Rapid Real Estate Expansion

real estate februari

Although we sometimes find new ways to save some money, like canceling our television subscription, or renegotiating our life insurance, they become rare. We can only save so much. With the creation of additional cash flow, growing your wealth can be accelerated. Which is why, in our quest for financial freedom, we focus on real estate to make things work. Okay that, and because we like the business. It’s our little project which helps us get to where we want, and where we first realized how it feels to be fully in control of your own path, and have total freedom in how you work.

It’s one way of many, and it works for us. We notice that a lot of people we talk to are interested in how we manage things, and not necessarily in how much we get out of it. Which is a good thing though. Although we aim to get rich in real estate, it isn’t our end goal. But rather a means to an end. If you want to grow, explore and get the most out of life, it will cost you money. Financial independence will let us receive more money and more importantly, more time as well. 

Every month we give an update on our progress. We let you know what we are working on, sharing milestones or give insights into the not so positive moments.

And today is the day of sharing milestones!

After the struggle we had with property #2 last month. Think of unexpected maintenance, higher costs and too much time spend, there is light to be seen at the end of the tunnel. When all was fixed, we had to focus our energy on the next project waiting in line: property #3.

Last Friday was the big day. We signed some paperwork, made routine checks, shook hands on it and received ownership of a new rental property. It almost starts to feel normal…
 celebrate.png                                         

Last month we dedicated most of our time in preparing for this moment. We still had to finalize on the mortgage, which came through about 2 weeks before the due date. It caused a bit of stress, as I normally like to have something like that being dealt with a lot sooner. It’s always a bit exciting when you talk about such numbers and you’re not entirely sure it will work until it’s all been approved.

A big part of the property is being financed with a mortgage and additionally, we made use of a private loan from a fellow investor. As the property is already being rented out, we have a fairly strong positive cash flow position from the start. In short, we expect a return (unleveraged) of 9% for a full year.

There are some things in the building that needs renovation, but nothing that can’t wait. So, in the coming weeks/months, we’re going to draft a multi-year maintenance plan. By doing this we decide on what kind maintenance should be done in the coming 5 years and then save up some money for it to prevent having to pay it all at once in due time.

February was also the first month we received full rents for both rental property #1 and #2.

realestate-februari

Our total net rental income comes down to 799.98 euro for the month February. It’s a bit lower than we anticipated. Mostly due to some stalling costs from the maintenance we had in January. We still had one invoice to be paid regarding our gas leak. Although I’m glad we found it – and fixed it! – the aftermath is just plain ugly. Several components had to be replaced, and it took 3 visits before everything was up and running again. For all of this, we had to pay 544 euro. Still,  it’s far better than replacing to the whole boiler. It will be interesting to see how this translates to our Cash Flow Index.

In the coming month, we’ll continue to expand our network. We are going to meet with a couple interested in real estate whom we met on the FIRE NL/BE meet-up last weekend. I’ve missed out on a big real estate event this past month, but I already found another local event planned for the end of this month which I want to check out. 

On a side note, we took a nephew of ours with us to a meet-up the other day. Not that he is investing already, hell he even just started at the university, but when you’re interested at such a young age… It’s a waste not to let him in on all the possibilities money (or financial independence) can offer.

If everything plays out right, we won’t have to worry too much about the properties we already own, and instead, we can focus on finding some new ones to add to the portfolio. We are quite ambitious and aim to buy several more properties this year. You have to set the bar high, right? Even though it’s a hot housing market, there are still plenty of opportunities to be found. The real question here is: is it worth it to buy? 

17 thoughts on “Rapid Real Estate Expansion

  1. Great blog and Posts. Doing the same thing for the last two years I was wondering If you can tell something about how you find properties, what kind of properties and tenants you will get, how you finance them (detailed) and If you work with a housing agency for example. Not to reveal all of your ‘tricks’ or advantages so to say but more to learn from eachother. Myself I have two appartements and now looking for a new property with maybe studio’s in it to be financed by using heloc. Finding the right properties remains a challenge. Either way keep up the good work, it is Inspiring. Best MJ

    Liked by 1 person

    • Thanks MJ, those are some questions 😉 I have written about this in several posts, but won’t get too detailed (see also my answer on Roadrunner).

      Every deal is different, and so far we have been using HELOC, mortgages and private money lenders. Crowdfunding is an interesting option, but have not used it.

      Tenants are a mix as well (students/couples/singles). And we operate without a housing agency.

      There are many ways to invest in real estate, and depending on risk appetite and goals, you have to adjust your strategy accordingly.

      As for finding properties, THE best way to find deals is to stop searching for them. Instead, talk to people (a lot) and grow a network. Then, deals will come to you.

      Like

  2. Congrats on property no. 3! It’s nice to see that the money is flowing in. And you’re saying that there are several more to come this year? That’s impressive!
    Are the conditions of the financing public? Like how much percent was your down payment and what are the term and rate of the financing?

    Like

    • Thanks! We hope to get more, yes. The financing is different per property and often times a mix of things. For this one, we used a mortgage (3.4%), a private loan (6%) and some of our own. Terms differ, and won’t be shared in public for several reasons though (for one is privacy reasons of others).

      Like

  3. Congratulations on your new property! Must be an amazing feeling! I can’t speak for others, but I would be very interested in learning more about these investments. If you’d ever decide to make such a post, count me in as a extensive reader. Good luck and be sure to stop and celebrate sometime!

    DI

    Like

  4. And Team Divnomics is off to a great start after an initial hiccup! Very much looking forward to seeing how the binge buying is going to continue (and cash-flow is hopefully skyrocketing too).

    Liked by 1 person

  5. Impressive growth trajectory! How easy is it to find tenants?
    I’m currently fixing up a commercial property and just had my first viewing, which did not go too well. Have another potential tenant coming next Tuesday. Fingers crossed!

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s