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Real Estate Investor Who Built Portfolio on Small Salary Retired Early – Business Insider

  • A former cop who never earned more than $52,000 built a 25-unit real estate portfolio. 
  • He afforded his first rental property, which he bought in Virginia, by taking out a $30,000 HELOC.
  • He scaled up by finding creative ways to come up with cash, including using a self-directed IRA.

There was a point in time when real estate investor Mark, who prefers not to share his last name for privacy reasons, couldn’t afford to heat his own home.

In 1998, after a 10-year career in the Navy, he started a job as a police officer in Virginia. He and his wife bought a single-family home in the area and moved in with their two kids.

“I had a furnace to heat the place and I used natural gas,” Mark told Insider. “That first winter, I got a bill for $400 and I couldn’t afford it.” He researched alternative ways to heat a home and ended up buying an oil-filled radiator at Walmart: “They look like an old metal grate and you plug them into the wall. For 10 years, we would heat our house with these electric heaters. We didn’t use the furnace at all.”

His starting salary as a police officer was $23,000, he said: “And when I retired in 2018, my annual income was $52,000 a year. I never made a lot of money.” 

Still, thanks to real estate investing, he managed to retire early. He left his law enforcement job in 2018 at age 51. Today, the 55-year-old investor considers himself “lean financially independent,” he said. Meaning, “we’re living off our investments but I’m not filthy rich where I’m driving a Lamborghini. At the same time, I’m living better than I did when I was working full-time and living in Virginia as a police officer.”

Mark and his wife currently reside in Florida. He spends time managing his investments, including a 25-unit real estate portfolio, which Insider verified. 

Besides that, he doesn’t work. He never sets an alarm clock, though he still wakes up around 7:00 a.m., he said. He reads the newspaper and checks his email in the morning, goes swimming with his wife each afternoon, and finishes the day with an evening walk. He also works on his YouTube channel, Mazske Finance, and makes about one video a day. 

His day-to-day life is surreal, he shared.

“My wife and I will be sitting outside by our pool and we’ll just say to ourselves, ‘What a life.’ We remember where we came from and how tight money was when our boys were little,” Mark said. “We never dreamed that we would own a swimming pool one day or have a nice home or have a dock and a tiki hut. Yet, through investing, I was able to create this life for myself that is better than my wildest dream when I was younger.”

Here’s how Mark built a 25-unit real estate portfolio in just five years on a salary that never exceeded $52,000 a year.

Buying his first investment property in 2017 with a HELOC

A 2016 family vacation to Savannah, Georgia prompted Mark to look into real estate investing. 

“We stayed in an Airbnb and I really liked the layout of the house,” he said. “I met the owner and told her I’d love to own an Airbnb like this myself. She asked if I wanted to buy it. She gave me a breakdown of what she was selling it for and told me what her rental income was.” 

Knowing very little about real estate investing at that point, Mark told her he’d think about it. When he got home, he posted in a real estate forum on The Motley Fool website, explaining that he was considering investing in his first property out-of-state, 800 miles away. The general consensus was that he should buy closer to home. He agreed, called up a real estate agent he knew in the area, and told her he wanted to invest in real estate.

They started looking at properties in Virginia in late 2016. 

“At that time, I had not read any real estate books, I had not watched any YouTube videos, and I really didn’t know anything about buying real estate,” said Mark. 

He leaned on his realtor, who was an experienced investor with about 80 rental units herself, he said. After looking at a dozen properties, he put an offer on his favorite one: a $100,000 single-family home in in Shenandoah Valley, Virginia.

“It was about 20 years old, had vinyl siding, and needed a little bit of painting but it was basically in good shape,” he said. “It was empty, and my realtor told me I could rent it for between $800 and $900.

“Knowing what I know now, I would have wanted a better deal than that — I would’ve wanted to buy it cheaper or get more rent — but at the time, I thought, ‘Wow, that’s pretty good when my mortgage is only going to be $500.'”

mark investor virginia

Mark stopped working in 2021 and moved to Florida with his wife.
Courtesy of Mazske Finance

He closed on the property in January, 2017. He didn’t necessarily have a huge cash nest egg at the time: about $25,000, he estimated. He built up most of that after he paid off his primary residence in 2015. Both of his sons had left home for college at that point, too, which brought his food bill and miscellaneous spending down. They both attended the U.S. Coast Guard Academy, where there is no cost for tuition, room, or board.

Instead of using up all of his cash to cover a 20% down payment and closing costs, he got a home equity line of credit (HELOC), which lets you borrow against your home’s most current appraised value to access cash. Most lenders will let you borrow up to 85% of your home’s value, but Mark wanted a small HELOC. He borrowed $30,000 from the bank and used about $17,000 of it towards his down payment. He covered the rest of his upfront costs with savings he already had.

He spent a month doing some minor repairs to the property and filled it with a tenant in February. That was his first major real estate mistake, he said: “The tenant I ended up accepting looked good. I thought she had money coming in but I didn’t run a background or credit check. She paid me cash for the first month, which, looking back, was a red flag. I ended up only getting rent from her for two months.”

Ultimately, Mark had to evict the tenant. This can be an expensive process, especially if you hire an eviction attorney. For Mark, the cost “wasn’t too bad,” he said. “I didn’t use a lawyer. I just did it all myself. I had to pay court fees, which were between $50 and $75.” 

The major cost for him became the mortgage on the property, which he had to pay out-of-pocket until he either sold the property or found a new tenant.

“I was so tempted to give up on real estate and sell the house at that point because it was stressful,” he said. “I’d been investing in stocks all these years and that was so easy: You get on the computer and click to buy and click to sell. There’s no stress. There are no human beings involved. With real estate, tenants might stop paying or damage the house.”

Instead of selling, however, he decided to find another tenant and try again. After paying the mortgage himself for three months, he rented it out again to a family that he carefully screened. He runs background and credit checks on all prospective tenants now and hasn’t had an issue since the eviction.

Growing his portfolio to 25 units in 5 years

Once Mark started collecting rent from his new tenants consistently for a few months, he was profiting about $220 a month, he said. He put some of that money in savings and used some of it to pay his HELOC back. 

He felt ready to buy a second investment property, so he called up his realtor and started looking at properties in Shenandoah Valley again in late 2017. Prices had gone up a bit and there weren’t too many properties available in his price range, he said, but he ended up getting a good deal on a home that the owner wanted to get out of quickly. 

“She was asking less than market value and I made an offer less than that,” recalled Mark, who bought the single-family home for $97,000 in December 2017. “Within five minutes, she accepted it.”

He put 20% down, or about $20,000. He used about $6,000 of his HELOC money — the rest of the down payment came from his savings, which were “building up fast” at that time, he said. “My wife and I were still working full-time, the kids were out of the house, and we had no personal mortgage.”

The property did require “a lot of elbow grease,” he said. “It was a mess. She left a lot of stuff there.” But it had good bones: “The house was renovated three years before we bought it. It was really dirty but, besides three doors that needed repairs, it wasn’t damaged.

He hired people to carry the furniture out that had been left behind, and he and his wife cleaned up the yard and updated the paint. It was rental ready in about three weeks. In early 2018, tenants moved in and started paying rent. After expenses, Mark took about $250 a month from this property, he said. 

His next investment was a $199,500 triplex in Virginia, which his same realtor helped him find. To finance this one, he used the money he’d been saving in his 457 plan the past 20 years while working as a police officer. This is a tax-advantaged retirement plan similar to a 401(k) but with one main difference: When you quit or retire, you can access your money without owing a fee (with a 401(k), if you withdraw your money before age 59 ½, you’ll be assessed a penalty fee).

Mark retired on April 1, 2018, meaning he had access to the $65,000 he’d saved in his 457 plan. After taxes were withheld, his balance was around $45,000, he noted. That’s nearly exactly what he needed to cover the 20% down payment and closing costs on the Virginia triplex.

He closed on May 31, 2022. On June 1, “I got three rent checks because there were three tenants already living there,” he said. It became his best cash-flowing property at the time.

Mark acquired one more property in 2018 — a single-family home in Birmingham, Alabama — and closed the year with six rental units: three single-family homes and a triplex. 

In 2019, he bought six more properties — all out-of-state — and sold one (the second rental property that he bought in 2017), bringing his total rental units to 11 by the end of the year. He acquired another single-family home in Birmingham, a single-family home in Gary, Indiana, and four turnkey properties in Gary. Turnkey properties are places that are fully functioning and ready to rent out immediately. 

Mark was drawn to both Birmingham and Gary because they were more affordable than his market in Virginia. In Birmingham, properties were “a little less than half the price,” he explained. And the turnkey properties in Gary were “in the price range of $50,000 to $70,000.” It allowed him to scale up with less cash, since his down payments were essentially cut in half.

In 2020, he scaled up even more: He bought 14 properties, nine of which were purchased with seller financing from a real estate investor in Indiana.

While he was continuing to build his savings quickly, thanks to a low cost of living and growing rental income (plus, he worked part time at the post office after retiring in 2018), he didn’t have unlimited cash to work with. 

He used a couple of different strategies to get upfront cash to scale up so quickly. He transferred money in his Roth IRA to a self-directed IRA, which you can use to purchase real estate; he and his wife took out a loan on her 401(k) plan; he did a cashback mortgage refinance on his triplex and his very first rental property, which he said got him $65,000 back; and he sold the second investment property he bought back in 2017 and profited about $60,000, he said.

Achieving financial independence in 2021 and moving to Florida

Mark and his wife had been thinking about moving to Florida since 2019. By 2021, they were in a position financially where they could do it. They bought a home in southwest Florida in March and Mark moved down immediately. His wife stayed in Virginia until their home they’d been living in since 1998 sold in September 2021. 

Neither of them have been working since. They live off of their rental income, plus two other alternative investments Mark has invested in: an oil drilling company and mineral rights. Plus, he has a pension from the police department.

mark investor

Mark says he never dreamed he could live in a nice house. Today, he owns a home with a swimming pool and tiki hut.
Courtesy of Mazske Finance

His goal is to profit $25,000 each month from those four revenue streams, he explained. 

“I’m not there yet but I’m progressing towards it,” he said, adding that he plans to buy more rental property and mineral rights. “If I can get up to 30 to 35 rental units and add to my mineral rights investment, and as the oil investment also is growing, hopefully I’ll get to my financial goal of $25,000 in the next one to two years.” 

When he hits that number, he’ll achieve “fat financial independence,” he said, “because that’ll be a lot more money than I’ve ever had before.”

Mark believes that anyone can achieve a similar lifestyle through smart real estate investing.

“If I can do it as a basic blue-collar worker raising a family, anyone can,” he said, also expressing that he wants people in a later career stage to know that it’s never too late to start investing. “I was 49 when I bought my first rental. I’ve heard people say, ‘I’m too old to invest.’ You’re not.”

To be a successful real estate investor, though, you need “persistence and determination,” he added. “This isn’t a quick rich scheme. It’s a journey and a process.”

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