How a teacher acquired 30 rentals starting at just $ 4,000
- Quentin D’Souza had a modest salary as a teacher.
- But that didn’t stop him from building a real estate portfolio with just $ 5,000.
- He explained how he acquired 400 units and achieved financial independence.
Quentin D’Souza wanted three things that being a school teacher couldn’t give him: financial freedom, more free time and more freedom of thought.
Thus, at the end of the 2000s, when he was in the process of becoming an administrator, he decided to embark on real estate investment.
But with two children and a modest salary, he needed a way to start without a lot of money.
So he and his wife Laura took out a secured line of credit on the equity they had built up in their own home in the Greater Toronto Area. A secured line of credit borrows money against an asset – if the debt is not repaid, the lender keeps the given amount of equity in the asset. On the other hand, if the debt is repaid, the lender can continue to borrow from it.
Using that money – they had access to 100,000 CAD, which currently equates to around $ 80,000 – D’Souza then bought a property, repaired it, and sold it for a higher price, making a profit and paying off his debt. They only contributed $ 5,000 in cash to the property, or about $ 4,000, he said in a recent episode the rental income podcast.
Seeing the money they had earned, Laura encouraged him to continue. He therefore continued to build his portfolio using what is now called the BRRRR method: Buy, Rehabilitate, Rent, Refinance, Repeat.
In this strategy, investors buy a property, fix it, find a tenant for it, take out a line of credit that is paid off by tenants over time (rebuilding the owner’s equity), and then use that money. to buy another house and repeat the process. In D’Souza’s particular case, he refinanced the properties, used that money to pay off his secured line of credit, and then used the line of credit again to buy another home.
D’Souza says he used this strategy to buy his first six properties. He then teamed up with friends and family, who put their money into transactions in exchange for a share of the equity in the property, or simply in exchange for interest on their capital.
Once he reached a portfolio of 30 units, he said he achieved a cash flow of $ 5,000 per month, enough to live on and quit his job. But he continued to work for about a year as a precaution because he had young children. He then quit his job in 2014 at the age of 40.
D’Souza now has a portfolio of 371 units in 41 buildings across the United States and Canada, according to real estate records viewed by Insider, and operates a real estate business that purchases apartment complexes. His company works only with accredited investors.
D’Souza’s advice for new investors in today’s market
Home prices are significantly higher today than they were when D’Souza started, making it more difficult to enter real estate investing, he said.
But he gave two tips for those looking to buy their first rental property.
First of all, find a good network of investors, he said. This will let you know which properties work with the BRRRR strategy in a given area. He said that in the Toronto area today, for example, people using the BRRRR strategy are buying single-family homes in poor condition and adding other units to them, which was not necessarily the case when he did. begin.
He said find someone in your area who has successfully executed the strategy and try to go their way.
“Maybe it’s townhouses, maybe it’s duplex conversions, maybe it’s small apartment buildings,” he told Insider in a statement. phone interview. “Whatever it is, find out from people who are truly successful … then follow the path already laid out for you instead of trying to create your own. It’s a lot easier to follow someone else’s path that is successful than it is to try to do something totally different. “
Second, he said to start instead of being paralyzed with fear or apprehension.
“You can only read books and watch videos for that long. You have to go out and you have to do it,” he said. “If you’re stuck and want to learn how to do it, find someone who’s doing it right now and ask them: how can I work with you?