How I turned $40k into a $2.1M Real Estate Portfolio

Spoiler: Despite the spicy title, this is a story about way more than money.

It’s April 2013, and I’m spending my 25th birthday relearning how to walk down a flight of stairs. I’ve just spent the past 8 months fighting for my life so this seemingly mundane task is a huge victory for me.

A little less than a year before, I had been diagnosed with end-stage kidney failure. I put my entire life on pause with no idea when I would be back on my feet again.

By the grace of God, I found someone who could donate their kidney: my father. Well, it was a little more complicated than that. A team of doctors had advised against his donation due to health issues, but he wouldn’t accept their answer. Ultimately, my parent’s sacrifice allowed me to survive. It was as if moving to an unfamiliar country to give their children better lives wasn’t enough, they needed another notch in their belt. I’d always been mindful of honoring my parents but it was different now.

It took a few months of being back on my feet to internalize and reflect on everything that had happened. I realized that life after my transplant had to be dedicated to their well being and legacy, rather than my wants and needs.

I’ve always moved with a sense of purpose but it was heightened now. My father literally sacrificed his body in order to give me a chance to survive. Heavy? Yeah, but also true. Given the level of financial insecurity that my family has experienced our whole lives, I decided to start there. How could I solve this for them?

After a few weeks of brainstorming, I came up with a unrealistic, harebrained plan: I would make enough money to financially retire my parents in the next 5 years. Now mind you, at this time I was recovering from a kidney transplant and making $0/yr but I was resolved. I spent the next few months researching and plotting on how the hell I was going to this. The idea was crazy: here I was at 25, trying to rebuild my own life while also figuring out how to generate $200k /year to put my parents in decent financial health.

A few weeks later, I came to the conclusion that investing in real estate could be a vehicle for me to pull this off. By buying and holding rental properties, I could create passive income while creating appreciation over the long term, thus building a wealth engine for my family to benefit from. Hmm.

First, I did some quick math:

If I could acquire 3–5 rental properties per year that cash flowed around $1000–2000/mo each, over a 5 year period I could generate around~$250k in free cash a year.

Cool. The only issue? I needed a couple hundred thousand dollars and the know-how to make this work. Let the games begin.

I spent the next 12 months plunging into the world of real estate. I scanned online forums to learn the language and terms, I attended local meetups and started scanning Zillow to piece imaginary deals together to test my hypotheses. I consumed podcasts, stayed up late learning different mortgage types and pushed myself to figure it all out.

Most importantly, I starved my indulgences and saved money. Don’t get it confused, I still had no idea what I was doing but I was learning.
At the end of the 12 months, I had saved around $40k in profits from a new business. This would be *just* enough to purchase a condo unit for myself in a developing area of the NYC metro and instead of paying my idiot landlord every month, I could start building equity for myself.

Cool, let’s do it.

After months of scrambling with my agent, mortgage lender, home inspector, condo board, amongst others, I had finally closed on my first piece of real estate(!). But, without even realizing, I had already made my first mistake. See, condo units don’t really appreciate in value. Additionally, you can’t make any extra money from it since you’re essentially paying to live there. Instead of buying a condo, I should’ve invested in a multi unit, income producing property but I didn’t know better. (Luckily the value of my condo has doubled in the past 3 years and ended up being a stellar investment, but it wasn’t the play I should’ve made. I digress.)

What my condo purchase did do was give me the confidence to delve deeper into the real estate world and figure out my next move. What I didn’t have in capital and resources, I had in hustle and foresight. I had the ability to know which neighborhoods would start appreciating before it happened because I spent hours driving around and learning the blocks. I studied the retail opportunities, the tenant demographics, the proximity to major centers of employment and more. Over time, I developed an investment thesis and tracked other properties that fit my model to see how I would’ve done if I had invested. Time after time, the properties that I had my eye on would sell for 20%-40% over asking price or move in all-cash deals.

Ok, maybe I’m onto something.

A few months after my condo purchase, I was looking for my next deal. At this time, I had been building my digital agency (GRC) and I had access to a little more capital than before. Again, I was saving every dollar I could. I could’ve easily bought myself a Tesla Model S or flown myself to Greece for a vacation, but I was focused. My larger goal of creating generational wealth for my family allowed me to block out any worldly distractions and keep that promise I had made to myself.

Shortly before closing my second property, I finally revealed my plan to my parents. “Real estate?” my father scoffed, “what do you know about real estate?” By this point in my life, I was used to his immigrant-Dad tendencies and didn’t take it to heart. In my head, I knew what I had to do.

I made my second property purchase after walking around the property for 3 minutes. I just knew. By this time, I had gone to endless open-houses (many times with the only intention to learn more about the area or study the construction), and I had developed a 6th sense for properties that fit my thesis.

During the negotiations, my mortgage lender tried to quote me a ridiculous rate but this time I had the knowledge to play ball. I called his bluff, told him I already had a better rate elsewhere and forced him to give to a quote which was 0.5% less than his initial one. This move alone saved me $40k over the life of the mortgage.

Ok, are we cooking yet?

This is why I missed your brunch, fam.

Writing this piece is the first time I’ve ever stopped to think about how far I’ve come with that crazy idea of mine. What I didn’t get to touch was that one time that my contractor left the country for two weeks in the middle of a critical inspection period on a renovation project. Or the time the city of Newark shut the water off in the middle of winter while my tenants were home. Or that one time I couldn’t find a portfolio lender in time and lost $80k in potential profit. But these instances never felt like Ls to me. I went down this road for a reason. I wasn’t doing this to get rich, I was doing this to provide for the people I loved. And when your motivations are pure, there’s nothing than can get in your way or feel like a burden. Chasing money is a miserable game, but chasing legacy is different.

Fast forward to the present: somehow, that $40k I invested into my condo unit has turned into a 7-figure residential property portfolio. But, this entire journey was never about the money. It was motivated by a purpose much deeper than that. A purpose driven by the need to honor my parent’s sacrifice and do my part to help them enjoy the back half of their lives. It was a way to give them the one thing we’ve never had in this country, which is financial security. When purpose powers your work, you’re no longer playing the same game as everyone around you. The only person you’re in competition is with yourself and the only thing you need to do is push yourself to get better.

When money is your main motivation, it’s hard to build something that is meaningful and fulfilling. Try to step back and analyze what it is that is really driving you. I don’t think you need to go through a life threatening situation to find purpose, but it does take some digging and self awareness. Chances are you’ll find something uncomfortable and it’s up to you to figure out how to deal with that.

In full transparency, I haven’t hit my goal of 15 properties in 5 years yet but I’m about halfway there. That leaves me with 2 years left to make up the remaining 50%. I like my chances.

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It may not look like much, but here’s a lot of land I purchased in Philadelphia for future condo development.

Have questions about entrepreneurship, investing, tech, music, or anything in between? Get in touch with me at @anihustles.

The oldest son of an immigrant. | CEO @ Green Room Creative. Investor, hustler, speaker. Connect: @anihustles