I Had ZERO Experience and Replaced My Income with Real Estate

0:00This investor went from buying a single property to owning multiple apartment complexes and cash flowing$7 ,000 per month, all in less than 10 years. Peter was working a dead end job in 2018 when his brother suggested fixing up a house that was about to get foreclosed on. A year later, they each made nearly six figures. And then Peter was hooked on real estate investing and was willing to do whatever it took to build a profitable portfolio, including sleeping in his truck for several weeks while renovating a new property. That dedication has paid off with nearly a 3x return and a repeatable new investing formula.

0:39Let's hear exactly how Peter makes these deals work.

0:48Hey, everyone. I'm Dave Meyer, head of real estate investing at BiggerPockets. And on this show, we teach you how to achieve financial freedom through real estate. Our guest on the show today is Peter Fyfe from Provo, Utah. Peter started investing with just a single triplex and co-called more than 20 lenders to find funding for that first deal. Today, he's able to clear a million dollars on some individual deals. He scaled up by getting creative and hustling to make deals work that other people overlooked, enduring a lot of short-term discomfort to achieve long-term success. Peter did all this by going all in.

1:27He burned the boats. And it's not for everyone, but this is a super inspirational real estate journey that's only getting better. Let's bring on Peter. Peter, welcome to the BiggerPockets podcast. Thanks for being here. No, thanks for having me. I'm excited. Yeah, this is going to be a great show. Let's start by hearing your background. Who are you? Where do you live? And how'd you get into real estate? I lived in Manti, Utah, farm town. Not a lot of access to real estate, not a lot of stories there. But I started out in real estate because I was kind of at a job that I didn't want to be at for the rest of my life.

2:00And I had an opportunity to kind of fall in my lap with my brother and went from there. And where were you at that point, both financially and professionally? Were you working? What were you doing with your time? I was an intern working for a company that I was staffing and recruiting for them. I was happy to have the job. They eventually moved me up to a salary of making like$40 ,000 or$45 ,000 a year. So not really a ton there either. But it was while I was at that job, my brothers actually worked there as well, that one of my brothers came to me and he had said, you know, hey, there's this opportunity of a triplex in the area.

2:34I have terrible credit. You have great credit. I have money. You don't. Let's kind of go in on this together. We'll use your credit, my money, and we'll see if we can flip this thing together. So that's kind of how it got started. Okay. So it was a triplex in your own area? Yeah. And how did he come across this? He was living in the same city. And I think as he was walking along, he just kept passing this triplex that was in terrible disrepair. And it turns out that the owners were kind of in the middle of a nasty divorce. And so they just needed to liquidate the property. And he happened to be there at the right time.

3:02What year was this? This was in 2017. Okay. So we walked into this triplex and it was, the walls were brown. We thought that the owners had just painted it brown. We're kind of walking around, knocking on some walls, It's like an old pioneer home. And after about three minutes of us faking, like we knew what we were doing, we both kind of turned to each other and we were like, dude, we're screwed. But you had already bought it? Yeah, that we bought the house. We're like, we don't know. We've never even installed a toilet. We maybe painted a couple of walls. Like, what the heck are we doing? Like, it was crazy.

3:30I think that that moment of panic is ubiquitous across all real estate investors. I don't know people listening. I honestly still have that sometimes when you buy something, you're trying something a little bit new where you have that moment of panic. I want to hear how you got through that, but curious first on just sort of the details of the deal. How much was it and how, given that you were starting, one of you low credit, one of you not a lot of money, like how did you actually structure this deal and close on it? Yeah. So we found a local credit union that was willing to do a 10 % down payment investment for an investment property.

4:03So he was able to front that with my credit. So we bought that think for$240 ,000. We did all of the work ourselves, like literally everything. We got it all checked by inspectors and whatnot. It was all done well. But after all was said and done, when we walked away, we sold it for$420 ,000. Wow. Yeah. We each made a good amount of money on that one. And the goal was always to flip it, not to hold onto it. Yeah. Always to flip it. And I had no idea about holding real estate properties. I was just kind of like, man, this is an opportunity to make more money than I'm making right now in my job.

4:34So. So you weren't like, oh, I'm on the financial freedom path or at that point, at least you're just kind of like, yeah, you know, making a couple grand, it sounds pretty good. Yeah. And I do remember after closing, signing the paperwork and then I saw the money hit my bank account and I was like, holy smokes. Like I just made more money on that than I will in like almost two years of work. How painful was it though? You had no idea what you're doing by your own admission. Was it, how steep was that learning process? Yeah, it was brutal. So we would work our day job until 4.30, we'd come home, kind of, I'd give my wife a kiss, shove down some dinner.

5:13And then he and I would be working from probably 5.30 or six to midnight every night for that entire year. And like his kids would come by and say hi to him, but we were working every night. So we maybe had like a few days that accumulated maybe a couple of weeks throughout the year off, but like, yeah, we were working every night how did you go about learning how to do this if you'd never done it yeah youtube university yeah that's what i figured you'd say you just like pick the project that night you're like how to drywall yeah how to put in toilet oh yeah okay there's a wax ring under this thing okay cool okay what was the hardest thing uh uh rats oh no that was the nastiest thing so yeah we had found buckets of like these rat traps that the previous uh occupiers yeah yeah so we had like like eradicate the place with rats.

5:58I think scrubbing down the walls, we thought they were brown. Turns out they're white. They were brown because of the nicotine that had been smoked inside of them. Oh my God, yeah. I've seen those kinds of houses for sure. But man, Peter, you are not doing a good job selling the idea of real estate. I mean, the check sounds good, but you're making this sound miserable. You're laughing though. I know it's hard when you do it, but like looking back on it, it sounds like it was worth it, right? Oh, it's so worth it. I mean, to be honest with you, as of a couple of years ago, So my wife and I could have retired.

6:28Oh my God. We could have retired and maintained our standard of living. Our standard of living isn't phenomenal by any stretch of the imagination. But I mean, if I were to die, if I were to have died two years ago, my wife and kids would have been able to maintain their standard of living forever, which was really awesome. Well, that seems super motivating. I mean, you just took a huge swing right out the gate. Yeah. Probably one of the hardest possible approaches to your first deal, buying it yourself, working with a partner, which is great, but neither of you really have experience in this and doing a full rehab, doing all of that DIY, but you did it and you made it work.

7:00So where'd you go from there? Were you in on rehabs or did you change your approach? Yeah, I was definitely in on rehabs. I had, uh, I kind of got that first shot of, of, of that high that I got when I walked out of that. And I was like, man, this is, this is what I'm going to do. Um, my brother had kind of stepped away for a bit. And so I just kind of like, okay, I'll, I'll do this on my own. I found a property that was super cheap, um, Selling for$212 ,000. I thought that it would need maybe$30 ,000 of money into it. And I could sell it for like 320. Okay. And it was a mess. I didn't have any money still.

7:32Can I ask what happened to the check? Yeah. So that check went into us buying our home. Oh, no. Okay. So just quality of life, wanted to support your own living. Yeah. And so I ended up going on Google Maps and I typed in money and lender. And I called every lender and money result that came up. And on the 21st phone call, I got ahold of somebody, told him the deal, somehow convinced him that I could fix a house by myself in six months. And these were hard money lenders? Yeah, I guess. I mean, this guy wasn't necessarily hard money lenders. This guy's just money. You don't even know? You still don't even know?

8:05You borrowed this person's money? You're just like, did you just meet him behind a 7-Eleven and he'd give you a bag of money? I never met him. He was like, yeah, here's my account number. Here's my routing number. And for the expenses of the remodel, here's my debit card. Just make sure all expenses go to the debit card. What? I mean, I guess he's the one taking on risk, but wow. Yeah. Well, there's a lot of risk on my side too. Cause I said, look, if I can't flip this in six months, then you can, then you can have my house. Oh, your primary. You put up your primary as collateral to a stranger on the internet.

8:33Yeah. If this dude is willing to give me his account and routing number and the deal is going to close, let's do it. And so he mailed me his debit card and yeah, I worked on that house all day, every day. I'm not going to lie. This is some shady. I'm sorry. I mean, I didn't know what I was doing. I just needed money. And so, yeah. And I call and that closed five months and 27 days later. Wow. Okay. Well, I want to compliment your hustle because that is awesome. I do respect the hustle. I know. Honestly, it sounds like you really made it work. We'll just, just a word of caution to our audience.

9:12And maybe don't just meet people on the internet who mail you your debit card. There are better forms of financing, let's just say. And I had no idea there were. No, I totally got it. I think at the beginning of my career, I did some stuff I would not recommend to our audience as well. I just, you know, in the spirit of hustle, you sometimes do something. But luckily, I think in today's day and age, we've evolved this industry. There are a lot of hard money lenders. There are private money lenders. or people that you can meet through the BiggerPockets community who maybe at least have reputation that you can check out, make sure that they have all the right paperwork in a row of that kind of thing.

9:51Absolutely. That's what I did moving forward was someone was like, hey, you should go on BiggerPockets, check out their lenders. I was like, oh, okay. I didn't know BiggerPockets had lenders. And so I kind of went on there. What's a lender? Yeah, that's kind of what it was like. And then from that point on, it was much more streamlined. I started doing several more deals and yeah, scaled up from there. Okay, so how did that, That second one, you said six months and you finished in five months and 27 days. How did that work out financially for you? That one I made, I think it was$42 ,000 on. Oh, nice.

10:22Amazing. Which again, I was happy with. And I think more importantly, it started giving me a good track record so that when I went to those hard money lenders, I could say, yeah, I've done a triplex. I've done this house now and I've done it in the time that I've said I would do it at. And then they became much more willing to lend to me. Yep. That's the perfect way to do it. And you did all the work yourself again. But without your brother. Without my brother. Yeah. So I did all of it myself. And I learned that the first go around for me, I'm guessing this is similar for everybody, but the first go around for me is arduous and slow.

10:51But then the second time around, I mean, it was easily twice as fast. So much easier. Yeah. There's just so many hurdles and research you have to do and mistakes. And you have to drive back and forth to Home Depot nine times in one day. And that's just your life for a little while. Oh my gosh. And you were working full time. right? At this point I had left my job. Oh, we're expecting our first kid. Okay. Everyone thought again, thought I was nuts for leaving my job. And I did. Um, yeah, about two months away from, from our first baby being born. And was that just because you were at that point bought in full send on real estate?

11:28For me, my decision came as I've always wanted to work for myself. I've seen people that are business owners. I've admired them. Um, but I was terrified of starting a business. And I just thought, man, I've done this now a few times. This is now giving me a good financial cushion. I'll keep doing real estate while I try to start other businesses. And so that's what I did. Every home that I flipped would translate into a business that I would try to start, which inevitably failed. And I flipped another home and I would fail that company. I failed enough to where I do have a couple of companies that are now working really well outside of real estate, but there's a graveyard of failed companies in the past.

12:05There's no shame in that at all. I mean, starting businesses is really a brave thing to do. And personally, I think the best path to financial independence is owning your own businesses. And sometimes they don't work. They are high risk, high reward propositions. One of the reasons I love real estate is it offers a lot of the reward without a lot of the risk because it's sort of a proven business model. But I have also started businesses outside of real estate. Some of them have done okay. Some of them have failed. That's just the game. And the beautiful thing about it is that with real estate, if your business does do well, well, that money is going right back into real estate.

12:39And so that's kind of what I've done. So it's been, it's been a bit of a journey. So I've started like an, yeah, a baby bottle company, which has been interesting. Really? Yeah. And I've started like a AI property management company, which just started and it's just, it goes all over the place. So, but all that's been funded by real estate. All right. Well, I want to hear how your real estate career evolved after that second flip and after you quit your job. But we got to take a quick break. We'll be right back. They say real estate is passive income. But if you've spent a Sunday night buried in spreadsheets, you know better.

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17:43Welcome back to the BiggerPockets podcast. I'm here with investor Peter Fyfe talking about how he quit his job right before he was having his first kid in the middle of doing a DIY flip on his second deal. Sounds like that deal worked out. But now you're, you know, you have your first baby. You now are full-time in real estate. Where do you go from here? Around the second flip, I started realizing, man, I need to start creating passive income. I'd listened to a lot of bigger pockets. I'd heard about the Burr Method. And so with every flip that I did, I tried to divide the the money that I made from that into two different properties, one that I would hold on to long-term and then one that I would sell.

18:21I like that approach. And that's kind of, that's kind of how I did it. So I would make$40 ,000. I'd find someone that would need a$20 ,000 to buy the property that I'd hang on to. And then$20 ,000 for down payment for the, uh, for the flip home. Okay. So you would rehab two properties essentially. Yes. You couldn't be doing both yourself at that point. No, I was doing, I was doing, yeah, I was doing both myself. So it was very much, it's like the ones that were like multifamily, like the duplexes, Those would be the ones that I tried to buy and hang on to. They needed light remodel work, like new carpet paint, very much cosmetic.

18:51The really heavy flippers, those needed some serious work. And so I devote most of my time to those. But initially, I would get this property turned around or this duplex turned around as fast as I could so I could get your renters in there and start cash flowing. I mean, you must be good at this because I bought my first deal, had that same moment where I walked in and I was like, what am I doing? I do not know how to do this. and then my experiences after that only confirmed i don't know what i'm doing when it comes to renovations like i'm not good at it i am modestly handy i could do a couple things but i am not renovating or flipping a house by myself so you must have either a natural ability for this or i would imagine you've come to like it or like how did you how did you go from nothing to being so good at this it was just the pressure putting food on the table i mean kind of kind of like But I was saying I was taking part of that money to try to start a company that would fail.

19:43That money's down the drain. And it's like, shoot, I've got enough money to feed my family probably for the next six months. This flip has to work. And it's only going to work the way I want it to if I'm doing it myself, which I grew out of. I started doing bigger deals and I hired. I now have a team that does all of my work for me. Yeah. I mean, it sounds like you went with, I don't know if you've heard of this book. There's this book called Burn the Boats. It's kind of like this idea that you sort of like give up your plan B because then you're all in on plan A and you put the pressure on yourself to perform.

20:16It sounds like you subscribe to that philosophy. Absolutely. I procrastinate until the last minute unless I can't procrastinate. And so for me, it's like, well, the boat is burned. There's no choice to procrastinate. I just have to perform. So you mentioned that you now have a team. At what point and at what scale did you go from doing it yourself to hiring out some of the work? So I started realizing these flips are great, but they're not giving me enough passive income that I want. And so at this point, it was very much passive income heavy of what I wanted. And I couldn't afford properties in Utah.

20:50Prices just spiked in the early 2020s. And so I started looking. I created a spreadsheet of like 80 of the fastest growing cities in the country. And I did all this research on what the best investments would be. I love it. That's my favorite pastime. That's what I do for fun. It was brutal for me. This is my hobby. I hated it. I ended up hiring a VA from the Philippines and I was like, I can't do this. Dude, I would have done it for you. Oh man. What ended up happening is I found a deal of a dilapidated apartment complex in West Texas that nobody in the country wanted selling for$315 ,000. It was a 16 unit complex.

21:26So you found this in West Texas. Were you just looking for deals or did you identify West Texas and then start looking for deals? So I had seen that Odessa and Midland, they were having some good indications that they were growing. They're very oil dependent. Yes. And so I knew that was risky, but I had to pair that with the amount of accessible cash that I had at the time that I had. And in my experience with these lenders, it was very easy for me to get loans for deals that were one to four units. It was almost impossible for me to get deals that were five and up. Yep. That's common. Yeah. So what I learned was that, man, if I want to break into this realm, the only way to do this is if I buy this property cash.

22:00And so I sold all, burning the boats, I sold all of my properties in Utah. Whoa. Bought this thing cash and then blew down there, bought a truck for like a thousand bucks. Slept in the truck for a couple of weeks. Fixed up some units. Got some tenants in there. And then at that point I was like, this is ridiculous. I got to hire somebody. So then I found some contractors and they took over. Okay, well, I really want to hear the details of this deal because it sounds like, again, you're just going all in, hustling as hard as you can to make these deals happen. I want to hear more about it, but we got to take one more quick break.

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