Interview 3: Financial Freedom with a Buy n’ Hold Portfolio of 24 Homes

Out of State Investor Interviews

I’m so excited to bring you Interview #3 of our investor series. These interviews showcase actual real estate investors who are investing from a distance. They’ll share how they got started, what their current strategy is, and advice for anyone looking to get started too. 

Today I have Dustin Heiner, a real estate investor and blogger from California. Dustin is a great example of an investor who has put in consistent action and hard work to build his portfolio to where he no longer needs his job. Dustin also writes about real estate on his blog over at Master Passive Income. Truth be told, Dustin’s the first blogger I networked with and the reason I chose not to be anonymous when blogging. Be sure to check out his blog and learn more about him.

So without further adieu, let’s get on with the interview!


Background

Where do you live?

Fresno, CA

Where do you invest?

Currently Ohio and Texas

If real estate investing is not your full-time gig, then what do you do for a living?

I work for a county government agency where I will quit in the next few months. My rental properties and passive income business is bringing in enough money for my family and I to live on so I never have to work for someone else again.

How did you get started in real estate? 

I grew up framing houses with my father who was a contractor. This experience helped me to appreciate how real estate is how the rich make and keep their money. From there, I read Rich Dad, Poor Dad and learned how amazing passive income is. Because I love real estate and passive income, rentals were the perfect fit for me.

Since I live in CA. I don’t invest where I live because the profitable rentals are hard to find. My first rental property I purchased was for $17,000 cash 9 years ago in Ohio and rents for $525 a month. I still own it and I have made my money back many times over.

What is your real estate investing strategy?

I am a buy and hold investor. The properties can be in any condition but the property needs to be able to cash flow well once it is rehabbed.

I personally don’t like flipping properties because once I sell, I stop owning the property. I prefer to purchase the property in cash, rehab it, rent it out, and then refinance the property in order to take out all my money invested AND cash out of the equity.

In flipping, the goal is to make money on the sale. It could be anywhere from $20,000 on up. The problem is that you don’t own the house anymore. I would rather refinance and pull out the $20,000 and still own the house.

Investing Out of State

Why did you make the jump to invest outside of your local market? Why not invest locally where you live?

The prices in CA are ridiculous. In my area a $200,000 home can only rent for about $1200-$1300. There is no money to be made there. I like to find great areas for rentals, find great property managers, and have them manage my properties. It is almost as passive as you can get.

What steps did you take to learn your market?

For me, Zillow is one of the best tools to find a new area. It gives you their estimate of the value and the rent. This is not 100% accurate so this is just the starting point.

From there, I find realtors, wholesalers, property managers, contractors, inspectors, etc. I rely on the people on the ground in those areas to help me to understand if a market is good to invest in or not.

How do you invest out of state? 

Out of all my properties, I have only personally seen one of them. It was my first property I ever bought. I rely on the people in my business that I pay well to give me accurate information and help me run my business. Usually I like to fly out to a new area to invest but not always. I have never been to Houston but still invest there.

What are the biggest challenges you’ve experienced investing out of state?

Finding good people to run your business. If you don’t have a great property manager, your business will suffer.

My first property manager was stealing from me month after month. Receipts and statements were not adding up, expenses without receipts, bounced rent checks, etc.

My rule of thumb now is “Hire slow, fire fast”.

Today and Beyond

What does your real estate portfolio consist of today?

Right now I have 24 single family properties. I have owned duplex’s in the past but have sold them. I intend to start investing in apartment complexes as soon as I quit my job since I will have more time to devote to a new business model (multifamily).

How much time do you spend on your real estate business?

About 1-2 hours a month when I am not buying a property. This is basically looking over statements and making sure the manager is following my business processes I have lined out. When I am buying a property, it takes me about 2-3 hours to purchase a new one.

Obviously, I spend little to no time at all on my properties. That is why I have great property mangers and pay them well so I don’t have to do any work.

What’s the end goal? What are you trying to achieve with your real estate investments?

My main goal is to be completely independent and never have to work for someone again. I love to work and am built for working but I hate working for someone else. Being dependent on someone for income puts you at the end of a gun. If they want to fire you, you no longer have income to provide for your family.

What advice would you give to someone looking to get started in real estate? 

Learn as much as you can before you jump in. It is easy to make money in rentals but it is also easy to lose money. If you invest/buy right, you will make money every time.

Something About You

What’s the best thing you’ve read lately?

I read the bible every day. That would have to be the best thing. Along real estate and passive income, I would say the “Richest Man in Babylon” is up there as a great book to understand the power of passive income.

Where can people go to connect with you?

You can find me on my blog at Master Passive Income


Thanks for stopping by Dustin!  If you want to learn more about Dustin, reach out to him on his website. 

2 thoughts on “Interview 3: Financial Freedom with a Buy n’ Hold Portfolio of 24 Homes

Leave a Reply