Side Hustle Series: How to Make Money With Real Estate

Hello everyone. Today’s post is the next installment of my Side Hustle Series. Today, we will be talking to Chad Carson about real estate.

Chad Carson is an early retiree who used real estate investing to reach financial independence. His book Retire Early With Real Estate teaches others to do the same. Chad and his family recently spent almost 1.5 years living abroad in Ecuador. When not traveling or investing in real estate, Chad also loves to read, write his blog, exercise, spend time outdoors, and contribute to his local community in Clemson, South Carolina. I met Chad at my first FinCon in 2015. We’ve been cool ever since then. Today, Chad will go over how to make money with real estate.

Make Money With Real Estate

What is your site about?

My site is about three things – real estate investing, financial independence, and living a life that matters. I don’t believe money matters the most in life, but it sure does get in the way of the things that DO. So, my mission is to help people reach financial independence (i.e. retire early) so they can do more of whatever matters most to them. Real estate investing was my primary tool to do that, so I teach others how to use real estate as well.

How did you get into real estate?

I started right out of college at 23 years old with about $1,000 and the title to my 1995, emerald green Toyota Camry with cloth seats. But I did have a few big advantages.

First, I didn’t have any college debt because I got a football scholarship at Clemson University,

Second, my father owned rental properties. So, I was able to call him and learn from his experience.

Third, I was ambitious, motivated, and had a lot of free time.

So, I started finding deals for other investors. Sometimes this is called a “bird dog.” Once I made a little money from those bird dog fees, I partnered with a friend to start actually buying the properties ourselves. We flipped houses to make a living for a couple of years, and then we also started buying properties to hold. We had to use private money from individuals instead of banks because we didn’t have steady employment at a regular job.

16 years later I’m still learning, growing, and loving the real estate game!

How many properties do you currently own or manage?

Together with my business partner, we own about 90 units.  About 60 we manage with the help of a really awesome assistant who does 90% of the work (See Landlording 101). And the rest of the units are with a 3rd party management company.

How does someone get started in real estate?

To start in real estate, you first have to decide if this will be a business (side-hustle) or an investment. They are two very different approaches.

If you want to start as a business, like I did, I think you need to find other more experienced investors to team up with. There is a lot to learn, so you can make more progress by not having to do it all yourself. You can learn one little small piece of the business (like finding deals), and get really good at it.

You’ll also need to carve out 10-30 hours per week at first. The hustle of real estate is like any other business – it takes more time up front as you learn and make mistakes.

If you want to start as an investment, my favorite way is house hacking. This basically means you live in a building and rent out other parts.

For example, you could buy a duplex and rent out the extra unit. Or you could live in a 3 bedroom house and rent out the 2 spare bedrooms to friends or on Airbnb. You could also buy a house with a basement or garage and convert it into a rentable apartment.

House hacking is so awesome because you have to live somewhere. But renting part of your residence lets you live CHEAP. You can save that money and invest it in your next property (or other investments). And after a few years, you can move out of your house hack and keep it as a rental.

If you did that 3-4 times, you could have all the rentals you ever need after 10 years! You’d be set for life.

Is there anything that you would have done differently?

Yes, we bought too many houses and got too aggressive in 2007 leading up to the financial crisis. Many deals were good and made us a lot of money. But others were negative cash flow and in tough locations. So, we learned a lot. We used a lot of our cash reserves for a couple of years, but we got through it.

I’d take it a little more slow and steady. It’s not a race. But going slower is safer and gets you there faster in the end.

Do you see yourself ever not doing real estate?

No, I love the game. I plan to always keep doing it. But now that I have rental income coming in, I’m transitioning to a more passive role. I’d like to be more the lender or passive partner instead of the active person. It’s sort of going full circle because now I can then help the newer, energetic investors with a lot of integrity and hustle but who have little capital. That’s exactly how I got started.

Talk about some of the advantages that investing in real estate has done for you. (Possibly discuss your time living out the country)

More than anything, real estate has given me a lot of flexibility and freedom. For example, I have traveled a lot. My family and I just got back from 17 months living abroad in Cuenca, Ecuador. My daughters got to attend local schools and become fluent in Spanish. And we just had an incredible experience as a family.

Rental income from back home paid for it all.

But I will say that the rental income doesn’t come easy. There is a lot of work and effort UPFRONT with real estate. It’s more like a business at first. But after 5 to 10 years of hustle and building systems, it can become very passive and lucrative.

Any advice for new real estate investors?

Get educated! You can listen to podcasts and read blogs for free.  You can network for free at awesome communities like BiggerPockets.com.  You can read books for cheap (my book Retire Early With Real Estate came out August 23, 2018). And you can network with other investors to learn how things work in your local market.

But most of all, learn by doing. Get out to look at neighborhoods, talk to owners of properties, and see what’s going on. You can’t replace that on-the-ground learning.

How can people get in contact with you?

I have a free Real Estate Investing Toolkit with a lot of cool resources to help you get started or make progress in real estate investing. You can get it at Coach Carson Newsletter.

Other Side Hustle Series Articles:

Side Hustle Series: Solopreneur

Side Hustle Series: Investing in the Stock Market

Side Hustle Series: What Type of Camera Should You Buy?

Are you interested in getting into real estate?