2020 Was A Strange Year
For some, it was a terrible year. For me, however, it was a blessing year (minus all the bad covid stuff). I hope that doesn’t seem insensitive to the very real issues that many people faced this year.
When the world paused in March, I took time to reflect and plan my way forward, regardless of the trajectory of the pandemic. That reflection and analysis of my situation at the time led me to pivot to focus on commercial multifamily. And I’m glad it did because I have had the chance to meet some amazing and very successful people in the space since then and have begun my own journey with a 66-unit property now under contract (knock on wood it closes, or I look like a dufus).
2020 presented itself to me as a blessing in disguise. It required me to analyze where I was at and where I wanted to be. Before the pandemic started, I felt like I was in a race against society at large. As if I had a deadline to do a certain number of deals or reach a certain level of income. When the pandemic hit, I saw everyone take a pause and felt as if the race had been paused as well. I took advantage of that time to chart a new course and start to focus more time on the substance of bigger deals rather than the volume of smaller deals. I took a hard look at myself and my taste in real estate pointed me more towards the efficiency and scale that multifamily offers. At some point, I want to be able to manage property managers as I’m off adventuring around the world. I saw that multifamily could afford me that in a more straightforward fashion.
With that has been a long learning period where I still had some residential deals that I was working on. I’m glad I did too because they made a big impact on my personal financial situation. Once I reached my financial freedom number, I had a small burden off but realized I reached my 5-year goals in 1 year. I needed bigger goals!
In my first full year of real estate investing, I was able, despite many setbacks and frustrations, to achieve what I considered to be some awesome milestones. Through a combination of my W2 income as an Air Force officer, my active income from wholesaling and wholetailing (see Deals post #12 for the difference), my passive income, equity, and appreciation I made just over $500,000 as a 23-just-turned-24-year-old. And this is with only 6 rental properties and 4 property sales! That’s why real estate is so powerful! What other way is there for a young guy with no rich people in his family who also works full time to make that kind of money as tried and true as real estate? On top of that, here are a few of the things I’m proud of for 2020:
Wins for 2020
- I started The Multifamily Journey Podcast as an avenue to not only learn myself but pass along real and transparent advice on what it takes to start and scale a multifamily portfolio
- Added 9 cash flowing rental units to my portfolio
- Got under contract on a 66 unit apartment and an 8-unit future BRRRR’nb
- Replaced my W2 income with my cash flow
- Became married to a doctor (my wife graduated with her DPT)
- Learned from great mentors and met amazing people
- Joined an awesome mastermind
- Started hosting the PCB real estate investor meetup
- Sold 4 properties that netted healthy pre-tax gains
And of course, there were setbacks! No success comes without failure.
Losses/Setbacks in 2020
- Dozens and dozens of rejected offers
- A couple of residential contracts lost (1 the seller changed their mind and the others were due diligence issues that didn’t pan out)
- Missed opportunities from not offering on properties or not pursuing further
- Stressing my relationship with my wife (which became a big focus to fix)
- I had to drop my partnership (for now) with Growth Vue because I became inundated and a bad steward of my own time
Now I could have let any one of these take me out for good but I decided to make them learning lessons. It’s easy to play the victim card or to blame the market. I could easily say the reason for my lack of progress earlier in the year was due to an overly hot or oversaturated market. Truth be told, I used most of that time to get the lay of the land. I couldn’t have competed with the big boys right away. And if anyone tells you that you can, turn and walk the other way. However, you can with time by building a strong foundation and making the right connections, because that’s what the big boys have – strong foundations and an all-star network. I spent 2020 in large part (and still am) trying to build just that.
So, here is my 2020 in a review. I say it not to brag, not to boast, and not to gloat. I thought over a month about this post. And here I am on January 11th as I finish this article up. It was not taken lightly and was not meant to only show light in some areas while keeping the others in the dark. I hope it shows what’s possible but also highlights that it was a looong year. None of those successes above happened overnight, or even in a week. But give me a physical asset class that doesn’t correlate to the stock market, creates more wealth over time, and generates cash flow in the meantime and I’ll put the work in. Real estate is something that is proven and easily repeatable and if I can do it, I believe you can too.
Blake Dailey is a multifamily real estate investor and host of the Multifamily Journey Podcast. He has reached his financial independence (Passive Income > Expenses) number through investing in real estate and aims to help others do the same. He helps passive investors impact their lifestyle and wealth by investing in multifamily real estate. He seeks to help investors achieve the ultimate asset – time – by making their money work so they don’t have to.
Find out about investing in multifamily with Blake at ww.multifamilyjourney.com where you can also learn more about Blake, read his articles, or connect with him.