081: Leaving the Corporate World thanks to Rental Properties with Mark Walker
Mark Walker was introduced to rental properties after reading Rich Dad, Poor Dad. The book showed him a better way to build wealth besides working for someone else and earning a salary. Within a year Mark had bought his first rental property. Mark did not quit his job after buying a rental or two, it took him ten years longer before he felt comfortable leaving the corporate world and going out on his own. Mark bought numerous rentals in the Colorado market and has since bought multifamily properties in the Texas market. We talk all about it on this episode of the InvestFourMore Real Estate Podcast.
How did Mark get started buying rental properties?
Mark Walker in the Tech industry for many years, but knew he was building wealth like he though he should be. After reading Rich Dad, Poor Dad and learning the advantages of owning your business, Mark knew he had to change the way he did things. One of the easiest businesses to start is buying rental properties, so that is what Mark did. He bought a duplex in Denver that made him over a 30 percent cash on cash return on his money! Even though Mark loved the returns he was getting, he decided to 1031 exchange the rental into a new project. However, his new project did not pan out and he did not complete a 1031 exchange. The housing crisis hit Colorado and Mark sat on the sidelines until 2010 as far as real estate is concerned.
How did Mark build a portfolio that allowed him to quit his job?
In 2012 Mark partnered with a real estate investor who was scraping properties and building new duplexes. He liked the projects, but they were taking 16 months the complete! In 2011 he started to buy single family rentals with a goal of making 20 percent cash on cash returns, much like myself. In 2013 Mark bought a 12 unit multifamily property in Denver and in 2015 he had enough properties and cash flow to quit his job and become a full-time real estate investor.
Why did Mark begin to invest in Texas real estate?
The real estate market in Colorado has been crazy the last few years. Prices have doubled in many areas, but rents have not come close to keeping pace. Because prices are so much higher than rents, it makes it tough to cash flow in the area. I stopped buying rental properties in 2015 and so did Mark. Mark did not give up on buying rentals, instead he changed his strategy. He had a cousin who invested in large multifamily rentals in Texas, and Mark decided he would learn from him.
Mark ended up buying a 64 unit property in Texas, which has been doing very well for him. He implemented the strategy of finding a mismanaged property, using other investors to help him fund the deal, and raising rents to increase the value and cash flow. Mark loves to talk about what he has learned in the multifamily sector, which he says is an entirely different animal from single family rentals. Mark create a book to help people learn how to boos the cash flow from their properties here.