Paycheck to Paycheck in His 40s, Millionaire in His 50s with “Boring” Rentals

At age 47, Neil Whitney and his wife were living paycheck to paycheck—one bad day away from losing everything. Now, less than ten years later, he’s financially free with $8,000/month in passive income from rentals. Neil started with almost no money, promising his wife he would keep their life savings untouched while investing. He picked up side gigs, drove for Uber for a year and a half, and saved anything he could to buy a rental. And once he got his first rent check, everything changed for Neil and his family. Neil is now a millionaire in his 50s, thanks to “boring rentals,” all in affordable price ranges ($200K or under homes!). Once paid off, his rental portfolio will make him over $20,000 per month. In his own words, “If I can do this, anyone can do this.” Today, he shares the steps he took, how he finds the best tenants, and how to use rentals to fund the dream life you’ve always wanted (new cars, overseas trips, and more). So if you’re in your 40s, 50s, or 60s and thinking it’s too late for you to turn your life around and get to financial freedom, Neil is ready to prove you wrong. In This Episode We Cover How to buy your first rental property even if you’re living paycheck to paycheck Are $200K houses really worth it? Neil says “yes!” and explains why lower-income tenants should not scare you The one side hustle that helped Neil save over $15,000 for real estate investing Using home equity to invest and build a real estate portfolio faster Want a new car? A nice vacation? How to have rentals pay for all of it The best piece of advice for new investors and those wanting to build financial freedom And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1231 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Henry Washington?

  At age 47, Neil Whitney and his wife were living paycheck to paycheck and they were one bad day away from losing everything, which he found out after watching a Lifetime movie. Now, less than a decade later, he's financially free with $8,000 a month of passive income from his rental properties. Neil started investing with no money. He drove Uber for a year and a half just to save up the down payment and he promised his wife he'd never touch their bank account. Through acquiring boring rental properties, Neil is now a millionaire in his 50s with generational wealth for his children. Once his rentals are paid off, his rental portfolio will make him over $20,000 a month. In his own words, "If I can do this, you can do this too." So if you're in your 40s, 50s, or 60s and thinking it's

• 0:42Henry Washington?

  too late for you to turn your life around and get financial freedom from real estate, Neil is here to prove you wrong.

• 0:53Henry Washington?

  What's up everybody? I am Henry Washington, co-host of the BiggerPockets Podcast. Today, we've got an investor story with Neil Whitney from Pikiune, Mississippi. In less than 10 years, Neil went from living paycheck to paycheck to sitting on the beach and watching passive income roll into his bank account. Literally, he did this. So let's hear about it. Neil, welcome to the show.

• 1:12Speaker 01

  Thank you. Appreciate you and super excited to be here.

• 1:16Henry Washington?

  Yeah, man. We're glad you're here and you've got a pretty interesting story. So I'm excited to dive into it a little bit here. So why don't you start at the beginning? Tell us about your background and what got you interested in this real estate gig?

• 1:26Speaker 01

  So, real estate kinda came as an accident. Funny how it all started. I was at home on a crappy rainy weekend. My wife was bugging me to come watch a movie in the back. She's like, "Hey, will you come watch this movie with me?" And I'm like, "Uh, yeah, I guess so." You know, wasn't super excited about it. And so we went in the back and watched one of these Lifetime movies that, you know, this guy, he's driving home from work and he gets creamed by a dump truck.

• 1:53Henry Washington?

  Oh, man.

• 1:53Speaker 01

  And got really, really messed up. And, you know, he ended up, he lost his job. They ended up losing their house. So him and his wife and the kids are all living in this minivan underneath the bridge. And finally, the church comes in and helps them out and, you know, gets them kinda sorta back on their feet. And she's like, "Wasn't that movie great?" And I'm like, "Are you kidding me? That movie just scared the crap out of me." And she's like, "Well, what do you mean?" I'm like, "I'm one car accident away from being that guy." Right? So I don't, I didn't know what to do and I'm a big believer in law of attraction. That Monday I go into work and my boss walks in and he hands me Rich Dad Poor Dad and he says, you should read this book.

• 2:36Speaker 01

  Swear to you, right? And so I read Rich Dad Poor Dad and the light bulb came on. I was like, okay, so I need to figure out how to get into real estate, but you know, we were living paycheck to paycheck. We didn't, you know, we had no money. And so I told my wife, I says, hey, we need to get into this whole real estate thing. And she's like, there's no way. I says, I'm gonna figure out a way. She says, okay, I'm gonna support you on one condition. I says, all right, what is that? She says, you can't touch our bank account. All right.

• 3:07Henry Washington?

  Fair enough. Okay.

• 3:08Speaker 01

  We'll figure that out, right? And so we went down to a Broadway show and we were watching a Broadway show and we ended up taking an Uber. And I started talking to the Uber driver and the light bulb came on again. I said, oh, okay. So wait a minute, I can start Ubering, make a little side hustle money, and then use that to get my first property. And so I signed up for Uber, started driving Uber. I hustled every Friday, Saturday and Sunday, every day off that I could.

• 3:35Henry Washington?

  Before you get too far in, there's so much good stuff here. Hey, it's very similar, very similar to like how I got started. I had an epiphany in the middle of the night and then woke up and was like, I gotta figure this out. Went to meet somebody who I knew was a commercial broker and she basically handed me a box of books and Rich Dad Poor Dad was in the box and that's the one I picked randomly. So very, very similar.

• 3:55Speaker 01

  Crazy.

• 3:56Henry Washington?

  Changed my life, uh, obviously, but I think there's some things I want to make sure that people understand.

• 4:02Speaker 01

  Roger.

• 4:02Henry Washington?

  You had a full-time gig, saw a Lifetime movie that scared the pants off of you. You're like, I need to be more financially secure. Told your wife, you're gonna do real estate. She said, great, you can't touch our money. So you said, I need to make some money in order to help me. Be able to afford the down payment for the first property. So the first question I want to ask is, how old were you at this time?

• 4:25Speaker 01

  Oh, I was late forty, forty seven.

• 4:28Henry Washington?

  You were forty seven and decided, let's do this real estate thing.

• 4:32Speaker 01

  Riser, yeah.

• 4:33Henry Washington?

  And, and then decided, let me pick up a side hustle driving Uber.

• 4:37Speaker 01

  Yeah.

• 4:37Henry Washington?

  So how many hours did you drive a week and how much money were you trying to save up?

• 4:42Speaker 01

  I didn't know how much money I was gonna need at the time, right? This was all new to me. I, I started listening to BiggerPockets. I had found BiggerPockets at the time.

• 4:50Henry Washington?

  What year was this?

• 4:51Speaker 01

  Uh, twenty seventeen.

• 4:53Henry Washington?

  Okay.

• 4:53Speaker 01

  I started listening to BiggerPockets and hearing, you know, how everyone was, was getting involved with real estate and just picking up little tidbits here and there on random podcasts. I would drive Friday night till I got tired. On Saturday, there, near my house where I lived in, in Slade, Louisiana, there's a swamp tour that comes in every day at eleven o'clock. And I said, if I go meet that swamp tour as they come in, there's bound to be somebody that needs a ride back into the city.

• 5:19Henry Washington?

  Yeah.

• 5:19Speaker 01

  Right? So that's about a forty minute ride and, and I figured I'd make a quick fifty, seventy five dollars on, on a ride into the city. And I clockwork, at eleven o'clock, that tour would come in, I'd get a ride and I'd go back into the city and then I'd drive till I got tired again. And then Sundays, I would get up at like three in the morning and I would go sit down in the French Quarter at the hotels. And I would be picking up airport runs. Everyone's going to the airport to leave on Sunday mornings. And running back and forth between the airport and the city, airport and the city, airport and the city. So that was my thing. Friday, Saturday, Sunday. I did that pretty much every weekend, every free moment that I had, I devoted to, to Uber to get that first down payment. I think about eighteen months in, right?

• 6:04Speaker 01

  I had saved enough for my first house and I found a cheap little house in Pearl River, Louisiana for seventy thousand.

• 6:11Henry Washington?

  Okay.

• 6:12Speaker 01

  And I had fourteen thousand to put down, plus a little closing money. So it was roughly about sixteen, seventeen thousand I think I had to come up with.

• 6:19Henry Washington?

  Okay.

• 6:20Speaker 01

  And we bought our first property.

• 6:22Henry Washington?

  So you bought a single family home, first property, seventy thousand dollars.

• 6:26Speaker 01

  Yeah, a little nine hundred square foot, two bedroom house.

• 6:29Henry Washington?

  Did it need work?

• 6:30Speaker 01

  It really didn't. It was, it was super, super nice. Uh, the, the lady that I bought it from had really done everything already to it. So she put in all new tile floors and, uh, crown molding, had it painted. It was super cute. I mean, like I said, super small, but super cute. And it was an easy rent, right? So we we rented it out and I think we made, I don't know, maybe a hundred, hundred and twenty five dollars a month on it. You know, but we thought this is great, right?

• 6:58Henry Washington?

  Yeah.

• 6:58Speaker 01

  We got an extra hundred dollars a month.

• 7:00Henry Washington?

  You paid seventy. You didn't have to put any money into it and you rented it out for how much?

• 7:04Speaker 01

  I want to say at that time, it was probably about seven fifty, eight hundred a month, right around the one percent.

• 7:10Henry Washington?

  I assume you used a conventional loan?

• 7:12Speaker 01

  We use conventional. Everything I've ever bought has been conventional.

• 7:16Henry Washington?

  Conventional loan, twenty percent down.

• 7:18Speaker 01

  Yeah.

• 7:19Henry Washington?

  And how did it perform? Did it stay rented?

• 7:22Speaker 01

  It did. Yeah, I still want it to this day. Haven't sold anything.

• 7:25Henry Washington?

  I love it. I love it. Well, it sounds simple when you hear your story, but it really isn't that complicated. You needed to find a deal that worked. You did live in a market where you could find deals that work in your market. That's something that works in your favor. Not everybody's in that position. I understand that. But you put in the work. You put in extra hours to generate income to get yourself to a point where you are financially ready and able to purchase a property.

• 7:54Speaker 01

  Yeah, because bear in mind, we were paycheck to paycheck. Like, we didn't have extra money whatsoever. And so that's why she's like, you can't touch the bank account. And so by by taking that Uber hustle money and putting that aside and any little side job or whatever I would do, I'm in the HVAC business, right? So any little side thing I would find, I would take that money, I would buy the pigeonhole all that money away. And and eventually we got to a point that we could buy one.

• 8:19Henry Washington?

  Well, Neil, I am thoroughly impressed with the story thus far, and I definitely want to jump into what you did from here and how you bought that next property. But first, we got to take a quick break.

• 8:31Dave Meyer?

  Most investors only think about insurance when something goes wrong. A tenant injury, storm damage, loss of rent. Then suddenly, the cheapest policy doesn't feel like the best one anymore. That's why a lot of BiggerPockets investors use steadily for landlord insurance designed specifically for rental properties. Whether you own one property or a growing portfolio, they make it simple to get covered properly. And BiggerPockets Pro members Get an extra 5% off their landlord insurance premiums. Visit biggerpockets.com/landlordinsurance to get a quote today.

• 9:04Henry Washington?

  Quick word about a new pro perk you'll want to know about. Aven. If you're a homeowner, there's a good chance you're sitting on equity that you're not using. The problem is tapping into that usually means a cash out refi, a traditional second mortgage, or weeks of paperwork just to get approved. Aven built something different. It's a credit card, but it's backed by your home equity. So you get a lot of the rate benefits of a HELOC with the flexibility of a card you can use anywhere. Rates are typically well below a standard credit card. Approval is fast and mostly online, and you can use it for anything. A renovation, paying down high interest debt, or just have more breathing room in your budget. And if you're a BiggerPockets Pro member, there's an extra reason to check it out.

• 9:44Henry Washington?

  Get approved for the Aven card and you'll get a $400 statement credit after spending $400 on your Aven card. Enough to cover your entire annual Pro membership. Head over to aven.com/biggerpockets to see if you qualify. Aven Financial, NMLS #2042345. Cards issued per 20 license from Visa USA, Inc. by Coastal Community Bank. NMLS #462289. Member FDIC. Equal housing lender. Subject to approval. Terms apply. Visit aven.com for details. Here's a strategy that most W2 employees have never heard of. Normally, if you want to write off a rental property against your regular income, you need real estate professional status. That means tracking hundreds of hours a year. Rent to Retirement just launched a program that skips all of that. It's called the STR loophole tenant placement program. Here's how it works.

• 10:29Henry Washington?

  You buy one of Rent to Retirement's Class A new construction investment properties. You set up an Airbnb listing and self-manage it for the remainder of the year. Rent to Retirement then rents the home as a short-term rental to establish it as an STR for the year. No furnishing required, making this the easy button to save five or six figures in taxes this year. And because you're the sole manager, there's no hourly minimum to meet. That lets you use a cost segregation study to accelerate the depreciation and potentially write off over $100,000 against your income, even on your first rental. Add in cash back up to 13%. Of the home price, which exceeds $60,000 on some properties.

• 11:10Henry Washington?

  With this massive cash back incentives, investors are seeing total returns up to 126%. New construction, A-class properties and inventory is limited. Learn more at biggerpockets.com/retirement or text REI to 33777. Again, text REI to 33777.

• 11:32Speaker 03

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• 12:00Henry Washington?

  Welcome back to the BiggerPockets Podcast. I'm here with Neil Whitney and we're diving into his second real estate deal.

• 12:06Speaker 01

  The second deal was kind of crazy. It was, I found out about equity, right? And I had built a lot of equity in my home I was living in. And we took a HELOC out on the house to purchase our next property, which I found a fourplex that was available. And, uh, you know, I had the equity in the house, so I pulled it out. I bought that fourplex. And, um, so we did touch the, the money there. However, the, the fourplex was such a good deal for us that, you know, we were seeing significant cash flow, like over a thousand a month on. And so we were able to pay back that HELOC really, really quickly.

• 12:46Henry Washington?

  Let's talk about that for a second because I think a lot of people have thought about this as a plan or a strategy. Uh, but since you executed it, let's kind of dive into what that looked like. So you took out a HELOC and for those listening, that's a home equity line of credit. So you tapped into the equity in your personal home. And when you do that, the bank gives you access to your available equity somewhere to the tune of between 75 and 80% of the equity they'll give you access to. And you said you found a fourplex. Is this another one that was listed on the market?

• 13:16Speaker 01

  Um, yeah, on the MOS.

• 13:17Henry Washington?

  What was the purchase price?

• 13:19Speaker 01

  A 312.

• 13:20Henry Washington?

  So purchase price 312,000. You purchased it on a conventional loan, which means you had to put 25% down, as you said. So that's about $78,000. Is that the money that you pulled from the line of credit?

• 13:31Speaker 01

  Yes.

• 13:32Henry Washington?

  I assume you had closing costs and some other things. And so the line of credit was used for the closing costs. How did you, did the property need work?

• 13:39Speaker 01

  No.

• 13:39Henry Washington?

  So these were turnkey.

• 13:41Speaker 01

  Yeah. So we did do eventually some work on them as people vacated, right? We would, we would remodel and then raise the rents, but as they sat, they were all fully rented.

• 13:51Henry Washington?

  What were the rents when you bought them?

• 13:52Speaker 01

  Six fifty, I want to say.

• 13:54Henry Washington?

  Six fifty a unit. So it was bringing in about twenty six hundred dollars as it sat. And so you just kept it rented.

• 14:02Speaker 01

  Yeah.

• 14:02Henry Washington?

  And then did renovations as tenants moved out.

• 14:06Speaker 01

  Yeah. As the tenants moved out, we went ahead and, and basically, you know, it just went from crappy countertops, pull those out. We did, on, on two of them, we had to pull the entire cabinets out because they were just complete garbage.

• 14:19Henry Washington?

  Yep.

• 14:20Speaker 01

  And we put new cabinet, cabinetry in, new toilets, new, new, new bathroom vanities, you know, but then we went from, you know, six hundred dollars a month rent to a thousand dollars a month rent.

• 14:32Henry Washington?

  Awesome. So is that what everything's rented for now? A thousand per unit?

• 14:35Speaker 01

  Yeah.

• 14:35Henry Washington?

  Four thousand dollars a month on this quadplex that you bought on the market using a conventional loan. I like to call this old boring real estate.

• 14:45Speaker 01

  Yeah, I'm boring as it gets.

• 14:46Henry Washington?

  It's just old boring tried and true real estate. Find a deal that makes sense. Buy it on a conventional loan. If you don't have the money, save it up till you get it. Fix it up as you go. Rent it out. This is, this is old boring real estate works.

• 15:01Speaker 01

  It works awesome.

• 15:03Henry Washington?

  I think everybody's kind of, uh, you know, people are always looking for what's the next fad, next big thing, you know, creative finance, rent by the room, Airbnb, midterm rentals, but old boring real estate still works, guys.

• 15:17Speaker 01

  My wife and I started making a game, right? Again, go, let's go back to rich dad, poor dad, right? An asset versus a liability. And my wife, you know, we started making a little bit of money and, and she's like, okay, so I want a Jeep. I says, okay, we're not going to just go out and buy a Jeep. We've got to go out and buy a duplex to pay for that Jeep. And so that's what we did. We went out and we bought a duplex and that duplex pays for our Jeep. And that Jeep. Long been paid for, but the duplex doesn't stop paying us, right? It it just keeps coming and God forbid she wants another Jeep or whatever. Well,

• 15:54Speaker 01

  you know how it works, right? And so we've, we've played this little game and, and you know, we were in Mexico. I don't, Jesus, this must've been eight, nine years ago when she really, it really clicked for her. We're sitting on the beach and her phone's going bling, bling, bling. She's getting all these text messages and I'm like, who the hell keeps texting you all these texts? She's like, I don't know. And she drives her phone and she looks at me and she says, I get the real estate thing now. We're getting deposits in the bank while we're laying on the beach in Mexico. And that was her aha moment, right? That's when she figured it out like this works, you know? And at that point, we, we had accumulated a few properties. So, you know, currently we're, we're up to, we have two fourplexes, six duplexes and three single family houses.

• 16:37Speaker 01

  23 doors in total, cash flow is right about $8,000 a month.

• 16:42Henry Washington?

  That's amazing. And you found all of these on market listed properties?

• 16:46Speaker 01

  Every single one.

• 16:47Henry Washington?

  And when's the last time you bought a property?

• 16:49Speaker 01

  I bought four duplexes at once, October of 23.

• 16:53Henry Washington?

  I think that's where a lot of people kind of get stuck is after that second or third deal. People's try to figure out, all right, well, how do I scale this thing?

• 17:01Speaker 01

  One at a time.

• 17:03Henry Washington?

  Absolutely. One at a time.

• 17:05Speaker 01

  One at a time.

• 17:06Henry Washington?

  Save up enough money.

• 17:07Speaker 01

  That's right.

• 17:08Henry Washington?

  And what I like about the strategy that you said, that you've talked about, it seems like you've done the right thing by the income that you have coming in. Cause I feel like people start, they buy rental property, it starts to cash flow. And then the cash flow just kind of disappears because it gets mixed in with all of the other lifestyle creep expenses. It's just kind of, it comes and it goes. And you were, it sounds like you and your wife are very intentional about having the money go to a certain account. And so that you could. Save up a certain amount in that account and then you could go and do something with that cash flow. We do something very similar is we have an expense account. So I set up auto drafts for all the expenses in my account. All that goes into an expense account. That

• 17:49Henry Washington?

  way, if and when a problem arises, the money comes from the expense account and it doesn't feel like such a burden financially. And it's just that having those fundamentals when you're investing, tracking the money, making sure it goes into the appropriate accounts, and then making sure you've got enough allocated, saving up till you get to $20,000. Cause I would say, we did something very similar. So for us, I wanted to save up a little over what it would cost to fix probably the most expensive thing that would happen on a house.

• 18:17Speaker 01

  That was my exact thinking. A roof.

• 18:19Henry Washington?

  A roof, a roof. Absolutely. I need to save up at least 15 to 20 grand. That way, if I have to replace a roof, I can replace a roof. And then anything above that, depending on how many properties we have, we would take out. And so that number goes up, the more properties we have. And all of these things that we're talking about in this episode, and I hope people are taking notes, these are just fundamentals of real estate. And it sounds simple when you hear us talking about it, but the fundamentals will keep you afloat. The fundamentals will build wealth for you over time. It doesn't sound sexy. It doesn't look sensy. It's not over complicated, but the fundamentals will keep you wealthy. Saving up enough until you can afford the down payment, buying the property, renovating

• 19:03Henry Washington?

  it when the right time comes, making sure you're keeping up with rent raises, making sure that you're allocating your funds appropriately, and then buying assets and using the cash flow to pay for the, for the debt that you're bringing in because of the asset. Like this is really a lesson in real estate 101. And you did this starting at 47 years old. So I don't want to hear any excuses from anybody about you don't have time because you had a full-time gig and you were married, about that you don't have money because you hustled and drove Uber to save up enough money, and that you can't do it at your age. You let none of that hold you back. I think that's really incredible.

• 19:38Speaker 01

  It's been a fun journey. And, and to be honest with you, anybody can do it. If I can do this, anybody can do this. I'm not the sharpest tool in the shed. No one's gonna out hustle me. I'm gonna go out, I'm gonna do what I need to do to get it done. This is generational for me. I did this not just for my wife and I, but we got kids, right? And now my kids, you know, my son's heavily involved. He's, he's cutting all the grass and all the properties. Uh, he's getting ready now to, to uh, either buy or build a new, new duplex for himself. So he's gonna live on one half. He's gonna house hack and rent the other half out.

• 20:12Henry Washington?

  Attaboy.

• 20:13Speaker 01

  He, he's on it. You know what I mean? He's 21 years old and, and he, he's, he's on a mission and, and he wants to, so to speak, follow in our footsteps. All those properties are for them. You know, they're, they're gonna inherit these. This is gonna be generational wealth. I told them, we don't ever sell properties.

• 20:27Henry Washington?

  How would you say you've managed risk as you've grown your portfolio? Because a lot of people feel like if I'm doing this and uh, I'm later in life, then I need to take on less risk. How have you managed risk?

• 20:44Speaker 01

  I'm looking at this as my retirement plan, right? I'm, I'm investing all of my dollars, if you will, instead of into a, a 401k, which I still do a little bit into a 401k. But instead of into a 401k, I'm investing into tangible assets. Here's the thing with real estate that a lot of people miss. If I wanted, if I had a hundred thousand dollars, right? And I wanted to buy gold, I'm gonna get a hundred thousand dollars worth of gold. If I wanted to buy silver, I'm gonna get a hundred thousand dollars worth of silver. Stocks, bonds, you name it. It's a hundred, one to one. But if I have a hundred thousand dollars in real estate, what can I do with that, Henry?

• 21:21Henry Washington?

  You can buy a lot more than a hundred thousand dollars of value.

• 21:23Speaker 01

  I could, I can buy five hundred thousand dollars with my eyes closed with a hundred thousand dollars in cash. I get a five hundred thousand dollar piece of real estate. So you can leverage in a good way. Good, this, this is good leverage, right? That you can take that and get much more than what your dollars are, right? And, and so that's, to me, that's a no brainer for risk. Right? It's, it's, it's good assets that you're, you're purchasing and, and good debt and we use that debt wisely, right? Where most of our properties, you know, we started, the first one was 20%, second one was 25. I think everything after that, it was like 30, right? The, the more that we buy, the more that they want down.

• 22:06Speaker 01

  Uh, everything now at, at this point was at 30% down. And so, you know, and now we've got one of them paid off, a second one getting ready to be paid off. And this is our plan at this point. We're not really looking to acquire anymore. Our plan at this point is let's get these things paid off. And when everything paid off, I'm looking somewhere between 20, 25,000 a month. Right? I think I could retire pretty comfortably on that.

• 22:30Henry Washington?

  Yeah, absolutely, absolutely. Absolutely. I'm, I'm in a very similar boat now. We're focused less on, on growth and more on paying down assets. Cause you use the term generational wealth and I feel like that gets thrown around often and people don't realize truly what it means. But in my eyes, you can't pass down generational wealth if you're passing down leveraged assets. So you gotta get those things paid off so that you can pass down something that truly produces income for somebody without them having to work. So we're, we're focused on that as well. Well, I've got a few more questions for Neil, but we're going to take a quick break and we'll be right back.

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• 27:11Henry Washington?

  All right, we're back with Neil Whitney talking about how he grew his real estate portfolio, starting at the age of 47. Neil, one of the things I want to talk about is you're buying properties in that sub $200,000 price point typically for a single family. Some would call that lower income, depends on the neighborhood. But I think there's a stigma, a lot of the times, with the tenants that can afford to rent these places. I want to hear from you on what's it been like to own assets at this price point? Have you had issues with tenants? Is it, you know, how and who's managing these?

• 27:47Speaker 01

  So my wife and I still manage them. And I think we've had two evictions over the course of, you know, I guess we're coming up on nine, 10 years. You know, the biggest thing is you're screening, right? Make sure that you're screening your tenants and finding the right tenants. Income, we want to make sure they're earning three times the monthly rent. And you know, we want to make sure that if if they've got bad credit and it's because of medical bills, I'm not going to hold that against them. If they've got bad credit because they just don't pay their bills, that's another whole different animal.

• 28:21Henry Washington?

  Yes.

• 28:21Speaker 01

  Right? And so we we we take everything into consideration and we just, I don't know, maybe we're lucky or we we're just really good at screening. You know, we we've had really, really good tenants and most of my tenants are long term. I mean, in the in the original four place that I bought, two out of the four are still the original ones that are in there.

• 28:41Henry Washington?

  Yeah.

• 28:41Speaker 01

  Right? And and the the first property I bought, I've had, I think, two or three tenants over the whole time. And the most of these people that move out, it's because they buy a place, right? They bought their own place.

• 28:54Henry Washington?

  Now, I want to make sure that people still understand this because you're just blowing stereotypes out of the water right now. Do you still have a full time job?

• 29:01Speaker 01

  Yes.

• 29:01Henry Washington?

  Does your wife still have a full time job?

• 29:03Speaker 01

  Absolutely.

• 29:04Henry Washington?

  And you manage your portfolio of how many units?

• 29:06Speaker 01

  Twenty three doors.

• 29:07Henry Washington?

  Twenty three doors, starting at forty seven. See, I I I'm I'm reiterating these things for people because I don't know how many times I hear, I don't have time. I can't manage properties. I can't do this. I can't figure it out. And you are literally still, to this day, managing a sizable portfolio at a price point where people think all the tenants are going to be problems. And you've done this, like I said, starting at the age of forty seven. People can do this if you stop making excuses and just starting putting things into action. You can also hire property managers if you need to, but you can, anyone can literally do these things.

• 29:44Speaker 01

  We're still cutting the grass.

• 29:48Henry Washington?

  Oh, your son is.

• 29:49Speaker 01

  My son is. That's right.

• 29:50Henry Washington?

  And one thing I want to make sure that I reiterate for people is what you said that was very important when we started talking about tenants and if you're managing them is you said, you're really good or you take the time to be good at tenant screening. And that is what I find the problem is with most landlords who tend to claim that certain tenants in a certain class can be a problem. Because what I found after managing rental properties at both high price points and lower price points, it's that it's not that one price point of tenant is worse than the other. I've had bad tenants at a low price point and I've had bad tenants at a high price point. Do you know what the common denominator was among those bad tenants at price points?

• 30:35Speaker 01

  Screening.

• 30:36Henry Washington?

  Me. Me, we have to take responsibility for being good and doing the detailed work it takes to screen tenants. I couldn't tell you how many times I hear landlords who don't call and talk to references, or I hear landlords who don't call the previous landlord and ask questions, or I hear landlords who don't call their employers and ask questions. Like, all of that stuff is tedious, but that's the stuff that's going to help you make sure you select good tenants. If you're good at tenant selection, it doesn't matter the tenant class that you're in. It's because you're picking the right people for the property that you have to offer.

• 31:18Henry Washington?

  And it sounds like you're just, I'm gonna call you Tim Dunk, the Tim Duncan of real estate, man. It's big fundamentals over here. He's just fundamentally sound real estate investing. I love it.

• 31:26Speaker 01

  And so, Henry, one other thing too is, you know, we treat our tenants like the best customers on the planet, right?

• 31:33Henry Washington?

  Oh, man, you're talking my language.

• 31:34Speaker 01

  So, we love our tenants. Like, we, we want them to be happy. We want them to stay forever. And, and I've, I've got, I'll, I'll give you one example. I've got one tenant that she lived in this really, really nice house, and her husband passed, and she's like, look, I don't want to take care of anything anymore. So I just want to move into an apartment and have you take care of everything. We're like, okay, great. We're, we're happy to do that. Well, she came in, she put gutters on our property, she put in porches, um, did all kinds of landscaping, all in her dime, not on my dime.

• 32:09Henry Washington?

  Yeah.

• 32:10Speaker 01

  But because we come out there and we cut the grass and all that, she's perfectly fine. She, like, she, she invested probably five, $10,000 into my property. That's gonna stay there when she leaves at some point. But, you know, she, she did all that on her own because she wanted someone that, that would come out and take care of the problems when she had them. And we do, right? If, if someone calls us and says, hey, you know, I've got this and this going on, we're prompt. We're, we're out there, you know, we're, we're getting it taken care of as quickly as possible and making sure that, you know, our tenants are taken care of and that they know that when they call us, we're gonna respond.

• 32:47Henry Washington?

  That I'm passionate about because I feel like there is still a pretty big divide between landlords and tenants. Tenants typically come into a rental relationship with a stigma towards a landlord, no matter who it is or where it is. And a lot of landlords unfortunately look down on tenants.

• 33:05Speaker 01

  Live up to that reputation.

• 33:08Henry Washington?

  It's such a weird dynamic for me because in any other business industry, we would not accept that because we are in the customer service business, right? And so if you're as customers of other businesses, we do not allow people to treat us a certain way because we are the customer. But when it comes to real estate, landlords don't see tenants as their customer and they don't treat them as such. But what I found is when you treat your tenants like customers and you provide them good quality customer service and you give them that respect, they respect you and they respect your property in return.

• 33:50Henry Washington?

  And a lot of people want great tenants, but they're not willing to treat tenants great to get that same result. And so I just want a lot of landlords to hear what you're saying and to hear what I'm saying and realize that without tenants, we don't have wealth, we don't have a business. We provide the service, they are the customer. If you treat your customers with quality customer service, treat them like human beings, treat them like you would want to be treated in a service-based business, you'll be surprised at how much better your life becomes as a landlord.

• 34:24Speaker 01

  One thousand percent and I couldn't have said it any better, Henry. What we're talking about here is taking care of your people. And whether it's my employees at my day job or it's my tenants that live in my properties, one thousand percent, you gotta take care of them.

• 34:39Henry Washington?

  What I want to do as we shift toward the end here is you've done something great, right? You decided you were going to do something. You didn't let any of the negative self-talk stop you, you didn't let any of the.

• 34:51Speaker 01

  Oh, you mean my family members? What are you doing? You're out of your mind?

• 34:55Henry Washington?

  Absolutely, absolutely. You figured out a way to be successful. What and and and now you've built a portfolio up to the point to where you're starting to figure out how to protect that portfolio by paying off the assets. So you've truly done the thing that a lot of our listeners want to do. And so what advice do you have for the person that's listening? Who's maybe in the same boat as you, who has the full time job, doesn't have any money saved up, but really wants to get to that financial freedom point. And and and yes, you still have a job. I get that and it's great to have. I don't think people should quit their job unless they absolutely have to. But what advice do you have for that person who's hearing all this negative self talk?

• 35:39Henry Washington?

  Who's hearing all the negative talk from the people around them? Who thinks it's it might be too late or they don't have enough money or they don't have enough time?

• 35:45Speaker 01

  I think it all starts with you, right? You have to make a decision as to who you're going to be, right? And how it is that you're going to live your life and what type of future are you going to set up for yourself? Cause if you don't like where you are today, go look in the mirror. You're there because of the choices that you make.

• 36:06Henry Washington?

  Yeah.

• 36:07Speaker 01

  Right? And so make a decision. Where do you want to go? I I didn't like where I was at at forty seven years old. And like I said, we watched that silly lifetime movie that changed my life. Right? And I decided then and there that I wasn't ever going to be that guy. And there's no way I was going to let that happen to my family. And I made the decision and I I just, you know, dove in and and the hell with all the naysayers, all the negative people out there, you know? I focus on what's good for me and my family and what's good for my business.

• 36:41Henry Washington?

  I love that. I've I've given many a talk about that about this is is the power of deciding. There's a difference between what you're saying and what a lot of investors say. Cause what a lot of investors who are getting started say is they're going to try. They're going to give investing a try.

• 36:57Speaker 01

  Try in my vocabulary makes me want to throw up. And so I run an HVAC company as well. And if anyone in here says try, they immediately go huh. Because that's a no no word in my business. Try means plan to fail.

• 37:13Henry Washington?

  Plan to fail.

• 37:13Speaker 01

  Plan to fail.

• 37:14Henry Washington?

  100%. There's power in decision because decision says, no matter how many times I fail, I'm going to keep going until I get it right. And your brain understands that and starts to figure out ways to help you. If you tell your brain you're going to try something, the second you try and fail, your brain goes, we accomplished our goal. We did it. We tried. And so when you and the and the beautiful part about what you did is you decided before you knew how. And I think that there's a lot of power in that because most of us want to know how first before we decide if we want to do it. And that's not, that's not how life works. That's not how life works.

• 37:54Speaker 01

  This is not rocket science, y'all. This is, this is like you said, basics. And, and I'm a simple, boring investor. I'm doing basic 101 investing. Nothing crazy. No Airbnbs or anything. I'm just buying properties and getting them to cash flow. And watching properties that I bought for 70,000 now worth 140,000.

• 38:19Henry Washington?

  Yeah.

• 38:20Speaker 01

  Right? Property that I bought for 300 is now worth almost 500. Right? So these properties are just continually growing. When my wife and I, you know, we, we sit down and we go through our books and, and look at things. And, and when we saw that our, our net worth finally had that million dollar net worth, it was like,

• 38:39Henry Washington?

  Hey.

• 38:41Speaker 01

  Holy smokes. We're worth, we're millionaires. Are you kidding me? I mean, we still have a million dollars in the bank, but it technically, you know, we're there with it.

• 38:49Henry Washington?

  Forbes says you're a millionaire.

• 38:52Speaker 01

  But you know, so keep it simple, right? Don't complicate things. Basic real estate has made millions and millions of people wealthy.

• 39:01Henry Washington?

  That's right.

• 39:02Speaker 01

  The riches are in the niches, so to speak, but you know, if you're going to be that niche guy, you better be really good at whatever it is you're doing. I'm not really good at anything, so I just, I just focus on the basics and, and I guess I'm good at the basics.

• 39:15Henry Washington?

  I'm with you. I'm good at, I'm good at keeping things simple and this is a great. Simple framework for people to follow. I know you mentioned that your goals were to start paying off some of these assets and you've already done that. You've paid off one or two and you're and you're working on some more. Is there anything else you're working on in the future for your portfolio? Are you planning to grow anymore? Is it particularly just pay them off? Are you going to pivot to anything or is it just stay the course?

• 39:38Speaker 01

  The goal right now is to help my son get into his first property. And I told him, hey, look, whatever it is you decide, if you if you have $20,000 to put down, I'm going to match you $20,000. So whatever you put down, I'm matching you 100%.

• 39:51Henry Washington?

  Are you adopting any more sons? Cause I mean, I could use a, I could use a, I could use a match program.

• 39:57Speaker 01

  It's a one time deal for him, right? You're not going to use it over and over again, but first first place. And I told my daughter the same thing. I got a daughter who who is giving, you know, she's pregnant and she's going to be having a baby shortly and so.

• 40:08Henry Washington?

  First grandkid?

• 40:09Speaker 01

  First grandkid.

• 40:10Henry Washington?

  Congrats.

• 40:10Speaker 01

  That's right. Thank you. Thank you. And so, yeah, now I've really got something to to start building this this whole thing off and.

• 40:17Henry Washington?

  Something tells me you're going to be a sucker of a granddad.

• 40:20Speaker 01

  Yeah, I I think so too. But, uh, yeah, so and then here's the other thing, right? My wife and I, when we first met, she I she's from New Orleans and and she hadn't really traveled past the Gulf Coast. I think the furthest she had ever been in her life was to Florida. And since we've met, we've gone, you know, Caribbean and Canada and all, but I want to, I want to fill her passport book. That's that's my end game, right? I want to take $20,000 a month and and blow it because I can, you know, and and travel the world with her and fill her passport book and show her what an amazing world that we live in, right? The United States is great, but there's so much more like and and, you know, just the places in the U.S. that she hadn't seen. I've taken her to New York.

• 41:05Speaker 01

  I've taken her to Niagara Falls and and Tennessee and just, you know, a bunch of places that she'd never been before. Georgia and North Carolina and just, you know, all over and and she's like blown away. So every time I take her somewhere and she sees something that she hadn't seen before, that that for me is the it moment, right? When when you get your wife out there and she's just like. In awe and, and you know, just so appreciative of, of things that we never thought in our wildest dreams that we'd be able to do that. Now we can do it. We just bought our dream home. Didn't ever think we'd ever have a house that like we have now, you know, we, we've got a great house that we bought in South Mississippi and you know, it's, it's, you know, it's, it's been

• 41:47Speaker 01

  a life-changing event getting involved with real estate and it, it started with a Lifetime movie and, and you know, Rich Dad Poor Dad, you know?

• 41:56Henry Washington?

  I've heard, I've heard a lot of real estate stories about how people got started. This is the first one I've heard that started with a Lifetime movie. That's

• 42:04Speaker 01

  Someone's got to fill a niche.

• 42:08Henry Washington?

  Oh man. Well Neil, thank you so much for coming on the BiggerPockets Podcast and sharing your journey with us. It is a truly inspirational story. You have done the things that a lot of people think either you shouldn't do or you can't do and you did them well and you did them fundamentally sound and it sounds like now you and your family are reaping the benefits of those great decisions. So thank you for coming on and sharing with us.

• 42:34Speaker 01

  Henry, thank you for having me. It was a real pleasure meeting you.

• 42:37Henry Washington?

  All right. Thank you everybody for tuning into this episode of the BiggerPockets Podcast. We'll see you on the next episode.

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