My Journey

Goals: My Journey in Rental Property and Real Estate Part 4


As I am writing this, it is almost three weeks after my purchase of property number 2. It is a good time to inform you of my goals, previous and future. A year and a half ago, my goal was to own four four-family buildings within two years. Today, that goal was ambitious, but I may get three quarters of the way there within that time frame.

Plus Four Zeros is my overall goal. To increase my net worth via the addition of four zeros. This is not a goal to be rich. It is a goal to be comfortable. A goal to be free from the worries of money. Being affluent will hopefully be the part of the result, but it is not the goal.

Some, if not all of you may enunciate that “money doesn’t buy happiness” and you would be right. But might it make the bad times easier? That is a tough one to answer. The sooner that I am in a hammock with a warm breeze on a weekday, the better. If I had a choice, I would much rather be rich than poor. And it is my choice.

Goals of Days Past

Goals in the past now seem much less vital and almost border on trivial in comparison to current goals. This is a life goal. It is a journey that cannot be completed in a day, unless you win a multi-state lottery. That would be much less fulfilling or life defining. Becoming a self-made individual is a trait that none can take away, except maybe the IRS.

In the past, some of my goals were items such as: running a marathon, graduating college, learning several languages, etc. Now, my family is worried that a single goal will make me unable to enjoy the finer things in life because I am so driven in saving and investing money.

Debt Freedom

I live like a poor college kid.  It sucks sometimes, but I never worry about whether I can pay a bill or not, and that is freedom.  Being debt free is a great goal to have, but it is not my goal.

Debt freedom means that you are not leveraging your money to the best of your ability.  Yes, it is the safest path, but the path that is safest is often the least amount of fun also.  The only debt I want, is the type of debt that makes me money.  Student loans and credit card debt do not make you money.  There is an exception to that.  If you have a student loan with a rate lower than the rate you can make through investments, then you should probably pay the minimum on the loan and invest as much as possible.  This is a high-level example, but it is the way that I try to think.

One of the weirder images to come into my head is Mel Gibson from Bravehart with the painted blue face screaming, “Debt Freedom!!!” Yeah, I am a dork, I know. My goal is not to be entirely debt free, but to use the debt in the most constructive way that produces income.

Current and Future

Real estate gurus always say, use other peoples’ money. Listen to them, but do not take it too far. If you get in over your head, it is an expensive proposition.  Being inside of your or my comfort zone does little good. If you are like me, I dislike treading out of it, but I push myself every day to increase my real estate knowledge. Reading a book or blog, even for just one article, is progress.

Have a goal that drives you, that makes it difficult to sleep you get so excited thinking about it.  It does not have to be real estate or rental properties, but that is mine.  At night, I can’t sleep sometimes, because I am thinking of new or different ways to do something.

This Blog

This blog is a goal of mine. Not only can I learn from it myself, but I can educate others and hopefully change their lives.  Money can be a taboo subject to some. That is an insane thought to me. Money underlines just about everything in this world, why would it be taboo? There have even been studies done that concluded that people are more attractive if they have money, which is also ridiculous.

My goal is to find someone who I can talk about money with who is much more successful than I, a mentor. In my networking circles, there aren’t many unfortunately. Therefore, I try to attend Real Estate Investor Association (REIA) meetings. Learning is a passion. The real estate investor who is the most knowledgeable, is usually the most profitable.

Goal: Know More Than The Other Guy

Know more than the other guy, that is my thought. There is a far less likelihood of you being taken advantage of, and people WILL try to take advantage. The more you know, the better deals you can create, and the better your return on investment.

The way that I calculate, I need to purchase a total of 8 four-family rental properties before I can quit my job and only focus on real estate. This does not mean that I neglect my professional improvement for my current job. The goal is that my regular job becomes a backup plan in the long run, but it needs to be fully formed in case I need it. Real estate and rental properties could blow up in my face. As much as I plan for that, life isn’t fair and having a backup isn’t a bad idea.

Becoming a Realtor

Secondly, since I plan to purchase more properties, it would make sense to become a realtor to save money when buying or selling.  Not only that, but I could transition into it if it really took off.  This could also be filed under the know more than the other guy goal.

Future thoughts give me several other ideas. When there is enough cash flow, I will start to buy distressed residential single or multifamily properties, fix, and either flip or refinance and add to my rental property portfolio. This may even happen with commercial rental real estate. The best returns are always in fixing the distressed properties, but it comes with added risks and required knowledge. This does not mean that you or I should not end up there, merely that a layer of caution must be added.

If, Elseif, Else...

Switching gears slightly to self-storage units. There is little overhead with these, but is a slightly different facet of real estate. is where you can find all kinds of commercial opportunities, not only rental property. Look at what is available and give yourself some ideas about future goals.

Overall, I absolutely do not want to work for the same company for 40 years like my grandparents, unless it is my company. My aspirations, my sweat, my life. Why would you want to submit to another company’s rules? Financial safety? That is a farce if you only have one stream of income. You can be let go tomorrow. Your money should make you money when you are sleeping. Only then can you have the freedom that people dream of. The freedom to go anywhere, at any time.

By Trey Stevens

Learn what I did wrong or right from My Journey in real estate and rental properties OR check out other articles on my Blog.

Posted by Trey Stevens in My Journey, 1 comment

Second Deal: My Journey in Rental Property and Real Estate Part 3

My Journey In Rental Properties and Real Estate Part 3 Second DealSaving Money Sucks

If you haven't read Part 2, read it here!

After finally saving up over $30k in approximately 18 months as a down payment, I took the leap and purchased second a four-family residential apartment building. Saving this amount of money was no small feat. It was absolutely the most arduous achievement I have ever been a part of and I have run a marathon before with virtually no training.  Saving money sucked worse than that.

Sacrifices were made. Mental anguish ran rampant. Forcing yourself to not go out to eat, ever, is just one of the numerous choices made. It was more of a trudge and a grind through a marsh, than a triumphant king returning to the castle type of event. Trumpets and coronets blaring, streamers billowing in the wind; drive that image of grandeur from your mind.

Imagine living with a parent again after having your own place.  Does it pain you to even think about?  Well, for me, that is what I had to do to save money.  Limiting yourself to not purchase anything, and I mean anything.  No new shoes or clothes, no vacations, no new vehicle.  As the eldest of all of my cousins on both sides, and I have over 10 cousins, every single one of them bought a vehicle before me.  In fact, I still haven’t, even after my second property purchase.

If you want to get to places where others aren't, you have to be willing to do things others aren't willing to do.

Financial Independence

The road to financial success, not just financial independence, is made with these types of choices. Read The Millionaire Next Door by Thomas J. Stanley. The book lends better perspectives toward who the affluent really are. They aren’t the people who drive luxury cars for the most part.

$30k was the largest sum of money I had ever had the privilege of seeing in my bank account and I put it all on the line to buy a second piece of real estate.

Looking For A Second Property Was A Pain

Looking for a second property was much tougher than 18 months before. All the properties I found that I liked, were under contract in less than 10 days. There were over 15 multifamily properties that I went and personally went inside with my realtor. Double or triple that 15 and that is the number of properties that I drove past without going inside. A year and a half before was much easier. At the time when I was looking for my second property, I had no knowledge that a company was buying up properties in my market area. This was found out later.

My process for finding new properties was that I would find them on and contact my realtor, which is weird, I know. He would schedule the showings and we would go walk through them. My first realtor had no knowledge of multifamily or rental properties and was generally not helpful.  DO NOT BE AFRAID TO MOVE ON!


The first realtor and I got along great and he was a nice guy, but he just wanted to be paid with little effort on his part. Once I got this through my thick skull, he was fired and I went searching for a new realtor.

A couple months later, I found a work friend of a relative, who was a realtor on the side. He was a night and day difference in helpfulness and knowledge from the previous realtor. When searching for the second property, there were several items I learned from him.

 Continued Learning

For example, a vast majority of property owners want 24 hours-notice before you can see it, so that they can give their tenants notice. Vacant units do not require this. This made it challenging to find the property listing early, schedule the showing, and make an offer on the property before other buyers. Finding the properties took some work, but beating the other offers to the punch was the hardest part.

After making offers on 8 different properties, I finally realized that getting the offer in before others was just about the most important part. It had a much higher chance of being accepted. This is not to say that any of the other offers were not accepted, because two were and just didn’t work out because of foundation issues that I did not spot before a home inspection.


Losing Out

More than 4 properties that I lost out on were because investors were making offers on the property sight unseen. My realtor told me this and it baffled me.

Why would anyone make an offer to buy a $100k+ property that they had never seen? Did people just have that much money lying around that they didn’t care about? Apparently, the answer to this was yes.

At this point in time, the search for the second property had been going for about 5 months with two accepted contract offers that eventually fell through, due to the properties failing the home inspections. They were both bad picks due to land grading issues and at the time I still not well versed enough on what to look for in a property.


Best and Worst Investments Made

The two failed home inspections were the best investments and the worst investments I made. On one hand, I paid them way too much money only to have to find another property. On the other hand, they saved the rest of my wallet.

More than that though, they encouraged me to follow them around and ask them questions about what they were looking for and why they were looking for it. Several months later, I can still tell you their names, Troy and Mike. Not only were they extremely nice about me playing 20 questions a million times over, they expanded on each and every one in the report. On my first inspection of the property, I should have made a list of questions and questionable items for the home inspectors to answer.

This was a knowledge breakthrough. I had never learned so much about properties and maintenance as I did when I followed them around the two failed inspections. What I thought was a waste of money at first, helped me in the long run more than I could have imagined.


Another Dumb Decision

Eventually, I became fed up with spending so much time trying to find the right property, only to have it pulled out from under my feet at the last minute when the seller informed me of them accepting another contract. This led me to make an insane decision.

I made an offer on a four-unit multifamily property without seeing the inside. Driving past the property twice was my only visual, but I had researched the property extensively. It was a four-unit building, each unit had one bedroom. It had a poured foundation that did not leak at all and was built in 1943. The real problem was that the rents were low, like $100 too low per apartment per month and one unit was vacant. The low rent could have made an extra $3600 per year, including the vacant unit’s rent.

Pretend either Harry of Lloyd were myself...

Second Property Info

The property was listed at $120k and had been on the market for less than two hours before I found it on It had replacement windows, an old water heater, and a pitched asphalt shingle roof. I thought it could easily be worth $125k-130k with no upgrades. The boiler was also newer and in great shape, but I only knew about the items on the outside and what the listing pictures showed on the inside.


Loan Process That I Forgot About

My realtor informed me of a loan officer who he had worked with in the past and I did not have anyone worthwhile at the time, so I contacted him. The loan officer got my pre-approval letter out to me. Once I had that, I could finally make an offer. My previous letter had expired because it had been longer than 90 days.


Accepted Contract

I offered $112,500, which was the same price as what I bought my first property for. The seller countered at $117,500 and we came to an agreement on $115k. This all happened within 3 days of it coming on the market. It had now been secured under contract and I was not getting my hopes up after the last couple debacles.

A home inspection was ordered and scheduled. This was not something required by the bank this time, because it was an investor loan at 25% down. I ordered it either way for the peace of mind and because of how much I learned on the last two.  

After spending three hours following the inspector around picking his brain, he said it passed his inspection and I started to become excited that this may actually become my second property.


Insurance Agent

Roll forward a month and closing is just a week or so away. I totally forgot to seek out an insurance agent. Once the bank contacted me about who I would chose, I kicked into high gear. My local real estate investment association had someone they used and I contacted them. She was extremely helpful and the quote was a low price, but high coverage.



The seller and I finally received our closing disclosures and were scheduled a closing time and date. Although, between the reception of the disclosure and the closing, the bank figured out that they had forgotten the tenants’ security deposits in the calculations. The seller was then informed to bring a check to closing for the difference. There were a few minor issues incorrect on the closing documents, but nothing to stop it. Two hours later, I was having a beer in celebration.

All the unknowns, the questions from the bank, and stress was suddenly gone. I was the proud owner of two multifamily apartment buildings. They were small, but they made money. Together, they now gross approximately $50k per year and net well over twice what the year over year average of the stock market, which is historically anywhere from 6-11%. Check out an IRR calculator or MIRR calculator for your own calculations.


Part 4 can be found here!


By Trey Stevens

Learn what I did wrong or right from My Journey in real estate and rental properties OR check out other articles on my Blog.

Posted by Trey Stevens in My Journey, 1 comment

My Journey in Rental Property and Real Estate Part 2: What I Wanted in My Second Rental Property

What I wanted in my second rental property

After my first rental property deal, I finally somewhat understood what other people meant when they said owning real estate and rental property were arduous endeavors. It seemed like everything that could have gone wrong, did go wrong with the first deal. In any case, the deal went through and I did my best to learn from it.


The Second Rental Property Is The Most Difficult

The second rental property will be the most difficult from a purchase stand point, unless you buy it after you have had your first rental property for more than two years. This is because most banks will count the first mortgage against you on your debt-to-income ratio and not count the income until you have proved it for two years on your tax returns. In my experience, I have had better luck with smaller banks in bending this rule.



About 18 months after the purchase of the first rental property, I started getting near my savings goal for the down payment on a second property, in which I needed 20-25 percent. This meant saving over $30k. This took all the fiber in my being to save that much that fast. I drove a rusted out, 16-year-old, small truck with over 215k miles and lived with a parent much longer than I wanted to in order to save.

Anything to reduce my expenses. My parents definitely helped me save this fast, by allowing me to live cheaply. I even moved out of my building after a year in order to get a new tenant in there making me money.



Good To Haves

In my next property, I sought cash flow.  This is not to say that I did not seek this on my first property, but I had a much better idea of what made me money and what didn’t.  On my checklist of good to haves: good location, solid foundation (poured foundation was a plus, over blocked), long-term tenants, possible sweat equity, tenant paid utilities, newer windows, brick building, pitched roof (not a fan of flat roofs), no fireplaces (tenants starting fires? Yeah, great idea…), a four-unit building, and the appearance of being well cared for.

Items that I considered as negatives were: crime ridden neighborhood, any foundation issues, roof leaks, other water leaks, signs of current or previous termites, and signs of current or previous mold.  These are my opinions, and you may disagree with them.  That is welcomed.  I am eager for you to let me know why, in either the comments or in an email.  I just ask that you disagree constructively.  


Four Is Best

Personally, having four tenants is safer investment when just starting out than having less tenants, such as in a duplex or single family home.  My thought process is that if you were to lose a tenant in a four-unit multifamily, you still have 75% of your income versus 50% or 0% with a duplex or single family home.  This is an opinion, but it has proved valid so far.

Personally, having four tenants is safer investment when just starting out than having less tenants, such as in a duplex or single family home.  My thought process is that if you were to lose a tenant in a four-unit multifamily, you still have 75% of your income versus 50% or 0% with a duplex or single family home.  This is an opinion, but it has proved valid so far.

Not only that, in my market area, four unit buildings are just about the same price as duplexes or triplexes.  This is not to say that if you find a great deal on a duplex or triplex, you shouldn’t take it, because you should.  In fact, I almost bought both a duplex and triplex before I finally bought a second four family.


Deferred Maintenance

The more deferred maintenance costs that you have, if you are just starting, will stifle your growth in the long run. This is not to say that you can’t be clever and leverage your money and property well. One of the items that I will most likely do later on is buy and fix distressed rental properties, put tenants in them and either sell it or do a cash out refinance for the after repaired value.

Both options have the same goal in mind, to have as little of your money invested in the property as possible. By maximizing the number of properties you can buy with your money, it increases your potential profit.



Goals are your motivation when buying properties.  Is your goal to have a couple? Or to have thousands?  This is something only you can decide.  Mine is to have enough of them to do whatever I want, whenever I want.  At this point, this can mean several things.  

It could mean retiring early, or it could mean working as a contractor in my current profession, cybersecurity.  All I know, is that I want to have the freedom to choose.  The tangible goal is to add four zeros to my net worth, hence the website name, Plus Four Zeros.

No matter your goal, the faster you are able to make it happen, the better.  Choose your second property well and do not feel like you have to rush. Being hasty and emotional will lead you to make bad decisions and lose money, unless you are extremely lucky.  Knowing all the details about a particular property takes time.  It is a competition though.  

Other buyers and investors are out there looking at the same properties at the same times trying to get the best deal.  They may find, view, and make an offer on a property before you, but that does not mean that it is a good property.


No Warzones!

I wanted a property that I knew could make money no matter what market. That means choosing a place that I could see myself living. I sought a four family that was on a street with single family homes, in a low crime area. Property managers will not manage rental properties if it is in a bad area sometimes. There are exceptions. Something else to think about is that the worse area you buy in, the worse tenants you may also acquire, and the harder it will be to sell.


Good Tenants Are Worth It

Good tenants are worth their weight in gold. Tenants that have solid jobs, all their teeth, and a clean background are difficult to come by if you are buying in certain areas or your rent is at a certain price point. I knew of another landlord who had a 33-unit building, which was three stories tall. A tenant was being evicted and extremely disliked their property manager.

They bought and poured gravel down a three-story stovepipe. It cost the owner something to the effect of $8000 to fix. Long-term tenants are typically more content where they live currently and so long as you do not upset the apple cart, they will hopefully continue that way.


Is It Well Cared For Currently?

The last item that I look for in a building is the way it is currently being cared for. Is the yard edged? Are there any bushes? If so, are they trimmed or overgrown? Are the common areas clean? Are the outside drains clogged or the handrails loose? Is the boiler ever serviced? Some owners just do not take care of their properties. This is similar to looking for a used car. Did the previous owner change the oil at the required intervals? Does the engine make any weird noises?

This is not a difficult concept and it is something everyone knows when they see it. The goal of this item is to learn about if you may have future issues before you buy. If the property does not appear to be well taken care of, this is not a deal breaker. Planning a small cash buffer can help if it may need a little maintenance right after you buy.

Overall, all of us are eager to own profitable rental property and real estate. These are just a few of the items that I personally sought when purchasing my second property. You may have more experience in dealing with mold or termites and may completely disagree with what I am advocating.

Please let me know if you agree or disagree in the comments or via We can all learn if you do. Thanks for reading and I hope you found this valuable.


Part 3 can be found here!

Check out My Journey or my Blog for more articles!

By Trey Stevens

Posted by Trey Stevens in My Journey, 1 comment

My Journey in Rental Property and Real Estate Part 1: My First Deal

High Rise Rental Property

On the last day of 2015, I bought my first rental property, a four-unit building. All units were one bedroom units and had three long-term tenants. It was built in 1937 and was not in perfect shape. In all, I bought it for $112,500, and it was probably worth about ten thousand more than I paid for it right off the bat. It was listed for $125K, but had been listed for about 14 months. The rental property had been shown to prospective buyers at least 15 times. So why did no one buy it before me? Was it a bad deal?

No, in fact, it was a pretty good deal that grossed over $2,000 per month. The problem was that the owner at the time, was an out of state owner and he had a tenant showing the property. This tenant was the one that was tasked with “taking care” of the property (cutting grass, cleaning the hallways, replacing light bulbs, etc.). We will call the tenant John. John paid no rent to the owner, in exchange for his maintenance.

Tenant Sabotage

So, John was trying to convince every buyer to keep him employed and keep his rent low. Every owner fled as fast as possible because John was so overbearing. They wanted nothing to do with a long-term tenant who was not as knowledgeable about property maintenance as he wanted to make himself out to be.

He used extension cords as permanent wiring solutions for light bulbs, as an example. This has since been fixed. John did not scare me away when touring the rental property, mostly because of ignorance. Hindsight is 20/20 and at that point in time, I did not have it. Little did I know he would end up suing me.  I won, open and shut.

The unit that John the tenant resided in was not the first property I looked into buying. I looked at a few others before deciding, but I wanted the property so badly that I was blinded. My father was a pilot in the Marine Corp and flew helicopters. Throughout my childhood, I would hear the term target fixation. Target fixation is when a pilot was looking at something so intensely that he or she would crash into something else, like the ground or a mountain. That is what I had, target fixation. Blinded by the Benjamins.

Bad Decisions Continued...

My realtor gave me the number of a mortgage broker and little did I know that it would be a bad decision. After contacting the mortgage broker, he quickly sent me a pre-approval letter and I was only approved for $115K. I had been looking at properties in the $130K-$140K range. What a blow that was to hear. Therefore, I made an offer on the property for $112,500 and lucky for me, the seller accepted it the first time.

Not Expecting

I started the loan process in August and it took four, long, stressful months before it closed. First, I was going to use a conventional owner occupied loan at the 5% rate, but then I accidentally missed a credit card payment the same month, which was a rookie mistake.

I never miss a payment on anything, but did it at the exact wrong time and at the time, there was only about $50 dollars total on the credit card. Boy, did I feel dumb. That 50 bucks that was late cost me a pretty penny in the long run. Somehow the mortgage broker was still able to allow me to use an FHA owner occupied loan for 3.5% down. Both loans required that I live there for a year.

The loan process was demanding. It was something that I was not expecting at all. I thought the hardest part about buying a property at the time was finding it and getting it under contract. Everything that could have gone wrong with the loan did.

First, I met with the mortgage broker and he was extremely helpful. I had heard that he was one of the best from no less than three people. When I went to meet with him the second time at his office, it was about 5 pm late in the week. I was informed by the secretary that he did not work there any longer. WHAT?!


No idea

He did not call, text, or email me to let me know. I had absolutely no idea. We had met only one week earlier. How was I going to stay within the contract dates for buying the rental property now? Even the secretary at his former employer said he was one of the best. So, when he finally called me and apologized, he said he could still get the loan completed at his new bank. My ignorant self said, “OK.” Again, hindsight is 20/20. Three plus months later, and several contract extensions later with the frustrated seller, we finally closed.

As much as I disliked the mortgage broker for his inadequacies, he did get the deal closed. It wasn’t exactly how I would have pictured it, but I was ecstatic to be a property owner. When you make $30k a year at your regular job and acquire a property that grosses $24k a year, you tend to care less how it gets done, so long as it happens. Now, even though I was the property owner and lived there, I used a property manager.


No Time To Manage a Rental Property!

I had no time to manage a property. I worked full-time and went to college full-time. It was exhausting. The last thing that I needed was to have tenants calling me about fixing problems at all times of the night. Having two full-time commitments meant that I was not in my apartment much.  It is crazy to say, but I had no idea that the fire department had come out twice to my building in a week span about a tenant smelling gas.

This happened about 6 months into my ownership of the rental property. My tenants and I did not talk much, as they were middle aged women and I was a young male. We just didn’t have much in common. The occasional hello or goodbye was it. My property manager did not inform me and I never smelled any gas in my apartment.

The gas and electric company finally called me to tell me that they were going to shut off my gas and that I would have to get a pressure test on all gas lines before they would turn it back on. The property manager’s negligence could have killed three others and myself. Oh, and during this time, the tenants do not have hot water or gas to cook with their stove. So much for paying a property manager to do the work...



Fortunately, a friend's dad was a licensed plumber. There were five gas lines in the building and I had to get them all tested and fixed if necessary. If I had called anyone else, it would have been at least $4,000 with all the items that he had to fix. My price was only $2,500. That virtually eliminated my profit from the first 6 months.

After firing the property manager, I took the phone calls from tenants for a month or so before I found another property manager. It wasn’t too bad, but it was definitely something that I did not want to do long term. More mistakes were made along the way, but they were smaller mistakes that we will save for another time.


Do Not Buy Emotionally!

Overall, you can save yourself tons of headaches by planning ahead and not getting emotional about a buying decision. My property manager used to be a good friend. I had no idea in a million years that he would neglect the safety of myself and others. Not only that, but he swindled and stole several hundred dollars from me over the course of his time as the property manager. I consider myself to be a somewhat intelligent individual, but the only thing that anyone can do is to move forward. Rental property is not for the faint of heart. It is a pain in the ass, but it is a lucrative pain in the ass.


Part II can be found here


By Trey Stevens

Learn what I did wrong or right from My Journey in real estate and rental properties OR check out other articles on my Blog.

Posted by Trey Stevens in My Journey, 0 comments