Teacher ($44K/Year Income) FIREs in 10 Years Making the RIGHT Sacrifices

Summary

BiggerPockets Money Podcast Summary

Title: Teacher ($44K/Year Income) FIREs in 10 Years Making the RIGHT Sacrifices
Host/Author: BiggerPockets
Episode Release Date: April 4, 2025
Guest: Bryce Stewart

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Introduction

In this inspiring episode of the BiggerPockets Money Podcast, hosts Mindy Jensen and Scott Trench delve into the remarkable journey of Bryce Stewart, a public school teacher earning $44K annually, who achieved Financial Independence and Retire Early (FIRE) within a decade. Bryce’s story is a testament to strategic investing, relentless dedication, and making the right sacrifices to transform a modest income into substantial wealth.

Guest Background

Bryce Stewart joins the podcast with a background in education, working as a sixth-grade public school teacher while simultaneously venturing into real estate investment. His journey began in 2006 when he and his wife purchased their first property—a luxury condominium in Bethlehem, Pennsylvania. Despite initial setbacks during the 2008 financial crisis, Bryce's perseverance and strategic investments laid the foundation for his financial independence.

Early Investing Experience

Bryce's foray into real estate started with the purchase of a one-bedroom luxury condominium in 2006, financed through a connection with a developer. Initially optimistic, Bryce planned to sell the property within two years for a tax-free profit. However, the 2008 housing market crash left them underwater, owing $152,000 on a condo that was only worth $90-95,000. This financial strain revealed the true costs of holding onto the property, leading Bryce and his wife to reevaluate their strategy.

Notable Quote:

"We realized we couldn't sell it because we didn't have money to make up the difference in the note." – Bryce Stewart [03:15]

Financial Struggles During 2008

With combined salaries of approximately $44,000, Bryce and his wife faced significant challenges. The condo's monthly carrying cost was $1,400, while the potential rental income was only $1,100, leaving them short by $300 each month. This situation forced them to become landlords, renting out the condo despite the financial loss.

Notable Quote:

"There’s nothing wrong with being a teacher. But if that's the financial plan, you're not playing in a ballpark where home runs can be hit." – Bryce Stewart [08:25]

Turning Point with Purchase of Duplex

The turning point came in 2009 when Bryce identified an opportunity to purchase a duplex. By buying a duplex with an owner-occupied mortgage, he could leverage favorable financing terms. Moving into the property with his family, Bryce renovated the additional units to generate rental income. This strategic move transformed their housing costs from a $1,200 mortgage to $600, effectively living for free while generating additional cash flow.

Notable Quote:

"We were living in the property for free and making some extra money on top of it as well." – Bryce Stewart [22:44]

Scaling the Investments

Bryce didn’t stop at the duplex. He acquired adjacent properties, including a three-unit triplex, which further diversified his income streams. By refinancing and optimizing rental rates, he continued to increase his monthly cash flow. By 2012, with multiple properties in Bethlehem, Bryce and his wife were generating significant passive income, allowing Bryce to retire from his teaching job in 2015.

Notable Quote:

"In 2015, I retired from my job. We were making probably eight and a half thousand dollars a month in free cash flow off of our rentals." – Bryce Stewart [34:49]

Achieving FIRE

By 2022, Bryce had expanded his portfolio to 34 units across five buildings in Bethlehem, Pennsylvania. With a property manager handling daily operations, Bryce enjoyed approximately $27,000-$28,000 in monthly free cash flow. This substantial passive income enabled him and his family to achieve financial independence, reducing their reliance on traditional employment and allowing them to focus on personal growth and family time.

Notable Quote:

"I just need to devote a few more properties before I can spend like 10 hours a week making more money than I was making at a 45-hour per week job." – Bryce Stewart [34:49]

Lessons and Insights

Bryce Stewart’s journey underscores several key principles for achieving financial independence, especially on a limited income:

1. Strategic Real Estate Investing: Leveraging owner-occupied mortgages to acquire multifamily properties can create substantial cash flow.
2. Persistence Through Adversity: Overcoming setbacks like the 2008 financial crisis by adapting and seeking new opportunities.
3. Sacrifice and Discipline: Willingness to live frugally and make personal sacrifices to invest in long-term wealth.
4. Continuous Learning and Networking: Gaining knowledge from resources like "Rich Dad, Poor Dad" and connecting with experienced investors.
5. Scaling Thoughtfully: Gradually expanding the investment portfolio while maintaining quality and cash flow.

Notable Quote:

"Do what nobody else is doing now so you can live like no one else later." – Mindy Jensen [43:11]

Notable Quotes with Timestamps

• Bryce Stewart [00:00]:
  "Imagine transforming a modest teacher's salary into a pathway to financial independence..."

• Scott Trench [01:08]:
  "BiggerPockets has a goal of creating 1 million millionaires."

• Bryce Stewart [03:15]:
  "We realized we couldn't sell it because we didn't have money to make up the difference in the note."

• Bryce Stewart [08:25]:
  "There’s nothing wrong with being a teacher. But if that's the financial plan, you're not playing in a ballpark where home runs can be hit."

• Bryce Stewart [22:44]:
  "We were living in the property for free and making some extra money on top of it as well."

• Bryce Stewart [34:49]:
  "In 2015, I retired from my job. We were making probably eight and a half thousand dollars a month in free cash flow off of our rentals."

• Mindy Jensen [43:11]:
  "Do what nobody else is doing now so you can live like no one else later."

Conclusion

Bryce Stewart’s story is a powerful example of how determination, strategic investing, and the willingness to make significant sacrifices can lead to financial independence, even on a modest income. His journey from a struggling teacher to a successful real estate investor offers valuable lessons for anyone aspiring to achieve FIRE. Bryce emphasizes the importance of aligning financial strategies with personal values and life goals, ensuring that the pursuit of wealth does not come at the expense of personal well-being and relationships.

For educators, non-profit workers, and individuals with limited incomes, Bryce’s experience provides a blueprint for leveraging available resources, making informed investment decisions, and maintaining perseverance through financial challenges. His success reinforces the BiggerPockets Money Podcast’s mission: demonstrating that financial freedom is attainable for everyone, regardless of their starting point.

End of Summary

Transcript

[Mindy Jensen]

Imagine transforming a modest teacher's salary into a pathway to financial independence, achieving the impossible in less than a decade, and eventually working fewer hours per week than most people spend in a single meeting. Today's guest proves that you don't need a six figure salary in order to break free from the traditional work grind, but you do need to sacrifice and put in the work in order to compensate for that. Hello, hello, hello and welcome to the base BiggerPockets money podcast. My name is Mindy Jensen and with me, as always, is my love of learning co host Scott Trench.

[Scott Trench]

Thanks Mindy. Great to be here and excited to put another great show on the books. BiggerPockets has a goal, creating 1 million millionaires. You're in the right place if you want to get your financial house in order, because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting. And today we are going to discuss another situation from a teacher's perspective. Bryce, welcome Back to a BiggerPockets podcast. You were back last on the BiggerPockets Real Estate PodC a few years ago. We're excited now to welcome you onto the BakerPockets Money podcast.

[Bryce Stewart]

Thank you so much. I'm a big fan of both of you guys. I've been listening to you a lot on my Peloton treadmill.

[Scott Trench]

Oh, fantastic. I have a peloton as well and my username is at Bigger Pedals, so you can follow me there.

[Mindy Jensen]

Bryce, let's jump into your investing story. When did you first start investing? Investing in real estate, Investing in the stock market, however you first started.

[Bryce Stewart]

So in 2006, my wife and I purchased our first property. It was right when we first got married. We bought a luxury condominium, a one bedroom luxury condominium in Bethlehem, Pennsylvania. That's where she's from. That's where I moved as soon as we got married. And that was the first place that we bought again, luxury condo. We had a connection through some family to the developer who was creating these condos. They were in a retrofitted Bethlehem Steel building. It was actually a really neat project, but we bought in 2006 and my thinking was in two years I'll be able to sell and reap a nice profit, tax free profit, because we'll have been in for that for our two years and then we can take our profits and go elsewhere as our family grows or as our living situation changes. Of course, that sounds a lot sillier looking backwards than it did when I thought it. In 2006, I'm right there with you.

[Mindy Jensen]

I bought a beautiful house on a lake. Well, I bought a crappy house on a lake that I was going to make into a big, beautiful house in October of 2006. And yes, I was also going to move in two years and reap the rewards. That did not happen either.

[Bryce Stewart]

So fast forward 2008. We were pregnant with my. With my oldest daughter. And of course, by 2008, the sky was falling, especially in the condo market. And we found that a condo that we owed $152,000 on, similar units were selling for like 90 to $95,000. So we were completely underwater. And I was a schoolteacher, a sixth grade public school teacher. My wife worked for a nonprofit. And we realized we couldn't sell it because we didn't have money to make up the difference in the note. And we also, this was the first time we did the math on what it was costing us to hold the condo every month. We realized we couldn't even rent it out for what it was costing us to own it. We were going to be about $300 short even with the top level rent. And to give you the exact numbers, it cost us about $1,400 a month to carry the condo. And like, top rents at that time were like eleven hundred dollars a month.

[Scott Trench]

And remind me if we, if we zoom out, what were you, what was your income and expenses like?

[Bryce Stewart]

Personally, at this point in time, we're talking 2006 numbers. I was probably at 43 to $44,000 in salary. My wife was very similar, maybe low 40s in her compensation. So two nonprofit salaries, not making a ton of money. It seemed fine at first because it was all fun and games when it was two people with two mouths to feed and on two salaries. And we just looked at the condo fees and everything else as just sort of bills that we had to pay every month. We didn't really think of it as like carrying costs that were a part of the asset consideration as a whole.

[Scott Trench]

All right, would you say that that is a low cost of living, medium, medium cost of living or high cost of living area?

[Bryce Stewart]

I would say low to medium. It's gotten more difficult or the cost of living has gotten higher. It's Bethlehem is in what's called the Lehigh Valley. So it's Allentown, Bethlehem and Easton. It's the third largest MSA in the state of Pennsylvania behind Greater Philly and Greater Pittsburgh. It's about an hour and change west of New York City and maybe an hour north of Philly. You know, there's a robust local economy. It's seen a lot of growth in the last decade and a half, and it's a good area. It had low cost of living. It's like everywhere. It has gone up in the last number of years. And I want to pause here, though, because your listeners are hearing this and I just want to step into their world for a second. And I want to admit something about being a podcast listener. I hear people's stories on your podcast on other podcasts, too. And it's always like, it's one of two things for me. Either it's this rags to riches story and somehow they make it. They start investing in real estate and everything goes great for them. And I have to be honest, when I hear that, when I hear that, like, I think, well, if that was me, I wouldn't be able to go through what they went through. And I sort of immediately begin to detach from being able to identify with that podcast guest because I'm like, well, that would wreck me. I wouldn't be able to do it. The other kind of podcast guest is somebody who, it just seems like they've always been absolutely killing it. And then they're going to tell me what they've done and I hear their story and I'm like, I just don't think I'm as high functioning as that person is. I just want to condition my story with that and say, if you're listening to Scott and Mindy right now, I'm going to try to give this account in a way that it's stuff everybody can do or maybe can identify with, or if it's not, if it was a lucky break or something like that, I'm going to call it out and say, this part was lucky. This part is maybe not duplicatable for everybody listening right now. And this is maybe different than it used to be. Just so that when you walk away, you can have some actionable content, advice, whatever.

[Scott Trench]

I think that's really good feedback. And I think, I think that one of the observations I'd have. Let's stick with this topic for a second because I think it's really important and probably, you know, like you said, listeners will be really interested in this. But I think one of the issues that we find in a lot of FI journeys is that very few FI journeys start with somebody earning a less than median income, maintaining that for the duration of their FI journey, and then producing an outcome that the, the average listener wants. Right? Like most, the average listener for bigger pockets, money wants an outcome of one to two and a half million dollars at some point that is meaningfully earlier than their retirement at 65. And you're just not going to find a story of someone who had no advantages whatsoever in there with a very ordinary circumstance, who maintained the entire thing without an extraordinary savings rate. So the folks that you hear on the second part of your, your story there have something that happened to them, right? Usually it's the income goes up, right? Like the income goes up from 50 to $200,000 over the course of a 10, 15 year career, for example, or there's a couple of real estate plays or there's some lucky breaks, or there's an inheritance. Although those are, those are rare. Those folks tend to not want to share that story. Even that's a very common way to, to, to, to add wealth that comes in someone's 30s, 40s or 50s. And then the other, the other side of it is, like you said, there's, there's these, there' rags to riches stories out there that are incredibly inspiring in some ways, but also I can see why they could be demotivating in some cases. But the average story is much more like, I started in this position and I had a few advantages that I used to parlay towards my financial journey. And I think that's what we're going to hear today. The difference being that as a teacher, you likely didn't see your ordinary income skyrocket over that time period.

[Bryce Stewart]

To your point, if you're a teacher and you plan to remain a teacher for the entirety of your career, there's no such thing as a really good financial year as a teacher. There's no huge client that you landed. There's no gigantic commissions. There's basically no merit pay. If, if that's your financial plan, there's nothing wrong with being a teacher. We need teachers. But if that's the financial plan, you're not playing in a, in a ballpark where home runs can be hit. So that's the first thing I would throw out there is analyze your current scenario. You may need to change la, or figure out how you can parlay something that you're doing into something that, that touches large numbers, because that's going to be your shot.

[Mindy Jensen]

We are so excited to announce that we now have a Bigger Pockets Money newsletter. If you want to subscribe to the newsletter, please go to biggerpockets.com moneynewsletter all right, we'll be right back after this.

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[Scott Trench]

Yo yo yo. Welcome back to the show we're joined today by Bryce Stewart.

[Mindy Jensen]

So when did you first discover the concept of financial independence and start pursuing it?

[Bryce Stewart]

Yeah, I'll give you the first sort of inkling that I had and that was this. I was 23 years old. I had finished college with a teaching degree and I was back home living with my parents. This was in Westchester, Pennsylvania which is just outside of Philadelphia. I was renting my high school bedroom for my dad because I had a college degree and that's the kind of guy my dad is. So I was paying 300 bucks a month for both my parents, you know, living with both my folks and working this job. And I worked with another 23 year old who when he asked me where I lived, I said I live in my high school bedroom still. I was embarrassed to say it. I asked him where do you live? And he said, well, my college roommate And I bought a 4 UN apartment building in Norristown, Pennsylvania which is just outside of Philly. And he said we room together in one of those apartments and we rent out the other three rooms. Okay, so up until age 23 I'd gotten really good grades. I was pretty smart. I graduated with a reasonable degree, magna cum laude from a good school. And I'm being honest with you guys. I did not understand that you could make money from something besides your job until I was talking to this kid. I had seen infomercials on TV late at night. I always just thought that those were bunk or that those were snake oil. But this was a real life person sitting in front of me telling me something that they did that was making them money. And so it was undeniable. I couldn't say like, well that's just hokum. It dislodged my brain because I thought at the time, well, I chose my 19 year old self, chose elementary education as my college major. I'm stuck. Like my, my financial future is etched in granite never to be altered. And so that's where I was. I was like, you know, if I had wanted to make a lot of money I should have majored pre med or, or pre law or something like that. But here was this guy who I was working with who did that. And I didn't understand individual people could, could own apartment buildings. I knew that Jerry Seinfeld lives in an apartment on television and Joey and Chandler lived in an apartment. But normal people, I didn't think they owned it. So that was the first like my brain cracked open and I realized this guy's making money from the job. We're both working and he's making money from having invested in this quad.

[Scott Trench]

And what year was that conversation?

[Bryce Stewart]

That was 2002 or 2003. So this is before I got married. Yeah, it was right when I came out.

[Scott Trench]

And so four years go by before you buy the rental.

[Bryce Stewart]

Yeah, because it turns out people just walk up to you and offer you a four unit apartment building. It's not how it works. You don't realize it and then it happens for. You actually have to do a little digging. Okay. That was the first, like, let's call it the first mental domino was this is something that can be done. This guy is doing it. And I was smart enough that I asked him, I'm like, well, wait, isn't there a really large mortgage for something like that? He's like, yeah, I mean, we pay the mortgage with the rents from the other three units. It's not cheap, but like, we cover it with that. I'm like, what about like real estate taxes, homeowner's insurance, like the electric bill? He's like, dude, we pay all that stuff with the rents from the other three units. And I remember, I was like, wait a minute, so you're just living there for free? What do you do with the money that you're making from this job? He's like, stock market baby. And I was hooked. I cornered that poor guy in the lunchroom and asked him to tell me, like, who, who told you that you could do this and who explained it to you? And the rest is like every real estate investor, he brought in the book, Rich Dad, Poor dad gave it to me. I devoured it in like a day and a half. I at least understood the concept from a 30,000 foot view of owning assets that fund your lifestyle. That book's not very granular. It's just sort of like a good maybe what's possible kind of thing. But it was a good brain opener for me to start realizing, wait, I might want something like this to continue the story. If you want the total bio. I dinked around for a few years. I got married at age 26. That's when my wife and I moved to Bethlehem. So 2006, that's when we bought that condo. That's when we're underwater on it by 2008. And then 2008, we find out that we're pregnant. And it felt like a one bedroom condo was really not going to work anymore. And then we had this problem. Okay, we're underwater, we can't sell it. And if we try to rent it out, we're going to be losing 300amonth. So that was a rock and a hard place and we were stuck there at least in 2008.

[Scott Trench]

So how long did that continue? How long were you, were you stuck with this property?

[Bryce Stewart]

We elected to be become landlords to lose the 300 from owning the place. That was really the only option available to us. We mitigated that slightly by moving into a cheaper apartment that we rented out. So we were simultaneously tenants and landlords. And then that apartment we found like a decent one for like 850. And so it did lower our, in relative terms our cost of housing because we were going from the luxury condo down to this third floor walk up apartment that kind of offset some of the losses that we had with losing money on the condo. And then I just figured we were fried. Here's the rest of the story. When my daughter was born, she's four months old, third floor, walk up apartment. I come home from school, from teaching one day, I walk into the apartment, my wife is bawling her eyes out in the middle of the floor and my daughter, 4 month old daughter is crying in the crib. And I ask her what's the matter? She says, I'm pregnant again. When my wife was four months pregnant, we got pregnant with my second daughter. And I was like, we were in a two bedroom apartment. I was like, okay, now we're just officially fried. Like we can't make it work in this apartment with two kids. I still can't sell the place. I'm losing money. Like this has gone from bad to worse. A few weeks later, I'm playing in my head the conversation I had with that guy when I was 23. Okay, so it was percolating for a while. And I'm parking at a, like a stoplight and I see across the street from me a for sale sign. And then it's a on a row home in Bethlehem. And I see that there's two electric meters on the side of the building and two mailboxes on the front porch. And in my head I'm like, I bet that means it's a duplex. On the way back from work I called the number on the sign. The agent showed it to us. It smelled like cat and cigarettes and was not good. But we got on the an auto email with that real estate agent and she started sending us all of the multi or the computer started sending us all the multifamily listings that came up in Bethlehem. Eventually we found one that was just gorgeous. Another Duplex. It had a three bedroom apartment on the second and third floor combined. And then it had a one bedroom apartment on the first floor. And so to give you the numbers, this was the comparison. This is where it kind of all started. The gears started turning for me. It was going to cost about $1,200 to buy this duplex. That's P I T I. So principal, interest, taxes and insurance. And the apartment on the first floor was renting for $600 per month. So just my quick back of the napkin math was, okay, if we buy this place and it costs $1200 a month and the tenant's giving us $600 a month, our kick in only needs to be $600 a month. And since we were renting for 850, that seemed like a discount to me in terms of how much to budget for our own housing. So that's what we did. We bought the place, we started kicking in $600 a year. Later we turned tenants around and we were renting it for 750 on the first floor. We refinanced out of an FHA loan 15 months later and got to got the payment to 1100 and had tenants in for like 850, 900. And so we were living there for 200 bucks a month. Had our third daughter while we were living in that three bedroom apartment. And it felt like, okay, this is, I'm on to something here.

[Scott Trench]

What year is this that we're at the story? You emerge, you emerge with a successful house hack, refinanced. And it seems like that's the turning point where now the tide begins to turn and you can really begin to accelerate the accumulation.

[Bryce Stewart]

I still did not know my butt from my elbow in terms of investing. I just knew the simple back of the napkin math of we're only paying 200amonth towards our, our housing. So this was 2009, we bought that place, moved my daughter into it, had my second daughter in 2009, had my third daughter in 2011 while we were still living there and things were great. It's a gorgeous apartment. It's actually still like my flagship apartment. We don't live in it any longer, but I still own the place. I still have tenants there. And yeah, I thought, this is awesome. I've executed like you said, I've executed what I read about in this book and I've, in a miniature way done what this guy did who I met when I was 23. So that was step one. Step two was the place next door to us was a three unit, exact same outer shell of the building, like same superstructure, but it was just divided that there was an apartment on each floor. The tenants who were living there were just bananas, crazy. They were dealing drugs, they were screaming at all hours of the night.

[Scott Trench]

This is the next property. You're purchasing it in what year? And can we put, is this a rental investment or one that you're going.

[Bryce Stewart]

To move into the property next door to us while we live there? The tenants were crazy. So our neighbors were nuts. I approached the owner of that three unit and said, would you consider selling me this building? At the time, I figured it's a good way to protect the investment we've already made in this duplex by maybe controlling who the tenants were next door.

[Scott Trench]

That's nuts. You didn't like your neighbor, so you bought the house.

[Bryce Stewart]

The important part, though, is that we needed to move into it because the only way I could underwrite going into that deal was to get owner occupant financing. Again, I know you guys have said this before on your podcast, and I know it's probably common knowledge for a lot of real estate investors, but for a newer listener, I think the best investment deal out there, I mean, like, maybe the best investment deal in history, is when you can use an owner occupant mortgage to buy a multi, multifamily building. So a duplex, a triplex or a quad, because you can get access to the sort of sweetheart financing that comes with owner occupant purchase, but you're buying something that will eventually be an investment grade asset. So I'm a big fan of doing that. And we did it initially with an FHA loan.

[Mindy Jensen]

I want to jump in here and just clarify for anybody listening. Bryce moved into this property as an owner occupant. He didn't just say he was going to do it, he actually did it. If you don't intend to move into the property, that's mortgage fraud. That's a felony punishable way up to 30 years in prison, which is 30 years more than I want to spend in prison. So, yeah, you are absolutely right. It is totally legal to buy a property with an owner occupied mortgage, live in it for 12 months, which is what your loan says you have to do, and then you can move out and rent the entire property out. That's legal. What's not legal is buying it, saying you're going to live there, and then just saying, well, I'm just lying to the bank. What's the harm in it? Well, it's a felony yeah, that's not.

[Scott Trench]

The kind of living for free that we want to emphasize here at BiggerPockets Money.

[Bryce Stewart]

I was always highly conscious of that, that I, I want to do it the right way. I didn't want to be looking over my shoulder. So we in fact moved into that three unit, into a worse and smaller apartment in that three unit with three kids. And I spent the next year fixing up the other two apartments, making them nice. I mean I was teaching, I was getting up at 6am I was going in, prepping for the day, teaching, coaching, cross country, coming home at 5, doing dinner with my three daughters, putting them to bed at 8. And then from 8 until 1 in the morning I was going up and working on the other two units in this triplex to try to make them ready to rent out for a whole year. And I told my wife, look, give me a year of this and I promise we'll buy like a normal house. We won't be doing this forever. This is just to get us set up. And that's what we did. We, to give you numbers on it really, when we walked away from those two places, now this was with the interest rates of like 3% or 3 and a half percent. The second one we bought in 2012. So again we had moved in 2009. Three years later we buy the place next door. 2012, we renovated the unit that we moved into, then we moved into it and then I renovated the other two units. But the place we had been living in was cash flowing about $1200 a month to us when we moved into the triplex. So the duplex is throwing off 1200, it's paying the mortgage. The principal and interest, taxes and insurance are pretty close to it for the triplex. So we're kind of living there for free. And then as I fixed up the second floor and third floor and rented those apartments out for $1,000 each, now all of a sudden we're living in place for free and making $2,000 from those two apartments. And that was, I think, I would argue that's when I really reached the level of what that guy was at, who I met when I was 23 because we were living for free and making some extra money on top of it as well. The problem is we were living with three kids in a two bedroom apartment.

[Scott Trench]

In the bottom unit.

[Bryce Stewart]

Right in the bottom unit. Correct.

[Scott Trench]

I believe that this is one of the, what one of the moves you must make to a certain degree. You could have alternatively, in a different reality done this with a live in flip and had a similar, potentially a similar outcome in it with different lumps in terms of cash flow or profits. And there you wouldn't. It wouldn't have been a steady stream, but it might have been a similar profit level with it. But I believe that for someone in that circumstance, as a teacher with three kids in there, you must do something like this or there must be a crazy side hustle if you want to pursue financial independence. And very few people will do it out there. And I think that it's a requirement in order to get on the other side of it. Do you agree with that?

[Bryce Stewart]

I do agree with it. I want to be very realistic. There was a mix of two things. One, I hustled, Okay? I just told you guys that I'm coming home, I'm staying up late, I'm doing renovations, I'm seeking out a landlord and trying to buy stuff off market. So there's an element of hustle, Okay, I deserve credit for my hustle. But there's an aspect of it too, that was just fortuitous. One, interest rates were low. Two, I miscalculated how much money it was going to take to renovate that three unit. And we ended up needing to borrow money privately from a family member who had a home equity line of credit. They allowed us to just borrow. Like, they gave us the money and we paid them the floating cost of their home equity line of credit to finish this triplex. And then as soon as it was completed, I went and got another owner occupant mortgage. You know, we essentially bird out of it. And I paid back their private money. So it'd be very easy for somebody who doesn't have access to a family member with a home equity line of credit and a willingness to bet on you to say something like, must be nice, dude. You had access to, you know, whatever it was, 30, 40 grand. Not everybody is so lucky. And I freely admit that's true. Not everybody is so lucky. But it took a combination of one, asking for that, understanding how kind of the liquidity of it works, understanding post renovation appraisal, being able to give reasonable assurances to that family member. Like, we're going to be able to reimburse you as soon as we get this place reappraised, because it's going to. It's going to really go up in value.

[Scott Trench]

I'm sure also that I'm living with my wife and three kids in the basement unit of a triplex to save money I could lose. But, you know, like, is there a more Is there a more hustle I can demonstrate in my life? Potential family member, Family member, lender.

[Bryce Stewart]

And it's true. Like let's say I had failed. Guess what I'm on the hook for for reimbursing that money. It wasn't a gift. It was a loan that we had a signed agreement for. I needed to pay back. So I had to make good for it by creating value in that triplex commensurate with what I was going to refinance back out. So I want to throw that at your audience and have it and just say, I understand some of it was lucky, but a lot of it was pluck.

[Mindy Jensen]

Yeah. No, I want to say in 2012, interest rates were lower than they are now. But you know what? They were lower for everybody. It's not just Bryce that got a lower interest rate and everybody else is paying 7%. Yes, interest rates were lower. It was much easier to cash flow on a property than. I just interviewed a guy who's buying properties in Wisconsin right now. They're good properties. They still cash flow like crazy. And people are saying, oh well, I can't buy real estate because it doesn't cash flow anymore. You can still find cash flowing properties right now. Hey, Scott, do you know of anybody in this phone call who recently bought a property that is cash flowing?

[Scott Trench]

I will say that if I were to leverage it 95% with an owner occupant mortgage and move in, I don't know. So I think, I don't think, I don't think it would have worked in that particular context. I have talked to the kids today who are doing the house hack, who are doing the first house hack. And the strategy that seems to be working in Denver right now is you have to get a little bit more creative and look for a rent by the room approach. A large single family dwelling. You have to use the assumable mortgage. So the folks are successful in house hacking today, I think are because of the buyer's market dynamic in certain types of properties here in Denver, at least in certain other markets where I've talked to folks, that assumable mortgage means they have to bring more cash, which means, you know, that can be 50 to $75,000 in many cases, if not a little more. But there are ways to make it work and to drive it forward. But I would say that right now, in many cases, the duplex, triplex, quadplex in some cities, I don't think. Could you repeat it today? Price with. At current prices with. With. With a similar property.

[Bryce Stewart]

If I was coaching somebody to do it. What I would say is become location agnostic. I would say look for a Midwestern city that has reasonable demand. It doesn't have to have insane population growth, but look for something that has stock in places that are, let's say, in the path of progress. In Midwestern cities, your best shot at doing it is probably going to be there. There's multifamily inventory in a lot of Midwestern cities. You can get a decent price to rent ratio and if it's a city that has jobs, you can count on a decent amount of demand. You know, buttressing your investment and giving you decent cash flow. But if you had to do it in Denver, that might be a different story.

[Scott Trench]

Awesome. Just call out that if you're going to be house hacking or making an all in real estate bet. Because the house hack is typically the biggest investment of someone's life by far up into that point on it, you should probably be able to speak about your metro, your MSA in the same with the same quality that Bryce just did very casually there without even having to ask him about it. That, that's a, that's a, that shows you know what you're talking about and that's probably a level of comfort you should build before making a decision like that.

[Mindy Jensen]

We have to take one final ad break, but more from Bryce when we're back.

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[Scott Trench]

Thanks for sticking with us, Bryce. Where do you live today?

[Bryce Stewart]

I still live in Bethlehem. The shortcut is this. We figured out how to burr pretty capably after that triplex. The next deal I did was you guys have talked about a perfect burr. This was, I don't know what you would call it. An asymptotic burr. Whatever is beyond perfect. The deal after that triplex deal? Well one, we bought a single family home because I promised my wife that we would. We lived in that small single family home. It was the cheapest house my wife would tolerate so that I didn't kill cash flow. We were making $3,000 a month off of these five adjacent units. That was the cash flow coming in. And I was still a teacher and I thought, you know what, this is a fine time to just kind of like roll it in and can, you know, pack it in. I can make more money as a teacher than most teachers make because we're not paying anything for our house and we're getting like $1500 a month in cash. So I thought about just circling the wagons there and not continuing to go. But I was still on that agent's automatic email list and I still, I now understood how to do ARV calculations and how to leverage debt. So it snowballed into us buying stuff in an under an LLC that moved us from let's say 2012, 2015, I finally got to the point budget wise. We had 15 or 16 total units across five buildings, all of them two to four unit multifamily. And we were cash flowing enough that I was like, I don't think I need this job anymore. Not for 45 hours a week, not when I'm doing my taxes. And I can see that I'm paying way more in the tax in in on my income I'm getting from my W2 job than the taxes I'm paying in my investment income from owning rentals. To me that was the clincher. I was like, I just need to devote get a few more properties before I can spend like 10 hours a week or 15 hours a week making more money than I was making at a 45 hour per week job. So 2015, I retired from my job. We were making probably eight and a half thousand dollars a month in free cash flow off of our rentals. We were living in a three bedroom Cape Cod. We had my fourth daughter there. It was pretty hunky dory. And then I just decided, you know what, we need to keep ramping this up. So I'll give you the today's destination. So I retired from a teaser job in 2015, 2022, I hired a property manager. All of our units are in Bethlehem. I have three units in sort of the suburban township area that are condo townhomes and then I have 34 units that are in the downtown part of Bethlehem. Bethlehem is kind of like a hipster place where 28 year olds want to live and walk to restaurants and shopping and everything. And we, when we were buying, we made sure that we bought places that were going to be attractive and in a close range of sort of like the main restaurant and entertainment strip in downtown Bethlehem and what my life looks like now just to give you maybe this provides hope, I don't know, maybe this is this pie that pie in the sky. But at this point my property manager handles most of the day to day. I still do Zillow ads for vacant units. I've renovated all of the. They're all historic 130 year old buildings. I have lots of stories that would make your blood, you know, run cold. But we've renovated them all really nicely to the point where the units are like exposed brick and hardwood floors and open concepts. So they're cool, they're hip, they're all one and two bedroom units. So I get mostly roommates or young singles who are renting from me like I said, I do Zillow ads, I do tenant selection, and then I hand off my tenants to the property manager and I'm kind of out of the picture for 12 months until that tenant is going to either renew or maybe move on. And so is that okay? Is that early retirement? I don't know. I think early retirement is a dial more than it is a switch for me. I'm fine doing, you know, being involved every 12 months and then being able to kind of take off and go on vacation whenever I want in the, in the interim.

[Scott Trench]

Aside from the work, what, what is your, what does your Tuesday look like? How do you and your family spend your, your time when you're not doing this, this infrequent activity of, of marketing for new tenants?

[Bryce Stewart]

I haven't bought much in the last two years. Cash flows at this point are at about 27 to $28,000 a month in free cash flow. Our budget is far less than that. We've gotten less careful about what we're spending because on the come up we were spending like a teacher and a non profit worker. So we're well within our budget. I work out. I coach my daughter's lacrosse team. I volunteer at our church in the youth group and sometimes on the worship team, I play guitar. I don't know if people go this direction in the podcast or not, but I will say this. The last two years, my wife and I and my kids, we have needed a lot of family time. My wife and I, we're pretty open about the fact that we, I think every marriage needs marriage counseling at some point. We realized two years ago that we probably needed to start investing in our marriage. We needed to spend time together. We needed to sort of detox some of the anxiety we had produced from going full bore for like a decade. And we just needed to, to be a family together. In some ways, I'm the poster child, child for the value of passive income. Because if either of us had had W2 jobs over the last two years, we would not have been able to dig in and do the counseling. The trips together, just the two of us, also trips together as a family that have really helped to, you know, or serve to help us grow. I think a lot of people get in, they get marriage issues and they end up kicking them down the road 10, 20 years. They don't deal with it because life just takes over and they don't have the space or the emotional bandwidth to handle it. And so the last two years for us have looked like a lot of that. Really important work. I don't want to be a super successful real estate investor and be divorced. I would rather be married and have the portfolio fall apart if that's what's going to happen. So far we've been able to grow both. That's a lot of what I've been focusing on. And I'll say this too, that's the reason why you should, if you're listening to this, you should work towards, towards early retirement or at least let's call it financial independence, where you're not as reliant upon a tyrannical boss or a demanding work schedule and you can begin to invest in relationships which are really the substance of life. So that's been the last two years for me and I don't know, like I said, I feel like I waste more time now than I did, but I move bigger pieces than I used to move and so I don't need to move things as often.

[Scott Trench]

Well, Bryce, thank you so much for coming on Bigger Pockets Money Today and sharing your story. Really appreciate it and hope it inspires some other folks to take action.

[Bryce Stewart]

I really do too. I've coached people in the past. I had a coaching cohort this spring. I usually do smaller cohorts. And we talk about some of this stuff too. How do we integrate a good financial strategy with like the pace of life and making sure that we're continuing to value the stuff? That's important.

[Scott Trench]

Well, thank you so much and. And we'll hope to see you soon.

[Mindy Jensen]

Yes, thank you, Bracelet. We'll talk to you soon.

[Bryce Stewart]

Thanks so much, guys.

[Mindy Jensen]

All right, Scott, that was Bryce and that was a very interesting story. I love how he didn't have the more traditional fire adherent salary of six figures and he instead was working. I mean, he and his wife together weren't making six figures. I think that's a really important piece to note. Yes, they were investing in a different time period, but they were investing. There are a lot of people who were in his same scenario who said, well, I guess we only make $80,000 a year combined, so there's no way that we can invest. And he said, you know what? We are going to do this. We are going to make some sacrifices and we are going to pull ourselves out of this. I mean, I've said it before. Teachers are criminally low paid. They should be paid a lot more. And it takes a special person to be a teacher. So I would rather have teachers have opportunities like this. I would rather have them have money first. But he was able to say this isn't where I want to stay. I want to elevate my family and our lifesty. So I am going to do things. What is that quote? Do what nobody else is doing now so you can live like no one else later.

[Scott Trench]

And again, this goes back to the unfair advantage that really, you know, the folk, our listeners who are starting out this journey in their, in their late teens or 20 or early 20s have. Right. Because that sacrifice is not that painful or at least it was not for me when I was 23, 24, 25. Right. It's just not to like to live in the basement of a duplex. You know, I'm still having fun, I'm still doing all the things I want to do. It would be a sacrifice, it would be a major sacrifice to do that with our kiddo at this point and another one on the way. And that's exactly what happened here with Bryce and his wife. And it's so critical to be aligned on. Yes, there's a better future coming for our living situation because we're in this and we're doing all of this for that better future that enables us to live life on our terms terms with the passive cash flow, with the ability to withdraw and live off of portfolio of saved capital. And I think that that's got to be part of the plan there. But if it is, then this is a path to getting there for someone with a lower income or in a teacher situation. You can't repeat exactly Bryce's approach for example in Denver with a triplex right now in most conditions. But there are are almost certainly going to be opportunities out there that would be accessible to many people in a similar situation within a year if they're willing to make material sacrifices to their standard of living on there. And that has every opportunity to yield a better future on there if you can tolerate that in the meantime. Because those days sound like we're completely full forum. You heard about it waking up early, going to school, teaching a full day, teaching cross country, putting the kiddos to be swinging a hammer upstairs to convert the unit. That's what it takes I think to really flip the to the other side of your from a cash flow perspective and really get the snowball turning within a three to five year time period if there's not that opportunity on the income front.

[Mindy Jensen]

And you know Scott, I was listening to him tell his story, I'm like, yep, that's what Carl and I did too. We would work our full time jobs, then we would come home and work our full time at home jobs on the house and then we would go to sleep, get up and do it all over again. I think we were getting slightly more sleep than Bryce, but not that much.

[Scott Trench]

I did the same in my early 20s and Virginia House hacked with me when we started when we we first started dating back in like 2016, 2017, and we moved back into one of our duplexes after a brief renting renting stint where we were we were just renters in in 2023 and lived there for a year in one of the house x. So now we live in our nice house that we're. That's our forever home. And that was always the vision and we were on the same page about that.

[Mindy Jensen]

Being on the same page is really important. I can't tell you how many times I have found the best house ever. And Carl's like, no, there's one house in our town that I was like, I want to buy this house and rehab it so badly. And Carl's like, there is no way we are buying this house. It was like a 5,000 square foot house. It would have been amazing at the end, but it would have been a really, really difficult remodel because everything needed to be flipped. Having your partner on the same page is so important. I absolutely agree.

[Scott Trench]

Awesome. Well, should we get out of here?

[Mindy Jensen]

That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench. I am Mindy Jensen saying take a break, rattlesnake.