The Late Starter’s Guide to Retirement with Real Estate (40s, 50s, or 60s!)

Kyle:
I think I would encourage people to ask themselves if they’re a “late starter,” why are you transitioning to real estate? If you’re someone who is like a go-getter, go for it. And especially if you have kids watching you do this awesome transition into something new and exciting when you’re 50 or 55, what a great example to show them of how you can make a transition and learn a new skill.

Kim:
It’s never too late. It really isn’t. I mean, there’s expiration on a milk carton, right? But that’s not us. I think we get better, we get wiser, we have more fun in life. We enjoy things more because we’re not so uptight. I like this stage in life. I really enjoy that I started later.

David:
What’s going on everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast here today with Henry Washington co-hosting the show with me. There are many people out there that think that they are too old or it’s too late to start investing in real estate. Well, today, Henry and I are going to do our best to debunk that myth. Today’s show is going to be a late starter’s guide to real estate investing. It’s all about the belief that it’s never too late, whether in your forties or your sixties.
There may be some mental hurdles you have. And this conversation should hopefully help you clear some of those blocks and start taking the action that you need to start building wealth to prepare yourself for retirement now, rather than waiting even longer. And today’s episode is going to be a little different because we have not only one, but two interviews with different guests. The first part of the show, we’re going to speak with Kyle Mast. He’s a certified financial planner and a regular contributor to BiggerPockets money. Kyle is going to fill us in on how people that are starting late may have some advantages when it comes to investing in real estate.

Henry:
And in the second half of the show, we interview Kim Bosler, who started investing at 56. She’ll tell us how she was able to build such a strong portfolio that set her and her husband up for retirement and allowed her to purchase her dream home in Utah. And before we get into the show, we want to add a caveat. In this episode, we’re going to make some assumptions. We’re going to assume that you’re already ready to start investing, which means that you’ve got somewhat of a financial basis. So we’re going to assume that you don’t have any crazy amounts of debt, heavy credit card debt. We’re also going to assume that you have your finances under control and you have a budget. We will also assume that you have some savings and an emergency fund and that you may already have some investments outside of real estate.

David:
And lastly, that you have a cash position, which means you have assets in the bank in a 401(k) or even equity in your primary residence, anything that will help you start investing today.

Henry:
And for those of you who may not be in this financial place just yet, we recommend that you listen to our sister podcast, the BiggerPockets Money show, because Scott and Mindy on that show will guide you through that journey. They will help you get your financial books in order. And once you’re there, you can come back, listen to this episode and get started in real estate. So grab your pens and paper, take some notes. This is going to be a good one.

David:
Kyle Mast, welcome to the BiggerPockets Podcast. Happy to have you on today.

Kyle:
Thanks, David. It’s really good to be here. I appreciate it.

David:
For those who haven’t heard you on BiggerPockets Money, can you tell us a little bit about yourself?

Kyle:
Yeah. I’m sure some people have listened over there, but I am a farm boy from Oregon. Grew up on a Christmas tree farm. Became a CFP soon out of college. Spun off a little bit from the firm that I was working at, started my own firm. 10 years later, which would’ve been last year, sold that firm. And in the meantime, invested in real estate throughout that time. And I guess you can put the FIRE label on last year. That was the final stroke. But yeah, I have twin boys that are two years old and a boy who’s six and a wife, and we enjoy spending lots of time together, fishing, outside all that jazz.

David:
And FIRE stands for financially independent, retire early. Correct?

Kyle:
That is correct. Yes. Sorry, we have to explain that acronym for sure. Yeah.

David:
It’s the new flex instead of a BMW. You hit the fire designation.

Kyle:
Yeah, it’s funny. You still keep working even though I hit that, but it’s more fun, I guess.

Henry:
You don’t just stop doing stuff when you hit FIRE?

Kyle:
I tried, yeah, but my twins wouldn’t let me.

David:
Basically means you don’t have to tuck in your shirt or wear a tie. That’s the real flex, right?

Kyle:
For sure. For sure.

David:
Well, today, we’re going to be talking about how a late starter can get into real estate investing. What advantages a late starter has versus someone in their twenties. So let me ask you, Kyle, for someone who’s a late starter, do they have an advantage over someone who’s younger?

Kyle:
Yeah, definitely. I think a lot of times, people who are a late starter… And maybe we’ll put some parameters around that. It could be anywhere from 40 into your sixties, I would say. You can start anywhere in there. And sadly, I’m getting close to that 40 mark, so I would be a late starter here coming up. But I think there’s a lot of advantages that someone might have. A few of those would probably be, you’re very established in your career. You might have some savings, some nest egg, some 401(k), some IRA, some Roth IRA, potentially a decent amount of equity in your own home. Some of these things that someone who’s starting out right out of high school, right out of college is just not going to have.
Those are some of the basic things and we can get into a few more as we go here, but that’s setting up the stage for someone that we’re maybe assuming has got their financial foundation under them, but they’re just now looking at real estate.

Henry:
I actually used a 401(k) to get started investing in real estate. And it wasn’t something I knew about prior to. I just stumbled on learning that that was a thing. And so if you’re looking at 401(k)’s, the average 401(k) amounts around 76,000 for people who are typically between 35 and 44. And then it goes up to 142,000 for folks between 45 and 54. And then it really jumps to 207,000 for people between the ages of 54 and 66. So how can someone leverage their 401(k) if they want to start investing?

Kyle:
Yeah, that’s a good question. I’m going to shoot it right back at you, Henry. How did you use yours? And we’ll go off of that. What did you do?

Henry:
Yeah. I took out a 401(k) loan and they allowed us to… Well, let me caveat this correctly before I get myself into some big trouble, Kyle. We, my wife and I, took out a 401(k) loan on her 401(k) because I wasn’t financially savvy enough at the time to have one. And so she allowed us to tap into her 401(k) for our first deal. So we did a 401(k) loan. I think we could have borrowed around 60 grand or something like that, but we only took like 20, and just enough for the down payment for a deal, bought a rental property, and then used the rents to pay off the 401(k) loan.

Kyle:
Love it. Yeah, that’s probably the most beneficial route that people would go. There’s a few other ways you could go about it. A couple of things to keep there. And I should throw a caveat out there too. I am a CFP, but I’m not your CFP or anyone listening to the shows’ CFP. These are just some ideas. But the 401(k), every plan is a little bit different on what you can withdraw and how you can withdraw and how you have to pay it back. And one thing to keep in mind too is that if you leave that employer, be really cognizant of what you have to do with that 401(k) loan if you leave. Usually it’s a quick payback about a 12-month timeframe or less. So just keep that in mind.
There’s a couple other things that you can do too. One, the thing that I’ve done a couple of times for short term needs in the real estate arena. There’s something that’s called a rollover. When you move a 401(k) to an IRA, or a 401(k) to another 401(k) at another employer, or even to a Roth IRA as a conversion rollover, all that to say you’re moving it from one retirement account to the next. Usually, it’s a direct rollover where it goes straight from the custodian like Fidelity to Schwab. But there’s something else that’s called an indirect rollover, that you can actually take the funds in possession yourself for a certain amount of time, and then you have to get them into that account or they become taxable and penalized depending on what age you are.
So in that case, it’s actually a 60 day timeframe and you can do it once every 12 months. So I’ve done this for short-term projects, a fix and flip type of scenario. But you need to have a way lined up to be pretty sure to be able to pay that money back in that 60 day timeframe. But that’s a little hack that someone could get themselves in trouble or use it potentially down the road. But you can only do that every 12 months. But I’ve switched between me and my wife being able to do that a couple of times every 12 months for different things. Haven’t done it for a few years now. But there’s different ways you can go about things with the retirement accounts.
And one other thing I should say is that, that loan that you took out, there are ways to put real estate inside, say, a self-directed IRA and that if that’s the only way you can get started, that’s a great way to get started. But in general, it’s best to keep retirement accounts and real estate investing separate. That’s a big generalization. But the reason I usually make that generalization is that you’re losing tax benefits from both accounts if you muddle them together. They both have their specific tax benefits, and real estate has so many specific tax benefits that if you put it into a retirement account, you lose some of those. If it’s the only way you can get started, that’s great, that’s fine. But something to keep in mind when you are thinking about going that route.

David:
So for someone who’s a little older that isn’t thrilled about the idea of house hacking, maybe they’re not willing to compromise on comfort, they’re used to the place they’ve been living, it’s kind of like their life is set up, a lot of them may have boat storage at that point or a workshop and they’re not willing to move from one house to another. How can someone still leverage their primary home to get them started in real estate investing?

Kyle:
Yeah. I think the late starter, you guys have covered this on the show before, one of the biggest things is going to be your home equity and your primary residence. If you’re doing a good job of saving and you’re paying down and say you’re 10 years into a loan on your primary residence and maybe it’s your second or third house that you’ve rolled equity into over the years, a home equity line of credit is a really good way to at least prepare for real estate investing. I would say that’s one of the first places that I would go and one of the easiest places that I would go.
And sometimes, people worry about taking out a home equity line of credit and they think, “I don’t want to have this big loan that I have to pay extra interest on and it’s risky to have more debt on my house.” Well, you’re not adding risk until you draw on that line of credit. It’s a line of credit. And that’s sometimes people maybe get that confused, but it’s just a great another plan B, C, or D in your arsenal of another financial well that you can go to if something bad happens or if you want to invest. What you do down the road to create a permanent financing for your real estate might look differently than the HELOC, the home equity line of credit in the short term.
But that’s a great route. Go to your local credit union. If you’ve got a lot of equity, go put a HELOC on your house right away as big as you can, just so you have it. You don’t have to use it. They usually cost $75 to a $100 a year for their maintenance fee. And that’s it. A couple of things to keep in mind. They usually have a variable interest rate on the stuff that you draw out of it. But again, if you’re not using it initially, just have it there ready to go. When that house across the road from you goes up for sale and it’s the lady that passed away and it’s a smoking deal, you know it’s worth a lot more that you can pounce on it with a cash offer and then turn it into something. Just have that dry powder in that HELOC. It’s a great way to be ready.

Henry:
Yeah. I was going to follow up there. I think you touched on a little bit of what I was going to say is that there is a lot of fear around HELOCs. And I think you did a great job of explaining like, what we’re saying is, you can go get access to the money now. And yes, there may be a variable interest rate, but you don’t pay for any of it until you use it. And yes, some can have variable rates. I’ve had fixed rates on my HELOCs at times. And so you can get access. And it’s just a way of… It’s like having a credit card almost, right? You’re not paying anything for having the credit card, but if you need the money, it’s there.

Kyle:
Yeah, definitely. Some of them have a conversion feature that you take it out and you can convert it to a fixed loan at some point. That’s something to keep in mind when you’re signing the initial HELOC. They usually have-

Henry:
I did that.

Kyle:
… certain different… Yeah. So that might’ve been what you did. There’s different features that come. And every bank is different. That’s a very unique product to different ones. So it’s definitely something to throw in there in the mix of things if you’re getting ready to go.

Henry:
I often see that there’s two camps when it comes to HELOCs, right? Because people are right, they’re like, “Oh, don’t take on extra debt in your personal home. That’s a crazy idea.” And some people love it as a means to get started. So what are some of the risks in the current market environment you see as to using a HELOC to get started?

Kyle:
That’s a good question. I don’t know in the current market if the risks are a whole lot different than they would be in just about any market. The one that jumps out to me right away, and David, you’d be on this too with a mortgage company, is just rates being higher and it being harder to permanent financing on something. If you use that HELOC for something and you’re not able to find good permanent financing to put on that investment afterwards, you now have variable rate debt on your primary residence where if you lose your job and you’re not able to make payments on your primary mortgage or your HELOC or both, that gets you into the foreclosure territory.
And I just went down a rabbit hole of fear right there. So I’m going to back up just a little bit because even if you… So maybe take myself as an example. So last year, I sold my firm. My income went from a good income to zero on paper. From a financing standpoint, I have a HELOC on my house that I use for different purposes for investing on and off, pull out of it, pay it down. The HELOC stays there. The bank doesn’t come and say, “Hey, you’re not working, your income changed, we’re calling your HELOC, we’re calling your first mortgage on your property.” That doesn’t happen. It’s if you don’t have the resources or the reserves somewhere else to continue to make those payments if something in life changes.
So just like with any debt, with any obligation, have reserves. If you’re getting to the real estate investing, have reserves. This is something that is very important. And that ties back into these accounts that you have at the late start that you don’t have when you’re younger, is that these accounts… And again, David, being in the mortgage business, you know that these accounts can be used as reserves for qualifying for certain loans for properties, and they can be accessed if you get into trouble. Like a 401(k) or an IRA, if you need to pull some money out of that to help push a property through a bad period of time, you can do it. It’s going to hurt a little bit.
Say you pull 50,000 out, that’s going to get added to your income for the year, so you’ll pay tax on it. You’re also going to pay another 10% penalty on top of that if you’re under age 59 and a half. But if you’re a late starter and you’re over 59 and a half, you don’t get that 10% penalty. So there’s a few things to keep in mind there, but you having these big accounts that you’ve built up at a job or a few jobs over the years is definitely an advantage over someone just starting out.

David:
So what about if somebody wants to add a little bit more income to their primary residence? We’ve talked about HELOCs, we’ve talked about 401(k)s. What’s your thought on if they build or convert a part of their house into an ADU to add a little bit more rental income? Good idea or bad idea?

Kyle:
I love it if they’re going to love it. I think it depends on how passionate you are on this whole real estate journey. Are you going down the road as just like a little diversifier or are you’d making a big switch to it being your main retirement income? Because at this point, people are thinking… As a late starter, you’re thinking about retirement income. This is not like, “I’m 20 and I’m thinking of this is what I’m going to do for the next 30, 40 years because I enjoy it, or I want to be financially independent.”
When you’re 45, 50 to 60, now you’re thinking, “I’m getting older. I might not be able to do the job that I’m doing now forever. I need to have some income.” So all that to say, ADU on your property, short-term rental, these are great things, especially if you’re a hospitality minded person. And if you have a little business acumen, you got to run it like a business. You can’t Joanna Gaines your [inaudible 00:16:01] and have some people come stay there and you charge them $95 a night and book it a 100 nights out of the year and you’re negative 200% every year.
So you got to run it like a business. You got to run it with a hospitality mindset, especially in the short-term rental industry. That is what drives the reviews, which drives your occupancy, which drives your rates, which drives your profitability on it. So I think it’s great. We have several short-term rentals and I love it. I worked at a resort when I was in college and the hospitality piece is just fun. But you also get some weirdos too. So you got to be ready for that too. And if it’s on your property, that brings another level to things. Do you want somebody on your property? Are you okay with that, with people coming into your property? The proximity can make a difference there too. But it is a good way to get some extra income faster as opposed to straight up house hacking.

David:
So here’s what we’ve learned so far. Late starters are more likely to have a stronger cash position, a possible 401(k) that they can tap into or other form of retirement account, a primary residence that hopefully has some equity built up, and a little more life experience. I imagine they’re a little more savvier when it comes to picking the right contractor, making the right decision. Their algorithm is more developed because they’ve seen more things go on in life. Anything that I missed there, Kyle, that you would add to this that advantages to a late starter?

Kyle:
I don’t think so. I think you hit the one right at the end there that we haven’t touched on yet, is that they have life experience. And I think I would encourage people to ask themselves if they’re a “late starter,” why are you transitioning to real estate? Why haven’t you done it in the past, actually might be a better question. Is it because you didn’t know about it? Well, that’s great. Now you’re finding out about it. You’re maybe excited about it. What’s your personality like? Are you someone who takes action, and if you get under this real estate umbrella, you’re going to drive forward and do it? Or is it because people have told you about it? You’ve meant to, you’ve meant to, and you haven’t done it.
We all have friends who have thought about it, and thought about it, and it’s five years later, and it’s 10 years later, it’s 15 years later. And man, if they would’ve bought 10 years ago, things would’ve been different. So you need to really self-assess what personality you are. Because if that’s your personality, you’ve got some work to do before you dive into something new at this point in your career. If you’re someone who is like a go-getter, go for it. I mean, this could be a cool exciting point in your life.
And especially, if you have kids watching you do this awesome transition into something new and exciting when you’re 50 or 55, what a great example to show them of how you can make a transition and learn a new skill. And a 10 year timeframe, for just about anything, you can crush it. 10 years is a decent timeframe to just nail any new endeavor if you really put your mind to it.

Henry:
And for anybody who’s sitting back cringing at the idea of hearing us talk about leveraging these investment vehicles they’ve worked so hard to build up in order to buy real estate, we’re not saying go buy anything. We’re saying, you’re going to go buy the right thing. Right? You’re going to use that wisdom to understand that we’re going to buy things where we have a lot of opportunity cost, where there’s a lot of equity built up. The better deal you buy, the less risk you’re taking on. And so it’s really all about being savvy about what you’re choosing to buy and not just buying real estate for real estate’s sake.

David:
That’s true. And I’ll put one last cherry on top of what you said there, Kyle. The worst time that I’ve ever seen that anyone could have bought real estate in was 2005. In recent history, I don’t think you could have had a worst perfect storm of all of the fundamentals being wrong, real estate values going up for all the wrong reasons, and then a nasty crash in 2010. But if you bought in 2005 and you waited 10 years, by 2015, not only were you not underwater, you had made ridiculously good money. That’s how quickly it turned around.
So as you’re thinking about these scary decisions, stop thinking about the immediate, what’s right in front of my face? What if the market crashes tomorrow? And start thinking about what’s it going to look like 10 years from now? Because 10 years becomes 20, becomes 30, becomes retirement. And the worst thing you could have done would be to do nothing at all. Thanks for being here, Kyle. Appreciate you, man. If everybody would like to hear more of Kyle, check him out on the BiggerPockets Money Podcast. Or Kyle, where can people contact you directly?

Kyle:
Yeah. You can just check out my website kylemast.com, or I’m on Twitter @whoiskylemast?

Henry:
So far, we’ve already spoken to Kyle Mast about advantages a late starter may have when investing in real estate. We talked about 401(k)s and HELOCs and as well as adding value to your property. And so now we’re going to talk to Kim Bosler about her journey as a late starter. Kim Bosler, welcome to the show.

Kim:
Hi. I’m so thrilled to be here. Thanks so much, Henry.

Henry:
Give us a little background, Kim. At what age did you get started investing in real estate?

Kim:
I was 56. And I have six children and 20 grandchildren. So I put everything into being a mom. I absolutely loved being a mom and raising kids. And as they started to leave and no one was in California, I thought, “Wow, I’m going to be having to take a lot of plane flights.” So one day, I was on a plane and I ran into a really dear friend whose husband had just passed six months prior. And I was consoling with her and she said, “You know, but one of the greatest gifts that Gordon ever gave to me was five homes.” And I said, “What do you mean?” And she said, “Well, he bought five homes, and now that’s my play money. And so I’m able to go visit my grandkids whenever I want to.” And I was like, “Ding, ding, ding. That’s exactly what I want to do.”
So we had fiddled with real estate early on in our years when we were first married. And we didn’t know what we were doing. So we bought a little old home that took a lot of maintenance. And we didn’t have property managers. And every weekend, Bruce was fixing a dishwasher. And also, we were in the red from day one, so we hated real estate and we were never going to do it again, especially my husband. He said, “No, this is not for us.” And so I was always thinking, but to me, it seems like the closest thing to printing money. If you buy a home and someone else is living in it and they’re paying off your mortgage, how is that not like printing money? Really.
I mean, I kept thinking about it like, “There’s got to be a way because I know that there’s people that are successful in it.” Especially single family, it seemed like. So I was at the gym one day. And this is after all my kids had left. I think my son was a senior, but all five were married. And I was jogging along on the treadmill next to a dear friend that had invested quite a bit. He had several properties. And I said, “How did you do it Rusty?” And we were talking and he said, “Well, I think you should just hook up with… My wife loves RealWealth Network with Kathy Fettke.”
So I didn’t have a pen or paper, and I’m thinking the whole time as he’s talking, “RealWealth Network, Kathy Fettke.” So I go home and I looked at the podcast and I started going to events and I just loved it. I thought, “There’s so much information on here for beginners. This is fantastic. Maybe I can do this and I can get some homes and have some play money and great retirement.” We don’t have a pension. We have a 401(k). But you never know how long you’re going to live, right? I mean, how do we know? So I went home and I put on my vision board six homes, because my friend had five. So I thought, “Well, I better have six.” I don’t know why.
And I really laughed out loud. I thought, “There’s no way Bruce was going to go for this.” And I finally took him to an event. And it was a great event. It was North Texas. And the presenter was saying about these homes. And we looked at them and the math just made sense. You don’t have to really be a rocket scientist. They were $120,000 and they rented for 1200, and that was at the time. So Bruce looked at me and he said, “Well, I think we should buy six. And I was like, “You’re kidding.” I was just so excited. I said, “Okay.” And he said, “But you’re going to have to take it out of the HELOC because this is going to be your thing and I want you to prove that you can pay this back out of the rents.” So I said, “Okay. Deal done.”
And they were new construction, so there wasn’t a lot of maintenance. And I know a lot of people in the audience are thinking, “Oh, that was the day. Okay. 120. You can’t do that anymore.” But I hope that everyone knows that there’s always a way, there’s still deals out there. And we can get to that later. It’s never too late to invest in real estate. It isn’t. So that was the start. And then from there, we went to 1031 exchanges after a while. Your home builds up in equity. And then you can do a 1031 exchange. You don’t pay any capital gains and it goes straight into a bigger property.
So this week, I am not kidding, I am so excited, I found my dream home. And I was able to sell five properties. And I also bought a duplex with it in Texas, and was able to buy my dream home. It’s beautiful. Beautiful views, right near my mom family. I’m just absolutely thrilled. Now, you can’t take 1031 money and put it towards a personal home. Correct? So we will rent it out for two years or as long as we want, and then eventually move in, and then it becomes our personal property. So I’m just over the moon, to be honest. Absolutely thrilled.

David:
Now, when you first started investing in real estate, Kim, did you have any fears or hurdles that you had to get over? And what did you do to get over those?

Kim:
Well, there’s always fear in everything you do that’s big and exciting and you’re learning. And so I think part of it was just hanging out with people that were experienced and did it. I think it’s really important to get a great team that you can trust. That’s the most important thing. You’ve got to get a great lender, you’ve got to get a great property manager, turnkey provider, unless you want to find them on your own. And a lot of people do. But when you’re really busy with other jobs, maybe a good turnkey provider, maybe a build to rent, or somebody like Lori Woodworth in Texas who just works her buns off at Hello Texas to just find these properties that actually builders will lend you. She finds builders that will lend at 4.75. She finds properties that are assumable loans. Things like that, that are still available today.
So you just have to find a trusting accountant. I got a bookkeeper right away too because I didn’t want to do all of that. So I think it’s important to get a very trustworthy team because, guess what? Every single person that you meet in real estate is absolutely amazing. And then you start to work with them and you start to realize that some can be sharks, amazing sharks, but they are not honest. And so I’m a trusting person. I believe everybody. And I have been burned a few times because I’ve believed people. So that’s why getting in a network like RealWealth Network, who they’ve already vetted all these people, is really valuable. And I just adore Kathy Fettke. So that’s another thing.

Henry:
One of the biggest hurdles that new investors face is, they’re not really sure where to invest. And so talk to us a little bit about how you picture market when you got started.

Kim:
Well, when I was looking, of course it was Leah Slaughter that was presenting these properties, and she was telling all about North Texas. And it made sense because of the jobs that are flooding in. I just know, I live in California and it seems like half the businesses are going to North Texas. And the new freeways that they’re putting in. And so you want to look for real job growth. You don’t want to go out in Timbuctoo where if we have a financial crisis in the nation, it is going to be harder to get those places rented.
An interesting thing that I’ve noticed is, as things tighten up, the squeeze and the interest rates get higher, you’re also getting more renters because more people can’t seem to afford homes in the beginning. So it’s always good to have, I think, real estate. It just is.
But that’s one of the things I look for is mainly job growth. I mean, where would you like to live? I like the Sunshine State. So I like to invest in Florida too. That’s just a fantastic place. I was fortunate to do some 1031s into Florida before the pandemic and all of those homes doubled in value and they’re just continuing to go up. There’s build-to-rent and rent-for-retirement, and they do things like they actually build for investors to rent, and they’re all new construction. So there’s just a lot of great places.

David:
So with these investments that you bought, what was your strategy? Were these buy and hold? Were they BRRRR properties? Were they short-term rentals? What were you doing with them?

Kim:
You know what? That’s such a great question because all of those are such great possibilities. Some people feel very uncomfortable with leverage, and I was one of those. We were solid inlets. Just buy 10 homes and pay them off and be good. But at the time, I’m really glad that we did leverage because we were able to buy twice the properties or more. And all of those properties just, it was good timing too, but they all just really went up a lot in value. And I love Florida. So that was a good move to do the 1031s.
And so, I think you just have to look at the market and the strategy and do what you feel best about. My friend that I was on the plane with, she had five to just buy and hold. He had those almost paid off. Some people are extremely against that because they think you should leverage as far out as possible and buy as many properties as possible. So it’s all your comfort zone, it’s all what you feel best about. And really, there is probably no right or wrong. It really depends on you and what you’re comfortable with.

Henry:
Okay. So just to clarify, it sounds like you were buying and then renting them out for a period of time, and then you would sell them in 1031. Is that correct?

Kim:
Right. We held them for about five years, and then we switched a few of them out right before the pandemic, which was a good timing. And then we took those properties, some of those that have gone up so much in equity, and were able to buy this dream home. I mean, honestly, I’m so happy about it. Every day I am like, “I can’t believe this happened and that I was able to it.” Because also now, we’re able to keep our primary home, the one I’m living in now. We didn’t have to sell that one to move.
And this home, we’re trying to decide, should we just have two homes or should we maybe rent this one out? This one will rent for $4,000 a month because we live next to Travis Air Force Base, and the military is constantly looking for housing. And so a lot of our friends… Not a lot. A few have moved out of their home into a trailer park. And they’ve fixed it up and it’s cute, but then they get this extra income on the side on their primary home which is really valuable to them. It’s equal or greater than their social security check. So anyway, it’s nice to be able to have that option.

David:
So when it comes to management, did you self-manage these or did you end up hiring a property manager to take care of them?

Kim:
Oh, heck no. I would never self-manage, or that would be really full-time. I’m a real estate professional now, which I did want to mention is great. If your partner is working and you can become a real estate professional because you can put 17 hours or more a week, which is things like bookkeeping, it’s looking at properties, it’s podcasts, it’s travel, it’s a lot of things that can equal that 17 hours. So it’s really easy to do 17 hours a week. It’s very easy. So you want to be a real estate professional without having to self-manage. And I only self-manage one, and it’s because I have perfect tenants.

Henry:
So give us an example now. How big is your portfolio today?

Kim:
Well, I started out just wanting 10 properties. And so now, it’s probably just double that. It’s because we sold some. And for my comfort level, that’s good. I think, there’s some people that have 400 properties, not very many probably, but I do know some. And to me, that would be overwhelming. So it’s just your own comfort level. And I think those will be pretty sufficient. What you should do is just decide how much do you want to live on. How much do you want to live on when both of you aren’t working anymore?
And then you just look at your rentals and say, “Is that going to be enough?” And then you can stop there. You can keep going. It depends on how much you love it. I mean, some people just get really addicted to it and they’re always trying to find deals and BRRRRs and all kinds of things. My brother, for example. He would never buy a new construction home. He likes to buy these total fixer uppers and do it himself. So it’s whatever you like. That’s what’s so great about real estate. What do you like to do? What do you want to do?

David:
Yeah. There’s a lot of creativity they can work into it. And the people who have the blueprint lenses that they put on, these blueprint glasses, like, “What’s the blueprint, Henry? Tell me exactly what you buy. Or Kim, what did you buy? What did it look like? Was it three bedrooms or four? I have to know. Was it three or four?” That miss out on all of the different ways that you can structure this to work based on your personality, your skillset, where you want to go, what you want your retirement to look like. So on that note, how many years did it take you to build a portfolio that you feel you could retire on? And what were your target properties that worked for you, Kim?

Kim:
Well, it just depends on your properties too. But I would say 10 years. And then, like I said, you just take what you think it will take you to live on. We have 401(k)s and things like that. And I would say, do a mixture. Some people are a 100% real estate or a 100% stock market, but I would really advise to do both, just in case. I like having hard assets in case the stock market crashes. And when the stock market is climbing, then I want to have stock too. So I would just say, have a balance. And then you never know about anything really. You just do your best and hope that you can live your life in gratitude and joy for right now, because that’s all we have is really right now. But you want to still prepare for the future.

David:
But it sounds like you wanted simple, right? You didn’t want a big fixer upper like your brother. You didn’t want to run a construction zone. You wanted something that was sort of plug and play like Monopoly. I want that little greenhouse and I want to stick it on the board and I want to start collecting rent. So you picked a market that you believed was going to grow over time, would have a solid tenant base. Maybe it’s not incredibly sexy. You’re not going to scale to 500 units using the BRRRR method, but the simplicity of it was attractive to you.

Kim:
Absolutely. That’s what I wanted. And I found that 3/2s are excellent. For me, it worked out really well. One or two car garages. Preferably, people like two. But I always would say, “Well, what would I want to live in? And what neighborhood would I like living in?” Because sometimes, people will try to sell you a home that is really nice online, but when you go to Google Maps, or actually I would fly there, and I would say, “I wouldn’t want to live on this street. This is the only good house on this street.” And so you have to work with people that you trust. So important.

Henry:
Well, I think that that’s a great piece of advice. What other advice would you give someone who feels like they’re getting started a little late, but are interested in doing this?

Kim:
Well, I have a little saying, and Michael Jordan said, “Some people want it to happen, some people wish it to happen, and some people make it happen.” And some of those people… We all know about Ray Kroc, right? McDonald’s. And Ronald Reagan, he was 54 when he switched from acting to being governor of California. Martha Stewart didn’t start till she was 50. I mean, really, you hear about these big names that start later, but it’s never too late. It really isn’t. I mean, there’s expiration on a milk carton, right? But that’s not us. I think we get better, we get wiser. We have more fun in life. We enjoy things more, because not so uptight. We’re just enjoying our kids and grandkids. And we’re just… I don’t know. I like this stage in life. I really enjoy that I started later.
I actually don’t think I could have done this with kids because I was so into all the things they were doing. If anyone called me about a property, it would be a week till I got back to them. And now that I’m home and I am an empty nester, it’s really nice. And another thing about it is we wouldn’t have been able to buy six properties, even on a HELOC, if we were just newly married. So there are some advantages to being older. You’ve got better credit. Hopefully, you have more savings. You’ve got more wisdom. And you’re enjoying life. And so it’s just icing on the cake.

Henry:
Wonderful. Well, there you have it, folks. You heard it right here. Kim is letting you know it’s never too late to get started. I really, really appreciate you taking the time and sharing this experience with us. And I am super happy for you that you’ve now been able to purchase your dream home. That sounds like you are loving that. So thank you so much for sharing the story. If people want to learn more about you or get in contact with you, is there a way they can do that?

Kim:
Well, I’m on Facebook. And it’s Kim Woolf, that’s my maiden name, W-O-O-L-F, Bosler, B-O-S-L-E-R. And you can DM me and I would be happy to get back to you and guide you to some people that I trust personally and I’ve worked with, and just encourage you if there’s something you need, because I do think it’s an amazing way to have passive income. I really do. Or I wouldn’t be here.

Henry:
David, how can people get in contact with you?

David:
Well, I sure hope they do because I’m lonely and I need more people to be my friend, if I’m being frank here. They could do that by visiting davidgreene24.com and checking out my chat option and seeing the stuff that I have going on. Or they can DM me on their favorite social media. I’m @davidgreene24 everywhere. Henry, where can people get ahold of you if they just want to see how your big brain works?

Henry:
The best place to reach me is on Instagram. I’m @thehenrywashington on Instagram. Or you can go to my website, www.henrywashington.com.

David:
Alrighty. Well, thank you, Kim. What a cool and inspiring story that you shared. And thank you for relaying it in such a positive way that there is hope out there for people even if they feel like it’s too late to get started or they’ve passed up some opportunities in their past, that does not mean that they cannot do this now. In fact, it’s probably more important than ever that they do. Thanks for being here today. We hope we see you again.

Kim:
Thank you, David and Henry.

Henry:
Thank you.

David:
This is David Greene for Henry big brain Washington. Signing off.