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20:32And that ended up working out for me. I got pretty lucky finding some good properties looking for that. And you're living very frugally during this time, especially at Fort Bragg and these house hacks essentially the whole way through. So it seems like you're able to accumulate a lot. I would imagine you're able to accumulate a lot of cash, like maybe$40 ,000 to$50 ,000 a year starting after that first house hack at least. Is that a fair ballpark? That's probably true, but I was dumping it into properties. I made some other purchases and pretty much dumped any excess cash I had into those properties in those early years.

21:00I consider that accumulation personally. That's going into an investment. I wish that I tracked it more at that time, but I didn't. I just was kind of bank account balance, finance. I have some more cash. Let's look for another property. And that's how I did it back then. One more question before we get to real estate. Were you doing anything else with any of this cash, any stock investments at all? I was blindly maxing out my Roth IRA. And I had all of that in VTSAX because someone had recommended the simple path to wealth to me. And that was my key takeaway. So I was blindly doing that. And then my TSP, which is the military or government equivalent of a 401k, they will match you or the government would match me up to 5%.

21:43So I was putting in 5 % into my TSP and investing that all in the C fund, which is just like the large cap stocks, S &P 500 equivalent.

21:53Mindy Jensen:You said you were blindly doing this. Do you regret doing that? No, I don't. I don't. In fact, I still do it, but I just didn't really have a great understanding of what I was doing. I was just kind of doing it because it sounded like the right thing to do. And I still think it was the right thing to do. Specifically, what I came to appreciate with Roth IRA contributions is that you can withdraw your contributions from a Roth IRA at any time, penalty-free and tax-free, which became valuable to me when I started to care about reserves and access to liquidity as my real estate portfolio grew. So I think it was the right decision.

22:25I just didn't really know it was the right decision at the time.

22:28Mindy Jensen:And is that where your investments lie in real estate and the stock market through the TSP and the Roth IRA? Do you have anything else that you're invested in? At this point, yeah, my investment portfolio looks a little bit different than it did at that point. But as I was kind of in growth mode, it was mostly real estate. And then I was putting in kind of those minimum amounts into or maxing out my Roth IRA and then putting in the minimum 5 % of my pay into the TSP. At this point, and I don't know if it's time to talk about this, but I'm in Bitcoin, I'm in private credit funds, and I do private lending myself.

23:01So it's changed a little bit because my personal finance situation is different than it once was. But yeah, it looks a lot different now. How did Bo scale his real estate portfolio to$10 ,000 a month in cash flow? We'll be breaking it down when we're back from this short commercial break. Hint, hint, it's commercial real estate. I'm skeptical of a lot of financial products, but life insurance isn't one of them, at least not term life. For the vast majority of you listening, term life is simply the right answer. And the smartest way to buy it isn't one big policy, it's a ladder. Your need for coverage isn't flat.

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25:00Mindy Jensen:Thanks for sticking with us. Let's hear a quick overview of the real estate journey now. We have the three house hacks, the duplex, the two quadplexes. Can you tell us about the first deal outside of those house hacks, how you got that done, and then give us an overview of the rest of the portfolio as it escalated from there? So like I said, I was in search of seller financing opportunities. So I became pretty smart on being able to explain all the implications of seller financing and understanding how to look for it and the type of person that may consider it and just how to speak to that if I encounter that person.

25:34So I just started cold calling like crazy. I had a list from another investor of high equity properties. And a lot of those properties had out of state owners and small multifamily also was what I was interested in. So I just started cold calling. And the first one I came in contact with a woman who lived out of state. She lived in Texas and And she was a retired military officer as well. And she owned a five unit property in Fayetteville. And she wanted to make sure I wasn't just one of those other investors that's going to waste her time and throw her a low ball offer.

26:03Mindy Jensen:Initially, it was kind of tough to keep her on the phone. But over time, I was able to build some trust with her and just kind of explain my situation, explain what I was trying to do. And I kind of bought some of her time. And it just so happened that I was heading back to Texas. That's where I'm from for Christmas. So I said, hey, you know, I'll be in Austin area. She was in San Antonio. I said, I'll drive a couple hours and come meet you. So I did. And throughout that conversation, I explained seller financing. And it worked out well that she didn't need the money from a sale right up front.

26:31She kind of was just looking to make a wise decision. And we were able to work out a situation where she financed 100 % of the purchase price over 30 years at a fixed interest rate, an appealing interest rate. I don't remember what it exactly was. And it's actually changed because she did a refinance with me a few years later, which I can get into. But I bought that five-unit property, 100 % seller financed, was just over the moon about it. And she was happy about it because she was getting a much better purchase price or sale price than what she had bought the property for. And it was turning into a source of income that was secured by a property that she'd owned for years.

27:09And her gut feeling about me was that I was a safe bet in terms of another military member and someone that was not going to run the property into the ground. In fact, I was going to improve it and improve the value of her collateral. So it turned into kind of a unicorn situation that was still as one of my best properties.

27:25Mindy Jensen:So over the years that I was the community manager for BiggerPockets, I was in the forums all day, every day. And I would see people talking about, oh, I can't find a seller financed property. I love that you had a list. You don't just start calling people or calling listings from the MLS and say, hey, would you sell or finance? As I'm a real estate agent and right now I've got calls from people saying, oh, would they sell or finance? I'm like, no, it's on the market to be sold. They want to be done with it. But having a list of properties that aren't on the market, I wonder if she was even thinking about putting the house on the market.

27:57Mindy Jensen:And you said, oh, she didn't want me to be wasting her time like all these other people. There are so many people out there who want to, oh, it's worth$100 ,000. I'll give you$40 ,000. Well, great. I would make that deal all day too, but that's never gonna happen. You have to make it attractive to them. And getting it for a low price is not nearly as important as getting it for 100 % financing. It's not like you paid double what it was worth just so you could get 100 % financing. I mean, how much do you think it was worth when you bought it and what did you pay for it? So I did get a good price on it, but I gave her a higher price than she was asking.

28:30So I think I bought it for around$150 ,000, which is a crazy price.

28:34Mindy Jensen:For a five-plex? So listen, this is a monster home. Right. So this is an old home that had been converted into five one bedroom or studio style apartments. So it was a unique property and she was having issues with the tenants she was renting it out to. I don't know. It was just it was attracting tenants that were not working out well for her. So she gave me a price and I said, essentially, if you can finance it at these terms, you know, I'll give you even more than that price because I think that's what's fair. And she was she was happy to do that. I saw it as an opportunity to get into the Airbnb market, which was that was kind of a new thing.

29:08new strategy at the time, but I thought that there was an opportunity to turn those all into pretty inexpensive short-term rentals. They were very profitable when I did do that. So I kind of changed the situation in terms of who was being rented to, and it became a very, very valuable property to me. And I think a lot of people kind of started doing that in that area because it was a desirable area and the property values drastically increased over the next two or three years. When I think about the 100 % seller financing stuff, I think that for a lot of people, this concept is a pipe dream, frankly, and it's not really realistic.

29:40And I think that that changes in a situation like yours, because if someone says, hey, I want to buy your property with 100 % seller financing or whatever, I'll laugh them off most of the time. But I'll listen if a captain in the army from West Point gives a call and that person is living in a crappy half duplex to save a bunch of money on there, clearly saving everything they've got and has two or three years of real estate experience under their belt is not way over levered relative to their situation and is making 70, 80K a year plus those two things. I don't know if this person, this seller, knew or understood all of those things about the underlying bet that she was making around there.

30:21But to me, those scream really good odds compared to this person has no job, no source of income, no other things in motion, and now I'm going to be collateralizing my loan against just the property. Did that play at all into this dynamic with the seller or how did you perceive your ability to convince people to give you seller financing of this sort? I think you're exactly right. I'm not pushy when it comes to kind of negotiating with real estate, but I do try to be mindful of the picture that I'm sending to the seller and the different things they may value and what a potential buyer may have, especially with seller financing, because you need to understand and trust in the person you're selling your property to because you're not just walking away from it completely.

31:00They are now your borrower. They should look at you kind of the same way that bank looks at a lender. Give me one more item on this. Could you have paid, could you have put down a substantial down payment on this property if required? I could have put down definitely more than I did, more than that 0%. But at that time, I probably didn't have a ton to put down also. I probably had maybe$10 ,000 or$20 ,000 that I could have put down. And I explained to her and I told her that I said, there's some issues that I want to get after in this property if I buy it. There was kind of some water intrusion issues in the basement.

31:31I said, you want to make sure that I have money to fix this property up. And that made sense to her. And one of the reasons she was okay doing that, 0 % down financing. Got it. Okay. So there was cash that you put into the deal. It just wasn't in the form of a down payment. That's correct.

31:44Mindy Jensen:Were you going to be living in this property? Did you have any plans to move into it? Not this property, no. I'm wondering how you would have financed this if you didn't do seller financing because it's a commercial deal. But if you're not going to live in it, then because you can't live in your commercial property, can you for a commercial mortgage? I'm not sure about that. And I call it five units. But it's just an interesting property where it's probably looked at as a fourplex. In fact, it says like on the tax records, duplex nonconforming. So it's kind of an interesting property. I don't think that it would be looked at as a five unit apartment building.

32:17And if it were, there's probably some changes I could make take down a wall and turn it back can afford. But in my journey at that point, four or five years ago, that's probably a wise question to ask. And I was not asking those questions yet. I was just excited to get what I was pretty sure would be a good cash flowing asset, putting very little of my own money into it at a good price. So after your house hack and your illegal cash flowing fiveplex, how does the rest of your journey?

32:41Mindy Jensen:Nonconforming, Scott. Not illegal, nonconforming. The journey went a lot faster than I had expected it to. I kind of set my sights on if I can work towards getting 10, thousand dollars a month in real estate income by the time, you know, five years from now, that will give me, I think the confidence I need to leave the military. If I still feel like that's the right thing for me to do and have income in to support my lifestyle. So that was the goal. All I was thinking about in terms of investing was how do I build up my cashflow to work towards this goal? And I told you seller financing specifically is what I was looking for.

33:14So there was a, another home that, that came available in my neighborhood. When I say available, It was a for sale by owner in Sharpie, a sign in the yard, which I was immediately attracted to. I called it. It was a gentleman. I'm going to make this a long story short, but a gentleman that I got to know. He had military ties as well. Also, his son just so happened to have gone to West Point. So we had some great connections. And it turns out that he had nine other properties, 10 total properties. He was in his 80s. He was looking to get out of the rental business. They were all debt free. He didn't have any loans against the properties.

33:47and they were well off financially. It was kind of a side hobby for him. So this was another unicorn situation I had kind of stumbled across where I was able to build trust with this gentleman and give him the purchase prices he would need to be willing to sell me all 10 properties. I put$500 down on each property as skin in the game. So he knew I was really invested. He understood I was not putting much down, but it was similar to what you talked about earlier, Scott, where I believe that this gentleman, his name is Mr. Taylor, felt like he was making a good bet and who he was selling the property to.

34:22And he was ready to be done with it. And I told him, I will make it easier for you than anyone else will. There's no renegotiation. There's no, you know, I'll come to your house and sign all these contracts. And that's what happens. Long story short, I bought these 10 properties for pretty much 0 % down. And I did have to put in a lot of money into those properties once I bought them. But that was a huge kind of leap and bound in my journey growing towards that cashflow goal. What year is this? 2020. It was great timing. Great. And you had one or two more years left at Fort Bragg after you purchased this?

34:52Had about a year and a half left after I purchased those. And by the way, my wife, all my friends that kind of knew I was dipping my toes into real estate, thought that I had just totally lost it when I bought 10 properties in one fell swoop because it kind of looked like I potentially was putting myself in a position to be over my skis, but I went for it and it worked out. And what was the total purchase price of this 10 unit portfolio? Yeah, I don't have the exact numbers, but it was around half a million dollars that I bought all 10 properties for. Again, this is a different price point market and values hadn't really started increasing like crazy kind of when COVID hit.

35:28And after that, it was around$500 ,000 total purchase price on these properties. He financed them for 30 years at 3 % interest. It was another kind of home run deal for me. But even with those terms, initially, they weren't cash flowing because they weren't getting market rent. They had some deferred maintenance. So I went in and cleaned them up and invested a lot into them. But by the time they were getting market rent, they were cash flowing very well. And then similar to that duplex that I explained, how it went from around $100 ,000 value to around$200 ,000 today, that's kind of the same story I've seen for any other properties that I owned in Fayetteville that I bought around 2020.

36:03It was almost a doubling in the price from then to the height of the market a year or two ago. Let's also put that in perspective, I think people hear, oh, you got 10 properties for 100 % seller financing at this point. But if you look at a market like Denver, like my context in this, one duplex is$500 ,000. And you're an Army First Lieutenant at this point when you're purchasing this. You could have bought a house for 500 grand and probably qualified at that point with your income. So this is not an insane overreach in this particular situation. And you weren't going in over your skis on it.

36:38Mindy Jensen:And now you have how many properties and how many units? So today, looking at my notes, I have 52 residential units. I also got involved in a mobile home park, a partnership. So I own a third of a mobile home park. It's got about 46 units in it or 46 lots. I have an assisted living building that we rent to operators. So we just own the building, my father and I. And then we have five small commercial spaces, two small self-storage buildings in Alabama. So I've kind of branched out in terms of the different asset types and asset classes within real estate. But it was all in search of cash flow.

37:14And there's a lot of seller financing mixed in with a lot of those purchases. What is your real estate income from this portfolio? What's an approximation of the cash flow that you generate? Cash flow-wise today, my direct real estate ownership is spitting off about$9 ,200 a month just from real estate. I'm also doing private lending with money that ultimately I kind of extracted from real estate through some refinances and things like that. And that private lending is probably bringing in$4 ,000 or so on average per month. So very meaningful monthly income for me just from that real estate investment.

37:48That's awesome. That 9200 include all the commercial and the mobile home park as well, or is that just the residential portfolio? It includes the mobile home park and all the commercial as well. So when I moved back to Alabama around that time, and this was a big shift for me, my father, who's always, he was a business owner and he's financially savvy. He became interested in kind of what I was doing in real estate specifically. So we worked out kind of a partnership where from that point forward, kind of any deals that I found, I pitched to him. And I found a way to kind of work backwards on the numbers to where he's still going to get a 12 % or 13 % return.

38:21And then I'd have him put in as much money as he could to still get returns at that kind of threshold. And then I'd put in the rest, which was usually a lot less than 50 % of the total cash needed. So maybe some unnecessary details, but it worked out well and helped me to scale because I had my dad that wanted to scale with me and could bring some money to the equation. Well, if you paid off all your properties, all the debt on all the properties, kept all the partnerships in place and those kinds of things, but you paid off all the debt, what would the cash flow be at that point for this portfolio?

38:52Off the top of my head, I don't think that. It would be substantially more because to grow, you know, in my growth phase, I took on a lot of leverage. So there's still a lot of debt involved in the real estate side of the portfolio. And I pay a lot to debt service. But what I can tell you is that with that debt pay down, right now, there's about$65 ,000 in principal pay down per year on that debt, just from making those minimum payments that the tenants are ultimately funding. Is this your full-time job now? It is. Yeah. For the past year or so, my full-time job has been kind of managing the real estate portfolio and also spreading myself into other kind of asset types and kind of rebalancing the portfolio, if you will, and a little bit less real estate exposure.

39:36That's kind of the goal. What year did you leave the military? I left the military in 2024. So yeah, last year. Okay. So you went directly from the military to full-time investor, essentially. Correct. Is that immediately after your five or six year commit or did you stay at any length of time over that? I stayed in about six months extra because we were expecting a child and it just kind of made sense to stay put for a little bit longer. What do you do for healthcare benefits? So I do, it is not insurance. It's called health sharing, but I use crowd health specifically for our health sharing needs.

40:11It's a lot more affordable. There's some different kind of risks associated with it or just some different considerations. But for our family and the way we value health and how affordable it is, it made sense for us. What does your wife do for work? It's mostly a stay-at-home mom. She does a little bit of social media management and marketing for a couple of businesses. One is her father's restaurant, and then there's another business. So she makes about$1 ,200 a month doing kind of those, I would call them sort of side hustle kind of social media type things. But mostly she's a stay-at-home mom.

40:41And we have a two-year-old and an eight-month-old. So she stays busy.

40:45Mindy Jensen:Yes, she does. That's very busy on there. So congratulations. I got two kiddos around the same age here as well. We have this full-time job as a real estate investor. We have$1 ,200 coming in from your wife. You are a real estate professional, I take it. Does the depreciation on your portfolio give you very low AGI in this situation? It helps a lot. This is the first year that I'm, or 2024 will be the first year that I'm a real estate professional because I wasn't able to be one while I was full-time in the military. And my wife also previously worked. So this is the first time that we'll be able to qualify for a real estate professional.

41:20And yeah, it'll be able to offset almost all of the income. I hope, you know, that's more of a question for my CPA, but that's the goal. I'd be really interested to see how that goes for you in the next year, especially if you keep buying lots of real estate and how you handle things like accelerating depreciation on properties you've owned for a while. Maybe that option exists in some of them. That'll be fascinating and really interesting. What does Tuesday look for you in this quasi-fire world that you live in as a full-time investor? Well, today's Tuesday. So this morning, I woke up early and I went and played pickleball.

41:50And then I actually stopped at the Boise River on the drive back home. And I jumped in the river and I came back and I sat in this here sauna for a little bit, had breakfast with the family. And then my wife and kids left to go to the gym. And I spent a few hours kind of working on real estate stuff and today preparing for this podcast. But I look at what's going on in my world in real estate and investing. And I spend some meaningful hours there. And then I usually wrap it up around three or four or so when the kids are done napping and go on walks or go to the park or things like that. Cook a healthy dinner and then usually chill on the couch to an episode of TV and go to sleep early.

42:28Pretty good Tuesday. Well, that's what's possible for folks. There's a lot of work that went into that. A heck of a lot of sacrifice, some luck and a lot of really good decisions and really smart investments that you made there. So congratulations on that. I'm jealous. I'm sure a lot of folks are about that. That sounds like a pretty good Tuesday. Thank you. I'd say a lot of luck, a little bit of sacrifice.

42:46Mindy Jensen:Yeah, that sounds like a great Tuesday. I like the go to bed early part the best. Thank you for sharing this incredible story. I think it's an inspiration to really any officer in the armed services that wants to go and repeat. Maybe there's some timing factors here. Maybe there's some really good deals that you got here. But somewhere along this continuum from having very little following your five-year service commitment to having something along the lines of what you've produced should be possible for many, many more officers. And that should be a goal of ours. All righty. Well, should we get out of here, Mindy?

43:14Mindy Jensen:That sounds like a good idea, Scott. Bo, thank you so much for your time today. Is there any place people can find you online? Probably the best way is on Instagram. I'm at realestateweb, W-E-B-B. It's my last name, at realestateweb. I posted kind of my journey there. And I wouldn't say I'm super active today, but I'm always happy to respond to messages. If you have any thoughts or comments on things we've talked about or want to connect, I'd love to connect as well. Awesome. All right. Thank you, Bo. And we will talk to you soon. Thanks for your time today. All right, Scott. But that was Beau, and that was so interesting.

43:47Mindy Jensen:I love the fact that he has strategically purchased his real estate, not looking to squeeze every single dime out of the profit. And I can't stress how good that is as a seller when somebody calls up, hey, are you willing to do seller financing? Sure. Okay. I want the rock bottom price too. Well, that's an instant turnoff. So he's using these ideas of like he's thinking outside the box and he's, what's it called? 4D thinking, he's thinking, or 3D thinking. I can't remember what the phrase is, but he's thinking about all the possibilities, all the benefits, not just, I got to get it for the lowest price.

44:22Mindy Jensen:And I think far too often real estate investors kind of focus right on that. I just think the outcome that he's created is absolutely phenomenal. I mean, this guy is a multimillionaire with the 10 ,000 plus a month in passive cashflow number easily, plus any amortization, plus any returns from the rest of his portfolio outside of real estate. This kind of situation, this kind of option is exactly why we do what we do here at BiggerPocketsMoney is every single person who has this, there's something good that's going to come from this, some contribution to the world, happier kids, happier family, healthier life.

44:52It's just fantastic to see. And I think that the lesson is that this is worth it, that the risks you take or the all-out approach that you take early in life can improve or go well in ways that you don't expect, whether that's in stocks, whether that's in real estate and these other areas. as long as you don't get in over your skis, as long as you're doing the fundamentals correctly of living way below your means and really investing yourself in whatever side business or rental property portfolio or work stream that can expand is going to look like. And I just love it. I think it's a fantastic money journey.

45:25Mindy Jensen:I do too. I love that he's taking advantage of all the opportunities that he has. And I think everybody has different opportunities that they can take advantage of. And I don't want to say exploit, but I almost want to say exploit. Right. And, you know, your opportunities, Scott, are going to be different than mine. Mine are going to be different than Bo's. But you take advantage of what you can take advantage of. And, you know, you can get so much farther by just tweaking these little like he's not doing anything illegal. He's taking a loan. What is it? A career starter loan. And he did take a trip, but then he also used it as his cash reserves and as to invest.

46:00Mindy Jensen:I think that's awesome because he's got this opportunity to have a point seven five percent interest rate. And, you know, anybody in the military who wants to get ahead needs to go back and listen to this episode again. I think a two part open ended question that I look forward to exploring with you in the next year or two, which is the FIRE community, or at least the BiggerPockets money community is clear. They like the golden ratio portfolio. They like low cost index funds for their purposes. But what they really want is they want to keep growing post FIRE. And they want a portfolio that allows them to do that in a way that they'll feel great about.

46:36They feel great both about sustaining a baseline level of spending, a baseline level of fire, and they'll be able to see their net worth grow. And I think that's the question that we now need to answer is what does that look like for a traditional or passive portfolio in the stock, bond, gold, whatever world out there? And what does that look like once we think about layering in real estate into that equation? And I think those are the two questions that emerged for me from this that will be really worthy of exploring over the next year or two.

47:05Mindy Jensen:Yeah, that'll be fun to brainstorm with you, Scott. I think this is more closely aligned with my goal as well. I do want to spend more of my portfolio and I have and will continue to build out this golden ratio portfolio, but I'm not sure if spending the maximum amount for the rest of my life is actually my goal for my personal net worth. I'm not sure it's yours either, Mindy. It is not my goal. It is my goal to be able to afford all the things that I want. So let's help Beau figure out his goal. And then in the meantime, let's pose that question and see what folks come back with. We'll be reviewing the YouTube comments or you can send emails to scottatbiggerpocketsmoney.com and Mindy at biggerpocketsmoney.com if you've got ideas on how to answer this question.

47:44Mindy Jensen:Awesome, Scott. Should we get out of here? Let's do it. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench. I am Mindy Jensen saying take care, polar bear.