How a 39-year-old was able to buy 21 rental homes and retire earlier

  • Tom Brickman, 39, currently owns 21 rentals and recently quit his 9-5 job.
  • He has built his portfolio over 18 years and insists on the importance of building sustainably.
  • He prefers properties to renovate and invests heavily in his real estate investments.

When 39-year-old Tom Brickman bought his first rental home, it was in 2004 and he was just 21 and earning $8.50 an hour working at The Gap.

The property was a $90,000 two-unit home in Ohio, which public records confirm. He inherited from a tenant in the downstairs apartment, who was paying $600 a month in rent. Brickman was living in the upstairs unit himself, which allowed him to purchase the property as his primary residence with just 10% down payment at an interest rate of 6.875%.

He didn’t have much to lose, earning just $8.50 an hour in retail, but he was enrolled in a stock purchase program with Gap, which eventually allowed him to accumulate approximately $9,000 of equity. Brickman liquidated his Gap shares and used it to make his down payment.

“The stars really aligned in that moment,” Brickman said. “That was one of the benefits of working with them.”

Over the next 18 years, Brickman purchased 20 more rentals between Dallas, Texas and Toledo, Ohio. He talks about his online real estate investing journey under the moniker The Frugal Gay, telling other aspiring real estate investors how he built his portfolio.

After working at The Gap, Brickman got a job at a movie theater, where he worked for nearly 16 years before deciding to retire from the 9-to-5 job last January.

“I always try to point out that I had a very average salary while I was buying these houses,” Brickman said. “I started with $32,000 a year from movies and right before I left my salary was in the 70s. I never made more than $100,000 a year from movies or anything like that. “

The reason Brickman wanted to quit his job is because he felt he had become so busy with other obligations in his life – like his real estate portfolio he’s building up and his rush to sell things on eBay – that he hasn’t seen how his 9 to 5 fits more into his life.

“I fill my calendar with things that are important to me,” Brickman said. “I can hang out with my grandma for a week in the middle of summer during the busiest time at the movies, and I never could have done that before.”

Brickman said some readers of his online content had pointed out to him that he wasn’t really “retired” if he was still busy with his business and earning an income from it, but he said that more importantly, he had “transferred my priorities to this question.

“I don’t have a boss around my neck, and the unnecessary drama that ensues,” he added. “I don’t work nights and weekends in a movie theater.”

Being in the real estate space is something Brickman actively enjoys.

“I like to build my wealth this way. I also have favorite tenants that I like,” Brickman said. “One of my cash tenants gives me vegetables from her garden every time I pick up [rent] Retrieve. I love being in this space; I see the benefits of building wealth this way.”

Brickman said as his portfolio grows, he will look for ways to give back in the future, including turning one of his properties into a hospice for LGBT seniors who have nowhere to go. the end of their life.

“It’s a really big old big house,” Brickman said. “It’s been on my vision board for a while.”

One of the things Brickman really emphasizes in his story is that his growth in real estate was sustainable and it took him 18 years to accumulate the 21 properties he currently owns.

He said he knew there were other investors who were able to build much larger portfolios at a much faster pace, but preferred to keep liabilities low and invest in “superior restorative” properties. “that he saw long-term potential. in.

That said, several of his property purchases have been made over the past year and, at the time of this story’s publication, Brickman is currently collecting rent from 17 properties.

According to documents reviewed by Insider, he earns about $15,700 a month in rent and average profit of about $7,400 a month — excluding income from a property that is a short-term rental listed on Airbnb. and has a more seasonal gross income.

There are four things he shared with Insider that he says helped him get to the position he is in today.

1. He learned a lot from his father who was also an owner

Brickman’s introduction to real estate came from learning the trade from his father, who owned a rental property when Brickman was growing up in Ohio.

“I used to go over there and collect rent with him,” Brickman said. “We would also go there on weekends and paint together. But he didn’t have a huge portfolio at the time.”

Brickman’s father is the one who encouraged him to buy his first property with his Gap shares when he was just 21 years old.

“I just didn’t want to keep paying rent back then,” Brickman said. “It was 2004, and I was paying between $400 and $600 a month at the time.”

His father convinced him to buy a duplex to live in and use the rent from the other apartment to pay the mortgage.

Brickman’s grandmother is also a real estate agent and used to accompany him when he was looking for new properties to buy as well.

2. He bought properties that other investors ignored

Brickman focuses almost exclusively on fix-ups and said he hates buying “move-in-ready” places.

“I really like transforming [my properties]”Brickman said, adding that his” most difficult project “was a hoarder’s former home.

“It was also my most successful project,” Brickman said. “It’s a 4-bedroom, 2-bathroom house just outside of Dallas, and it’s been hoarded to the ceiling.”

According to Brickman, the project required 11 dumpsters to empty the house, and that it took him a total of 6 months from buying the property to installing a tenant.

“It was exhausting, but it was also very exciting,” Brickman said. Besides helping him feel fulfilled, it also helps Brickman save a lot of money.

“I was buying a lot of stuff that other investors didn’t know about — I started with the ugly apartments,” Brickman said, referring to some purchases he made in Texas about 12 years ago. “I bought a condo for $14,000 cash. The cheapest was $9,000.”

Although normally unknown for a condo worth $9,000, Brickman said the property was a foreclosure he paid for in cash.

“I don’t think I’ll do that again,” Brickman said. “But it was a crazy experience.”

Once Brickman has repaired the properties, he can rent them out for much more than their original value.

3. He built a strong team of contacts to help him grow his business

Especially because he’s so focused on fixing fixer-uppers, Brickman said it’s really important to have a team of people you can rely on in order to keep growing his real estate portfolio.

In Brickman’s case, he relies on the help of plumbers and electricians to repair his properties.

“Having a network of people that you know can do the work for you and not disappear with your money is huge,” Brickman said, adding that’s why he won’t be buying properties. in places it does not have. t have connections. “I need to have systems in place.”

In addition to contractors, Brickman also said it’s important to have very good relationships with real estate agents.

“I’m not loyal to one realtor in Ohio or Texas, but I have a few really good ones,” Brickman said, adding that realtors he has relationships with will call him often. personally and ask him if he wants to see certain properties before they go on the market.

4. He uses credit unions and doesn’t go into over-indebtedness

When it comes to being a real estate investor, Brickman also said that having financial systems in place is really important and he would much rather use a credit union than go to a big bank.

“I’ve had a good relationship in both states with the credit unions and I find it so much easier to work with them,” Brickman said, adding that these credit unions often save his paperwork so that he doesn’t have to download everything again every time he tries to buy a new property.

Brickman also said that in credit unions you are more likely to form a real relationship with the creditor and the process of applying for new places can be a little easier than going to a big bank where you pays less attention to the individual. seekers and buyers. A local lender may be more likely to pick up the phone and return calls in a timely manner compared to nationwide lenders and mortgage originators.

The importance of having a good relationship with your creditors was made clear to Brickman after he tried to buy his fourth property in 2009, just after the housing market collapsed during the Great Recession.

“I’ll never forget an underwriter who asked me why I spent $59 at the 99-cent store,” Brickman said. “When I went through the process in 2004 and 2005, it was like, ‘Sign this piece of paper, here are your keys, enjoy!’ – and then in 2009, it was so different.”

He also makes sure not to go into over-indebtedness. Brickman has built his portfolio slowly over the past 18 years, and according to documents reviewed by Insider, he currently has far more assets than liabilities.

“I actually only have two mortgages on my 21 doors,” Brickman said. “I remember at the start of COVID I had these two mortgages and I was like, ‘Okay, if I collect rent from three people, I’ll be fine.’ I know I’m growing slower than many other investors, but that’s where my comfort level has been.”

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