only living on 38, 40,000 a year. We’d already gotten our cost of living down pretty far with four kids. We had it down to an art. We weren’t quite couponing yet, but we were almost there. And so there was sacrifice already in place. And that’s another thing I would tell new investors is that it doesn’t, it’s very few people have a silver spoon, and so you have to work and you got to make some sacrifices.

Dave:
Awesome, man. Well, a really cool story. Jonathan, thank you so much for joining us and sharing it today.

Henry:
Yeah, no problem. Thanks, John. Super proud of you, man. Thanks

Jon:
Guys.

Dave:
Thank you all so much for listening to this episode of the BiggerPockets podcast. Hopefully you enjoyed Jonathan’s story as much as I did. If you did, please share this episode with someone and don’t forget to give us a positive review on either Apple or Spotify. And we’ll see you soon for another episode of the podcast in just a couple of days.