[In my Investor Profile Series, I use a question & answer format to share the stories of actual real estate investors at different stages of their investing careers. Be sure to comment below if you enjoyed it or if you have questions for the investor.]
Today’s investor profile is from a fellow blogger named Gwen from fierymillennials.com. At 26 years-old, she’s right in the middle of the millennial generation, and she’s relatively new to real estate investing. So, for millennials or others just getting started with investing, I think you’ll relate to her story (and enjoy her blog).
Gwen recently purchased her first real estate investment – a triplex house hack where she lives in one unit and rents out the others. She’ll share details of the deal in the interview below. Gwen is also just a fun, energetic, and sincere person (the kind I hope my daughters will grow up to be someday!) who I think you’ll enjoy getting to know.
Now let me turn it over to Gwen!
Your home location: Midwest
Career/Source of regular income: IT
What hobbies do you enjoy? What do you do for fun?
Tons of hobbies! I love to play various sports and yard games (softball, soccer, disc golf, bags, bocce ball, croquet) and have a lot of hobbies as well. I create stained glass pieces, quilts, knitted items like scarves and hats, and fun counted cross stitch items. I’m currently working on a home sweet home piece that’s based off Pallet Town from Pokemon Red/Blue/Yellow…. Because I also like to play video games on all platforms.
A fun/interesting/little-known fact about you?
I was a Girl Scout from 2nd grade to my senior year of high school and got my Gold Award (the equivalent of the Boy Scout Eagle Award).
Financial Independence/Retirement Plans
What does financial independence mean to you?
To me, financial independence is freedom. I want the freedom to pick whatever job I want, independent of location, benefits offered or pay.
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Do you have plans for financial independence (FI) or retirement? Or have you already reached financial independence?
I do have plans for FI. I plan on being FI by 35 at the very latest. My goal is to amass just over $500k. I’m a quarter of the way there after just 3 years of saving!
Why do you want to achieve retirement/financial independence? What kind of activities and projects will you spend more time on? What projects, causes, hobbies, or other activities mean the most to you?
Since I was so heavily involved in Girl Scouts growing up, I would like the opportunity to pay that forward and mentor the next generation of girls. Without that organization, I would be a completely different person (and not for the better). Most of that impact came from summer camp, so I would love to be a counselor or lifeguard at a camp. However, the pay is truly terrible. We’re talking $1400-$2000 for an entire summer’s worth of work. That’s unsustainable if you’re not already financially independent.
I also love to ski and think getting paid to ski by working for a resort for a few winters sounds like a fun time!
And then of course, I would also like to do some longer term slow travel to various parts of the world. Right now I’m limited to 13 days of vacation which is NOT enough time to see everything I want.
Lastly, I have a ridiculously adorable niece and nephew who love getting to spend some time with “Auntie Wen”. I would absolutely love getting to hang out with them more! The odd weekend here or there just isn’t enough. I miss out on a lot of milestones and birthdays right now. Eventually, this aspect of FI could evolve into spending more time with a family of my own, but since I am single this gets relegated to the hazy “someday” of the future.
If you had to start over and wanted to become financially independent, what’s the most important thing you would focus on?
Avoiding debt. I graduated from college debt-free and that has given me a HUGE leg up over my peers. Everything I earn goes straight to the bank of me instead of being given to Fannie Mae or Navient. I would also look into different paths of life. Everyone around me insisted college was THE BEST ROUTE and I believed it….. Where now I’m more open-minded and think there are alternative paths that work just as well.
Do you invest in real estate? If so, why do you like it?
I just bought my first property a month ago. I like it because it gives me an alternative income stream that isn’t tied to my primary career or the whims of the stock market (although it is impacted by a variety of other factors).
Can you describe your niche(s) and approach to real estate investing? How has that changed over the years?
When I was younger, I wanted to own a 5,000 sq ft mansion on a golf course. Thankfully I’ve since outgrown that plan! Now I would like to own 4 or 5 multifamily rental properties. I don’t think I need a huge rental empire! One is already a lot of work!
What % of your net worth (roughly) is in real estate?
Roughly speaking, about 5%. It’s not much, but again, I’m just starting out.
What other types of assets do you invest in? Why? How do they fit with/complement real estate investments?
I subscribe to the JL Collins’ method of investing: total stock market index funds. I have a variety of pre and post tax accounts that I invest in. I’m young, so I’ve got a lot of risk tolerance which is why my allocation is set so aggressively.
[Chad: I am also a fan of JL Collins’ style of simple, passive, index-fund investing. To learn more, you can read his excellent stock series or his equally excellent book The Simple Path to Wealth.]
Real Estate Deal
What’s your best or most memorable real estate deal? Why?
Since I’ve only done the one deal so far, I’ll talk about that! I bought a 1910 Neo-Georgian Revival style house that had been converted into a triplex. I consider this the best deal I’ve made because, well…. It’s the only one I’ve done!
How did you find the deal? Why did the owner sell?
I found the deal through the alert system my realtor set up. It was the second house we looked at and the competition was fierce. I put in my bid 4 hours later as did 2 other people. My offer was accepted as the previous owner liked that I was a young woman getting into real estate on my own. She sold the property because she’d eeked out every bit of profit she could from it before she had to start putting in some serious money. Might seem like a bit of a cynical point of view, but the repair estimates I’m getting for some of the work are worse than they should be because of her neglect.
What were the basic numbers like purchase price, remodel costs, rent, resale price (if applicable)
I bought the property for $85,000 – minus a credit for $2500 towards new gutters – and put down 10%. I’ll probably end up putting roughly $20k into the property all told. That includes work on the exterior, HVAC, bathroom renovation, and some general repairs inside.
I get $1100 in rent a month right now while also living there for free. When I move out and make everything look awesome, I anticipate I’ll be able to get $1500 a month in rent.
How did you finance the deal?
I used a VA loan from Chase for financing. Using a VA loan required a bit more paperwork but it was worth it to avoid PMI.
What has been the overall effect of this deal on your life? Lessons learned?
So far I’m learning a lot about myself, other people, how houses really work, how to deal with contractors and more! I’d say the biggest lesson learned so far is always get more than one quote. The first contractor wanted to charge me $17k when others submitted bids for $6k! Also, have way more cash on hand than you think you’ll need. Better to have too much than too little.
Do you have any tools that help you manage your life, like a physical planner or digital software?
I use Mint, my Google Spreadsheet, OnTrajectory, and an old fashioned paper calendar to keep my life in order.
What does a typical morning routine look like for you?
Wake up, hit snooze 4 times, check through notifications that came in overnight, pet the cat, use the restroom while petting the cat, get dressed, feed the cat, make myself lunch, pet the cat goodbye and then drive to work.
What’s your #1 habit to stay personally productive and fully engaged in life?
Do it now. Don’t procrastinate. Very rarely does anything good come from putting things off.
Who have been your most important heroes, mentors, and/or teachers?
As previously mentioned, I had a lot of strong female mentors through Girl Scouts. I also had some amazing teachers, managers, and youth group leaders who helped shape who I am today.
What are your favorite books or authors? Can be categories in business, investing, or life/philosophy (other than a sacred book)?
Anything by Tamora Pierce or JK Rowling! I’m big into fiction (although of course, I read personal finance books too!).
What advice do you have for a young person just considering their future career and life as an adult?
Don’t do what you love. Get a job that pays well, and do what you love on the side. If you do what you love, you’ll grow to hate it. Also, try to avoid debt as much as possible.
What legacy do you want to leave personally and in your career?
I want to know I made a difference in someone’s life. I want to help people live better, happier, more fulfilled lives. It would be fantastic if that were through the blog but there are other ways to make a difference as well.
Any tips for others looking to invest in real estate and achieve financial independence?
Do not discount the 1% rule. You’ll need every bit of cushion possible. Wait for the best possible deal – don’t just take the first one that pops up.
Any big mistakes you’ve made that others should avoid?
KNOW THE NEIGHBORHOOD. This first property I bought is in a….. Rougher neighborhood. It’s not bad, but it definitely isn’t great either. Go to the property at all hours of the day, and if you can manage it, swing through a potential neighborhood in different seasons before you buy. Winter behavior is far different from summer behavior.
[Chad – Thank you, Gwen, for letting me interview you and pick your brain! If you want to learn more about Gwen or follow her on the web, her blog is at fierymillennials.com.]
Please leave your questions or comments below. We’d both love to hear from you.
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Woot! Go Gwen! Didn’t know you were so into Pokemon should talk about that at the next meetup!
I just beat Pokemon Sun a few weeks ago. I’ve been playing it since the beginning, almost, and I love the series so much!
Chad Carson says
I’m slow to the Pokemon party. But my daughters are pulling me in:) Seems like fun.
Dave Ravnikar says
That is awesome! Its great to see a young single female take a stab at RE! I agree with Chad, you certainly sound like the type of woman I want my daughter to aspire to be. Regarding real estate, it sounds like your first deal will be profitable. This is likely due to you doing your diligence, and taking the time to learn about the processes involved with owning rental real estate.
Chad, thanks for highlighting Gwen’s case study! Good stuff
Natasha Keck says
I’m impressed with your #1 habit (do it now) since a cat’s motto would be: do it later, or never. Thanks for sharing your story, and for being a strong female role model!
Gwen @ Fiery Millennials says
My cat’s motto seems to be: Do it at the time to cause Mama the most angst. ie wanting pets and snuggles right before I leave the house and am wearing nice clothes. Thank you for the kind words Natasha!
Mrs. Adventure Rich says
What an awesome story, Gwen! Looks like you are on an awesome track! Mr. Adventure Rich and I are similarly subscribed to JL Collins’ investing strategy and have toyed with the idea of real estate investing. This definitely gives us more confidence to take the plunge if we find the right property.
And on the ski bum note, I love it! My dad ski bummed in Colorado when he was younger and I recently had a cousin do the same thing. They all have rave reviews about the mountain town lifestyle and community. Mr. AR actually works at a ski resort back here in northern Michigan, so we have a semi-bum lifestyle in the winter (we love hanging out on the slopes and are teaching our son to ski!).
Gwen @ Fiery Millennials says
Sounds amazing! Coming from the flat lands of the Midwest like I do, there’s a lot more improvement to be made to my skills before I’m satisfied. With limited vacation time, it’s tough to make it out to any place with decent slopes! (Wisconsin barely counts haha). Thanks for commenting!
Gwen and Chad, thanks for the story and experience. I’m currently deployed but began looking at a VA home loan multi-family purchase to house hack. How strict is the VA loan banks with buying a property that needs minor work?
Also, when I make that purchase will it affect a pure investment purchase about a month later?
Thanks again for the post.
Chad Carson says
Hey Erik, Gwen may be able to answer better for the strictness of VA loans for property condition. I am not as familiar.
I do know VA is an owner occupant loan, so you wouldn’t be able to use it for a purchase of a pure investment property. You can move out later on after living there.
But qualifying for a new investment loan will depend upon your income to debt ratio. If you still have a lot of cushion, you may be fine. A good mortgage broker who does investment loans would be the one to ask and get an exact answer.
Hi Erik! I think the “word on the street” about stricter standards are just that – rumors. I had to fix some minor things with plumbing and electrical, but they overlooked some things I thought were going to be issues. As long as you don’t buy a dump or a foreclosure property that’s been empty for a few years, you’ll be fine. Good luck!