It’s been a while. In fact, almost exactly one month since I’ve written a case study update.
Right off the bat, I apologize for missing so much time on this case study. My intention is to write a post every single day so there is always new content on what is going on. This case study is only truly valuable if you, as the reader, can see the daily going-ons as I go through entrepreneurship. It’s not valuable if I go away for a few years, the pop-up and say “Hey, I did” and then write a book about how I made money.
That’s retroactive and doesn’t give you the full look at what the day to day looks like. This case study is about the day-to-day.
That being said, I think it was okay that I missed this past month because our first child came about a month ago! My fiancee and I have been off from just about all work as we spend time with the baby. He’s amazing, and we love him so much. We’re tired, but I don’t think we could care less.
Being a parent is a total game-changer. I don’t have nearly as much time as I normally do. That’s okay though, because the baby is worth it.
But, it also means:
- I need to grind a lot harder when I do get a window of free time. I can’t waste time at all.
- I need to prioritize my relationship with my fiancee even more, because we get less alone time with just the two of us
- I need to make more money, and faster, so I can spend more time with the little baby
It’s a different world we are living in here. I have to get to $10K a day at 30 even more now. And I am 100% going to do it.
I took the last month off to be the family/had paternity leave from my day job anyway. Now, it’s a new month and I’m back to work. With that in mind, it’s time to start back up on the case studies.
Yesterday there were 1,548 days until I turn 30 and need to make $10K a day passively. Here’s how I spent yesterday (and the past month) in pursuit of that goal
The current phase of the plan
I’m in Phase #3: The Business Phase. You can read more about the phases and my plan to get to $10K/a day at 30 here.
I’m going to be updating the plan slightly…stay tuned.
Wake up & sleep:
This section will be largely a joke for the next few months. My total sleep was 4 hours and 31 minutes, and Whoop has my recovery at 50% overall.
Not horrible actually for a young baby at home, but trust me, there have been worse days from a sleep perspective.
With that in mind, it would be very easy to say “Fuck it, I can’t work right now….baby.”
That’s not fair to the baby to be blaming him. It’s not fair to myself to be skipping out on progress either. I need to do what I can to work while he’s asleep because that’s the only true window I get to work.
This part is more exciting. I ordered a Peloton over two months ago and it finally came during this month off. As a result, I’ve been spending a few days a week with my guy Alex. He’s damn good as an instructor and reminds me of some of the best athletic coaches I’ve had.
It might seem weird to be working out more when I’m sleeping less, since I theoretically should be using less energy. However, I actually feel pretty good and I credit at least 50% of that fact to the increased exercise. The other 50% is below for the diet side of things.
I’ll continue to work out on the Peloton as much as possible. My goal is to do at least one Peloton workout per day.
Stress has been pretty low this month since things have been laid back.
Diet has been an interesting one.
I’ve seen a lot of information online and within some fantastic Netflix work (Game Changers) about the impact a vegan diet can have on the body. I’ve largely resisted this because I love steak, and because I didn’t have a strong reason to go down that path. I’ve been healthy and in shape my whole life. Giving up meat for a boost in energy, say 10%, didn’t seem like a trade-off that made sense to me.
Now, I’m getting less sleep and am running on lower energy. So the trade-off for an additional 10% seems more worth it.
I’ve gone full vegan now for a few weeks and I feel substantially better. My energy levels are much higher and I’ve noticeably lost weight.
Interesting, my Whoop recovery scores are close to being the same as what they were pre-baby. However, I’m getting about half as much sleep.
Said differently, eating vegan is doing the same for my body as 3-4 hours of sleep did each night.
I also don’t really miss meat or anything like that. Sticking with veggies feels good and healthy so I’ve got no problems with continuing to run down this path. This is going to be a long term thing.
My Day Job
Nothing to report since I’ve been on pat-leave.
Investment real estate
Things have been interesting and busy on the real estate side of things. There is a lot to go through here.
Our 7 Unit deal
The 7 unit has been a thorn in our side for a long time now. Mainly, the property manager absolutely blows. It took her months to get only some of the units listed on the market. She has yet to get any of them rented.
We were told the property is dirty and has trash outside. A tenant moved out, and despite her assurances that unit would get cleaned, it has not been done.
We also found out, despite the bills being sent to the PM, she hasn’t been paying them.
This is negligence to the point we could probably sue. It’s unbelievable the incompetence here.
It’s also not fair to totally blame her. We picked her as the PM. We fucked that up ourselves.
Either way, we’ve decided on a couple of things.
- First, we are going to try and sell the property. If we can sell it at appraised value, we will gladly do so and take the cash out. This could be hard to do because only 3 of 7 damn units are occupied!
- Secondly, we are going to fire this PM. We should have done it a long time ago. We’ve found a new PM and are transitioning over to him shortly.
I think I’d prefer to get the 7 units occupied and then sell the whole thing. However, if we do the building fully occupied, then it will cashflow like crazy. If this new PM is good, then I’d be tempted to just keep the building.
We’ll see what happens.
This PM is putting the other to shame. She has done full rehabs and gotten these units rented at a higher price point. Easy money cashflow here.
The 24 unit & the 25 unit
As I’ve written about a bunch before, there is a 24 unit we’ve had our eye on. It’s in the same town as the 6 unit and the PM manages the 24 unit already. The 24 unit is $750K. There is also a 25 unit in town that I’ve had my eye on for a while that’s north of a million dollars, and an 11 unit that’s $495K (but some of those 11 units are retail.)
Anyways, I was just checking in with the realtor we work with. I told him our plan was to hopefully buy the 24 unit by end of 2020 and then the 25 unit by mid/late 2021.
Our realtor, bless his soul, told the sellers that. They made us an offer to buy all the properties for $2.5M for 5% down, they would hold a sellers note for 15%, and the bank would chip in the 80%.
They actually made this offer on the day our son came!
So, we negotiated this from the hospital room the next day.
We finally agreed with them and the baby for 10% down from us, 10% down from the seller for two years, and then 80% for the bank, closing at the end of the year for $2.15M.
What I mean by 10% from the seller
We are only paying 10% of the down payment now, so in this case, $215,000 to the seller. The seller agrees to receive the other $215,000 from us in two years from now.
This essentially buys us time to come up with the remaining cash. In practice, we’ll essentially re-finance the deal with the bank in two years.
Each month, we’ll pay down the principal with the bank as part of our monthly payment. Let’s say we pay down $60K over the next two years.
Let’s also say the properties appreciate 5% and are now worth $2.25M for a gain of $100K.
We can refinance the deal with the bank and take out that $160K in cash. We’ll then combine that with $55K from us, and then we will pay off the seller.
In other words, we can get the property for only $215K initially, then $55K later for a total of $270K or 12.5% downpayment.
Not bad for a $2.15M investment property package that will cashflow about $62,000 a year. To generally do the math, that means an ROI of 23% ($62K/$270K).
If the property doesn’t appreciate, however, then we are in trouble and will need to put out more cash to make this happen. Let’s hope it appreciates!
How we managed to pull this off
If you look online, you’ll see everyone talking about how they would love to do a deal like this. For good reason, as you saw with the math above. However, most people cannot pull a deal like this off.
The only reason we were able to pull off a deal like this is due to the fact we’ve purchased from the seller and this bank before. As a result, we all have a lot of familiarities with each other and are comfortable with it. In short, the sellers know we’re not amateurs and that we will be good for the cash.
The implications from this deal: it’s going to be tight
Doing this deal is going to be beyond extremely tight for us. I have a detailed model to calculate our financials and it’s going to just about drain us to nothing in order to do this.
We have to go all-in to have the $215K available.
Selling the 7 unit would help get some cash-out. Cashing out the ~$15K in my 401K would also help.
We’re being very careful about this based on the implications here of what it would take to pull this deal off. As a result, this is actually going to be the first property we ever visit for an inspection. We’re going to visit it next week to make sure we are 100% into the deal and are ready to liquidate everything to make it work.
My Actual Business
It’s been fun! I started pitching on work late last week and have now sold a big piece of work for the next few weeks. It’s going to be good to get started again and get paid again!
Sourcing new work
I might try to source new work still. Every additional penny counts when we’re trying to make this deal happen.
Lots of family time with the three of us!
Rescue Time Daily Screenshot
What I made today
Current Income Streams
- Job: $170
- Rental Income (13 rental units): $43
Planned income streams
- My business, which I’m calling CCIO
- Content Websites (NOT $10K)
- Business Acquisitions
- Dividend Income
Today’s pro-rated amount of monthly & yearly expenses
Life Expenses: $89.73
- Rent, utilities, Internet: $63.33
- Phone Bill: $1.57
- Heath Insurance: $8.90
- Ladder Life Insurance: $0.83
- TrueBill for Budget tracking: $0.10
- Car: $15
CCIO Expenses: $0.16
- Bluehost Domain name: $0.16
Health Expenses: $12.00
- Peloton: $3.20
- Gainful Protein Powder: $1.80
- Care/of Vitamin pack: $3.00
- Whoop fitness tracker: $1.00
Productivity Expenses: $2.25
- SuperHuman to save time on email: $1.00
- Rescue Time to keep me honest on my productivity: $0.20
- Fantastical as my main calendar: $0.20
- Evernote to track everything: $0.27
- Grammarly to keep my emails looking okay: $0.38
- BackBlaze to keep my files backed up: $0.20
Consulting Business Expenses: $2.30
- Gusto to pay myself: $1.50
- Quickbooks to track expenses: $0.40
- Google Business Email Account: $0.40
- Fiverr for virtual support: $0
$10K a day: $1.57
- Kinsta for hosting: $1.00
- Bluehost for domain names: $0.03
- WP Rocket for speed: $0.14
- Link Whisper for SEO: $0.14
- Elementor for site design: $0.14
- Astra for theme: $0.14
Real Estate Investing: $0.52
- Legal Zoom Registered Agent (all LLC’s): $0.52
Today’s Income (pre-tax)
Topline of $213, spent $160, which means….
Made $53 (pre-tax).
My plan for tomorrow
Tomorrow is Tuesday and I plan to:
- Get started on my new sold project
- Write on $10K
- Work on property manager hand over for the 7 unit
1,547 days until I turn 30. I’m making $10K a day passively by then