Financial Freedom with Rentals After 3 Years of Pure Hustle

0:00This investor started with a single house hack. Three years later, he had more than 30 rental properties and was able to transition out of his demanding military career and into the life he always envisioned for his family. Now he's acquiring multiple new properties per year, but he spends most of his time leaning into what he calls the Florida lifestyle. This isn't some secret formula that you can't execute. It's the result of following a reliable, sustainable path to investing. Let's hear how it works.

0:35What's up, everyone? I'm Dave Meyer. I've been buying rental properties for 15 years, and on this podcast, we teach you how to achieve financial freedom through real estate investing. Today's guest is investor Taylor Wing. Taylor started his investing career when he was an active duty Army officer looking for the financial security that would allow him to leave the military when his service commitment was up. He started with just a single house hack and was able to grow his portfolio to more than 30 units across three different markets in just three years. That real estate investing has allowed him now to prioritize his family's lifestyle, live where he wanted, and to find a new career that's fulfilling for him at this stage of life.

1:21Taylor shared some of his story a few years back on this podcast on episode 677, but I wanted to have him back on the show because a lot has changed in his investing since then. He still has around 30 units, but many of those properties have turned over as he's looked to simplify his investing so he can spend more time with his growing family. He's still trading out and finding and acquiring great new properties every year, but he's found ways to do it with much less pavement pounding than before. These are really important skills that every investor needs to learn, whether you're just starting your real estate journey or you're in the harvesting phase like Taylor is.

2:03Let's bring them on. Taylor, welcome back to the BiggerPockets podcast. Thanks for being here. Good morning, Dave, and thanks for having me back. Yeah, this is gonna be a lot of fun. I hope that a lot of you have heard Taylor's first episode. It was 677 back in October of 2022. But for those who haven't yet listened to that one, Taylor, maybe give us a little bit background about yourself, how you got into real estate in the first place. Yeah. So just a quick cliff notes on me. Again, born and raised in California, pretty much straight out of high school, went to the academy up at West Point, was an army guy, commissioned, graduated in 2018, decided to be an artilleryman, went to airborne school, did the paratrooper thing.

2:44And then after about five and a half years, exited service. So last time I was on this podcast, I was still in the army, actually. And real estate was my side hustle. And we were in a heavy acquisitions mode. Didn't have any kids back then either. So I devoted all my spare time to real estate. And now where we are today is a complete 180. So lifestyle has changed a ton. Of course, we transitioned out of the military, started our family, and doing real estate full time. That's great, man. Well, congrats. It sounds like you've made a lot of progress. I'm curious, going to West Point, were you like originally thinking of having a career in the military, like long term?

3:23Yeah, that was, of course, the, you know, original game plan going into the academy, you know, trying to make it up the ranks as far as I could. But while I was in the service, you know, I read, of course, like everyone, rich dad, poor dad, got super heavy into real estate. I found some real estate mentors too, and started flipping houses, doing burrs, doing creative financing, some wholesaling, and just kind of fell in love with real estate. And real estate changed my life. So I'm super grateful. I found BiggerPockets and I found my mentors. It changed the trajectory of my life. So instead of doing a career in the military, of course, we did a big pivot.

3:59Well, that's amazing. Well, thank you for your service. But I totally understand whatever, whether it's military, corporate life, whatever. A lot of people read that book, Rich Dad, Poor Dad, get the bug and move into it. but it sounds like you found something you really like. We're going to get to what Taylor's been doing now, but I just want to catch everyone up to what he was doing in the beginning. So what was it like investing while you were still in the military? What kind of deals were you looking for at that point? Yeah. So in the military, we did pretty much any acquisition strategy you can think of.

4:31I did house hacking with VA loans, FHA loans, a lot of low down payment options. I was a government employee, didn't make a ton of money back then with a brand new butter bar, second lieutenant. We made decent money, but not enough to just start buying houses like I was probably buying maybe one a month at that point. You were buying one a month? How? A lot of low down payment options like sub two, seller finance, burr strategy using hard money loans with trying to cash out refinance on the back end. And of course, VA loans are a super powerful tool for all my veterans out there. where you can buy a property, zero down, live in it for a while, and then you can either flip it on the back end and pull that equity back out and get it into your next VA loan where you can hold onto it and keep renting it.

5:16I still have my very first VA loan locked in at like 2.7 % interest. Never give it up. Now I have so much equities built up after COVID, but the interest rate is so great. I don't know if I ever want to sell that. So when you were doing this, were you just buying where you were stationed at the time or did you pick like one hub that you wanted to be investing in? So I actually invested where I was stationed. So I was stationed in Fort Bragg, Fayetteville, North Carolina. So it was a great rental market and I love military markets. So I started investing exactly where I was and I was real grassroots with it.

5:51I was door knocking, you know, I was cold calling. I was boots on the ground. I didn't have much money for a marketing budget. So I was really hustling. My five to nine was really out there getting after it. I bet. Yeah. And so were you renting mostly to other folks in the military? A combination. Pretty much right off the bat, I hired a professional management company because it was just too much for me to keep on fronting the acquisitions, doing the management and still being in the army. So I pretty much hired a professional property management right at the gate, but definitely a lot of military families for sure.

6:24And my kind of niche in that market has always been single family homes, three bedroom, two bath typically, or if not more bedrooms. So it's perfect for your typical family is kind of what I always like to cater to over there. How long were you doing that when you were actually still in the military building up this portfolio pretty aggressively? Yeah, very aggressive. Really hustling for probably like a good four years while I was in the service. Yeah. And I had a service obligation. So I kind of set a self-goal that was like, can I make enough cash flow from this portfolio to match my government paycheck to give me that flexibility to transition out if I wanted to once my commitment was up.

7:05So that was kind of like my challenge I had set for myself back then. And how close were you able to get while you were still in the service? She made a little bit more from the passive than I was making from my paycheck. So luckily, it timed out perfectly to where maybe like a half year after my service obligation, I hit that number. And that kind of gave us that green light to look at our options outside of military service. Because at that point, my wife and I were looking to settle down, start a family and everything too. So the timing really worked out perfectly. And those years of sacrifice did end up paying off for us.

7:42Okay. So that was sort of like just some background. You were on the show back in October of 2022. What year or time did you actually transition out of the military? I transitioned out summer of 2023. Okay. So a little bit later. And did you just keep doing the same kind of real estate approach at that point? No, at that point I did shift and it was partially just because of our lifestyle and also because the market, if you remember around that time. Oh, I remember. Interest rates more than doubled. It got crazy. We got burned a little bit on some flips that were sitting out there. I had a lot of money out there.

8:14And so really after, once I transitioned out, I was still doing real estate, but I didn't really quite have a game plan. I got out and the same month I had my son. So I moved to Florida, got out of the army all the same month down here in South Florida. So I pretty much went straight into dad mode and the real estate gave us more flexibility to give me that time to spend my wife and the newborn. Well, congratulations on your family. That must have been very exciting. How did you pick another market? For me, I always invested where I lived because I like to touch and I like to feel like to be involved.

8:50And that might not be the best option for everybody out there, especially in high cost of living areas. But I went from Fort Bragg, I moved to Sioux Falls, South Dakota. So I bought a good handful of property out there. And then now we moved down here to Florida and I've been buying stuff around here as well. So I've always invested where I lived. When you went from North Carolina to Sioux Falls, what was different about that market and how do you adapt? So interesting enough, the property values in South Dakota were actually higher than they were in North Carolina. So the numbers for long terms back then were not super sexy.

9:26And we found an interesting niche because my wife was travel nursing back then. And Sioux Falls has two large hospitals, which kind of service almost the whole state right there in the central region of the city. So we kind of focused on that because there's a lot of travel nurse contracts that my wife was also being a part of. So we started buying small mom-and-pop multifamily within a certain radius around these hospitals. and then we kind of really tailored to that travel nurse midterm rentals strategy. So Fort Bragg, we catered to military family, single family homes, Sioux Falls, really kind of more smaller apartment, mom and pop catering to more of the travel nurses over there.

10:08Was that a big change operationally for you going from, you know, doing more of the midterm rental style thing? It was. That's when I got my wife more involved in real estate, whether she liked it or not. I finally got her on board. Before, it was just me kind of doing it all. And she kind of let me do my thing. But really, once I got her involved in the travel nurse side, kind of more hospitality-based a little bit. And she was a travel nurse, so she knows what travel nurses want and what they need. So she really helped me, and I brought her into the business on that way. Cool. Thank you for setting the stage for us, Taylor, and giving us a little bit of background.

10:47I want to shift the conversation and talk about when you moved to South Florida, What did your portfolio look like and what you've been up to in the last couple of years? But we do need to take one quick break. We'll be right back. Everyone, just a reminder, if you are listening to this, in the next couple of days, Henry Washington and I are doing our Cashflow Roadshow. So definitely follow along for all the content that we're going to be making. But if you are in the Chicago area, we have a free meetup on July 15th. And if you're in the Indianapolis area, we have a free meetup on July 16th. Make sure to RSVP because you got to do that before you come.

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14:28Welcome back to the BiggerPockets podcast. I'm here with investor Taylor Wing. Before the break, he was catching us up on his portfolio, how he got started buying while he was still in the military in North Carolina and then in South Dakota. Taylor, you said then, you know, sort of a shift in your life where you were going from being in the military to starting a family, being out of the service. You moved to South Florida. At that point, what did your portfolio look like? Back then, it was very similar to how it is now, actually. You know, we had roughly around 35 units. We're still around that number now.

15:01But what we really focused on now is life optimization and cash flow. A little bit before, I might have been more focused on number of doors, all these other arbitrary numbers that I was tracking. But really, it came down to just cash flow and lifestyle once we had a family because we wanted to make as much money as possible with the least amount of effort possible. I love that. Yes, don't we all? I don't care about doors anymore. Really, the other metrics, even equity, I know I appreciate and it helped in appreciation, but cash flow is king right now. So what we did was we kind of strategized.

15:41We looked at our portfolio. We really dove into the numbers, which I didn't really do before. And we were trying to see, all right, which ones are really working, which ones are not, which ones are our performers and not. And we just started moving money around, did some 1031 exchanges, got some better properties. And so we're at the same unit count, but I think we've implemented systems to make it run a lot better so we can maximize that passive cash flow that's ultimately helping us pay our bills and helping us live our lifestyle. Everything you just said we need to dive into because I think this is a really big topic for investors right now.

16:14A lot of people have fortunately built up some equity, built up a portfolio during the run up in all these prices. They have a lot of equity. And I get this question all the time. How are you rebalancing? How are you thinking about curating? So let's talk about that. But first, you just mentioned that cash flow is your goal. You had previously said, though, that you had already replaced your income from the military, which is awesome. What was your new goal and how did you set it? Do you have a specific cash flow number you're trying to get to or is it just maximize it indefinitely? For me, it's honestly just maximizing it indefinitely.

16:51and I did suffer from lifestyle creep because once I got down here, I wanted to live the Florida lifestyle. You buy a boat? Not a boat yet, but that's in the works, but got the biggest house I possibly could. I'm on the water down here on the intercoastal. You know, we built a pool and everything and did a bunch of upgrades. So, you know, we're really living the Florida lifestyle, but really just trying to maximize that number as much as we can. But I would say that we hit that level where I feel like we have a foundational level of financial freedom, where we feel comfortable paying our base level expenses.

17:30And so whenever we go out to work, we're just basically helping build that portfolio and saving towards whatever we want to do next with our lives, whether it's vacations or college funds, really anything. It's just helping us get to that next level. Because eventually, if we want to be at a level, we're past that. just we're paying all of our basic expenses to we're growing and we're really thriving. That's awesome. Very noble goal. I'm sure a lot of people relate to this that, yeah, real estate, great way to make money, but it is a means to an end. It's like, you know, money in itself doesn't buy you happiness, but it can buy you flexibility, which is a great way to get happier in my opinion.

18:06So I love that. But let's dig into this idea here of rebalancing your portfolio because this is super important stuff right now. You have this great portfolio. you said you like hadn't been really looking at the numbers. What were you doing? Just kind of like acquiring great assets and not really thinking about efficiency or like, what did you need to change? I was so focused on acquisitions. I would never pass up on a deal. So, you know, I was buying properties as fast as I could get as many houses under my belt as I possibly could. I mean, I would do it like a general cashflow, but once you've been operating a property for at least a year, you can really look back at your expenses and you know, how much you've been spending on the property versus how much income it's generating and kind of just really look down your pro formas and make those decisions.

18:54So it's just something I didn't slow down before and really look at to optimize. And then once I slowed everything down and I was able to just look at the numbers and go, okay, it makes more sense. We have a ton of equity here. Why not move it into maybe some properties that'll perform a little better for us and help us make more cash flow? Can I ask how you logistically did that? Do you have spreadsheets or what was the actual process like for doing this? Because I think a lot of investors find themselves in a similar situation that you were in, where it's like you buy the deal, you see the cash on cash return that you're projecting, but then they don't actually go back and say, am I actually hitting that return?

19:33Or even if I'm hitting that return, is it as good as all the other deals that I'm buying or all the other deals I could go get on the open market today? What were the actual tools you used to pull this off? For one, we always had QuickBooks, but I'd never really looked at it. But what we did was we actually took some classes in QuickBooks to really learn how to use the programming. Oh, smart. And we also hired a great CPA and a great accountant that changed the game for me. Because before, I was just paying tax bills and I had no idea why it was that number or how we got there. But now I found somebody that we have strategy calls and we try to project what our tax liability is going to be and we get ahead of it.

20:17So then we start game planning. So when it comes tax season, we're ready for it. So CPA changed my life. A good accountant that sat with us and helped us clean up our books and helped us be able to pull the reports we need per property to really look at and see, okay, which ones are working for us, which ones are not performing as well. So I think those guys are really important to help you go get to that next level. I don't think you need to invest a ton of money, maybe up front, because you're just getting your first couple properties. But once you have a sizable portfolio, those guys are going to save you so much money.

20:51And they're going to help you make those executive decisions. Absolutely. That's a great way to do it. I think this is probably one of the most underrated things that investors should be doing. I try and do this personally, quarterly. I just take, you know, not sometimes I'm not that good about it, but at least annually, I should say I try and do it quarterly, but just update what's going on in your portfolio. And I built this spreadsheet. It's actually part of my book. If anyone has read Start With Strategy, you will be able to download this or maybe you've seen this. But I created this spreadsheet that after you get that information, either from your accountant or if you do it yourself, a way to just sort of side by side, look at every property that you have.

21:32And I personally like to look at it as a bunch of different levels. So, you know, your equity that you got in it, cash on cash return is, of course, important cash flow. I like to do two things that I think are super important that a lot of people miss is one is risk. Like, how risky is this property? Because I want to see, are all my properties super risky? That's a problem. Are all my properties super low risk? That's also a problem because I'm probably missing out on some upside. And the last one I do is how much time each property takes me. because there's always a pain in the butt property.

22:04And when you look at these things side by side, you're like, oh, that pain in the butt property is actually making me the least amount of money. Like, why don't I sell this thing? This thing sucks. Or you're like, oh, this one is just amazing. I'm always gonna hold onto that. So I really, whatever tool you use, recommend people do this for yourself. So Taylor, when you started doing this, what jumped out to you? What did you learn? Yeah, what I learned, like you said, there's some properties that are just a thorn in your side that are just taking way too much time and attention away from you and costing you way too much money.

22:36I had a property. It was a cheaper one, one of the ones I first bought. The problem with it was just not a good neighborhood and just problem after problem. It was just like, get somebody in there, they destroy it, turning it over. That's 15 grand again. Oh, we got squatters kept breaking in. I gave the property plenty of chances because it was one of the first ones I bought to make it work. But after two or three iterations of this and going through maybe two or three different management companies. I love the idea of like giving the property a chance. Like it's the property's fault. But it is kind of true.

23:10It's like some properties just, they struggle. And you just got to get rid of them. And that's okay. Yeah, it takes someone with maybe a more peculiar set of skills than I had, or maybe that was able to deal with a lot more stress than I was able to deal with. So to me, it wasn't worth it. That's one of the ones I liquidated. and just move that money somewhere else. It wasn't worth the headache for me because I, you know, I have a whole, you know, thing I got going on with my life and I didn't want to just be a property manager. So. Was that hard? Because there is this narrative in the real estate investing community.

23:46It's like, never sell, you know, like I just buy and just never sell. Was it hard to sort of shift your mindset? I used to be like that. Maybe like you're taking a step back, right? Like, oh, like I, you know, worked so hard to get this property and now, you know, I'm selling it and you're paying, you know, an agent, probably you're paying closing costs. It kind of sucks. But, uh, after you see how much heartache you went through and you look over like your statements and you see like how much money that you've sunk into this thing, just rip the bandaid off, man. Yeah. I do it. I think it's, yeah, it's, it's a hard thing.

24:20Cause it's a new skillset to learn, you know, like you were mentioning, you were sort of just in acquisition mode, that's a skill that usually, and I think rightfully, people learn first. That's kind of what you need to do. But portfolio management, totally different skill and learning how to optimize your resources, optimize your time. That's where I think most investors get to. You get to that point, but it is a little daunting to learn how to manage that. I would love to hear how you have gone about managing that and how you've transformed your portfolio. We have to take one more quick break though.