Anything is possible as long as you take action. Jabbar Adesada was always the different kid in school, and he decided that he was going to fit in when he was rich. Now, he’s a full-time military and got $10,000 of passive income while only being 20 years old! He’s done short-term rentals and house-hacking and even has a deal in the Great Smoky Mountains.
Join Craig Curelop and Zeona McIntyre as they talk to Jabbar about his real estate investor journey towards financial freedom. Learn more about his deals and how he just constantly took action. He may not have known what he was doing or didn’t have any money at that time, but he still continued to put one foot in front of the other. Discover why it’s important to surround yourself with like-minded individuals so you can achieve your goals no matter what!
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You can also go to the website – https://www.kapre.com and use our CODE – Invest2
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Anything Is Possible If You Take Action: A 20-Year Old Investor’s Real Estate Journey With Jabbar Adesada
Z, how are you doing?
I’m doing so great. I’m excited about this guest that we have but what is going on in my life? I’m having a great time. I’m out here in Atlanta. If anybody is looking to buy or invest in Atlanta, hit up Vince Crane. He is hosting me. I got to spend time with Ken Corsini and Anita, his wife. I’ve had a fun little tour.
That sounds like super fun. Except you decided to go to Atlanta, Georgia, in the middle of August, which I don’t know why.
I’m here for a wedding but it’s only in the ’70s. It’s a very mellow week heat-wise. I’m doing good. What’s new with you, Mr. Craig-er’s?
We’ve got some stuff going on up in here. We are building out a little farm up here in Idaho. We bought a cow, which I never thought was going to happen. My buddy and I are building a chicken coop, and we are almost done. It’s a chicken mansion. Chicken McMansion is what we are calling it because it’s 160 square feet. You could fit literally in a queen size bed inside where the chickens would sleep. We are thinking about maybe Airbnb being it but the chickens get to live, not rent for either giving us eggs but they are not paying us any dollars, unfortunately.
What are you going to do with the cow? Tell me about this.
We got a cow and a calf, and then that cow was pregnant. We are going to end up with three cows here in less than a year. The idea is to get milk, cheese, and yogurt. It’s going to produce 3 gallons a day. We are splitting it with friends. We are going to sell the excess milk to some friends and family for a discounted price because raw milk is $20 a gallon.
It was super expensive.
We will sell it for $10 a gallon and save some people some money. We will also help offset the cost of our own milk, which we drink a lot of. We are going to raise up the bull and then eventually butcher it and have a year’s worth of meat.
If the world ends, go to Craig Curelop’s farm because he would be fully self-sufficient.
We are getting ready. That’s the idea. We want to grow and be fairly self-sufficient. That’s our journey of us. Now, I feel like I want to do my best Kool-Aid man impression and run through a wall after talking with Jabbar. This kid is so full of energy. I love his story. I say kid because he’s literally a kid. He’s a legal adult because he’s 18 but not even 21 yet. He’s already financially free at the age of twenty. Let’s bring him on the show.
Jabbar Adesada, welcome to the show. It’s so good to have you on and to see you again. We met way back at the BiggerPockets thing. It was so good to meet you. I felt like after talking to you, I was hype. I’m ready to get everybody else to read this. Why don’t you tell us where you first heard about financial independence?
I first heard about financial independence while I was in the military. I didn’t know it was a real concept until I was in training, and we got hosted for the holidays because we weren’t able to go home and see our families. I saw financial independence personified and this guy named Phil. I talk about Phil all the time. He was living a financial independence life. He’s the type of guy to go scuba diving in the morning and hang-gliding in the afternoon.
It’s just a thing. I was getting to talk to Phil, and I wanted to be a doctor when I first joined the military. That’s why I joined, so they can pay for school, and I can pursue my education but then after meeting Phil, I was like, “I want to be like this guy because this guy is doing it right.” He gave me two books, I Will Teach You To Be Rich by Ramit Sethi and The Automatic Millionaire by David Bach, and then I’ve read those things from cover to cover. In I Will Teach You To Be Rich, he brought up the idea or philosophy of financial independence. I was like, “That’s going to be me. I’m going to be financially independent ASAP.” That’s how it started.
I love that you were going to hack education by going to the military for being a doctor. I’ve never heard of anybody doing that. Most people try to get free college through the military but doctor, that is brilliant. Kudos to you for that but the second thing is that I’m surprised that Ramit is the person that you got inspired to do FI through because, in his book, he only tells people to save 10% of their income. He’s one of those more traditional financial planners. I always thought that he was way too conservative to be financially independent.
When I saw Ramit’s book, I liked to take everything to the next level. He messaged me and made sure I remembered. I googled it and then fell down the rabbit hole. It’s a good book. It’s super conservative, I agree but once I saw the concept of it, I’m like, “I’ve never heard this before.” You then start seeing every day and everywhere. It’s like Honda. When you think about it and see it over and over again.
One thing I love is that I feel like everybody has got this turning point, the book they read, the person they heard, especially when you are young, 18 or 20, you are so malleable, and you can be on one trajectory and switch so quick because you are early on into your trajectory. If you were eight years into your Doctorate degree, it would be a lot harder to be like, “Screw that.” I love that you were able to make that shift and be so malleable and not set in stone as to what you are going to do. After you read Ramit’s book, it sounds like you read between the lines, pulled out one piece, and extrapolated on that. What came next? What piece of education?
I was eighteen at the time to give people chronological order of where I was at, and that was a few years ago. After I read Ramit’s book, The Automatic Millionaire, I started saving every single penny. In the military, we are notorious for spending money on cars, food, and all this crazy stuff. I was like, “No. Screw McDonald’s.” I was spending $50 a month while I was in training because I was literally saving and investing every penny. If you save 10%, and my logic was, “If I bump it to 80% or 90%, I can get there really quickly.”
At the time, in the military, we don’t make much money. I was making $1,500 a month and investing all of that stuff into the stock market. This was COVID time in 2020. I ended up doing pretty well from that. The market was crashing. Warren Buffett was like, “When everyone is fearful, that’s when you get greedy.” I took that seriously and threw everything to the market.
The military paid me the most at that time, $11,000 or $12,000. This was a 6 or 5-month period but in my broker’s account, because the stock market had rebounded, I was at $25,000. I got that education, and this stuff is real, and it works. That’s what got me thinking bigger like, “This $25,000 or whatever is okay but how can I get to this millionaire level of what I was yearning for?”
What are some of the ways that you were being scrappy and saving, whether you are in the military or maybe some people not in the military can take some nuggets from you? What were some of the ways you were that?
I was eighteen at the time. In the military, they take it out of your paycheck, so you never see it. I have my food taken care of. We wear a uniform 24/7, so I never spent money on clothes. I didn’t go out, honestly, if I’m going to be real. I stayed on base the entire time and read books and read different things. It was that series of hyper-focus. When they say, “If you dedicate six months to anything, it will change your life forever.” That was that for me. I rejected any feeling of spending.When everyone's careful, that's when you get greedy. Click To Tweet
How did you feel being eighteen years old where fitting in is usually a big deal, with all your buddies going out and grabbing smokes or whatever the heck you guys do at eighteen when you go out? How did you feel when all your buddies were having fun, and you were sitting inside, locked in your room, and reading, The Automatic Millionaire?
I was outcasted. My friends and everyone would make fun of me but I have been weird my entire life. Growing up, I was bullied for being an African kid because I had mentioned sssss also Nigerian. I never fit in anywhere. To me, it was like, “I will fit in when I’m rich.”
You are in the military, locked yourself in your dorm room, reading books, and seeing this bigger picture. At what point did you decide to take action?
I was doing the whole 4% Rule because I listened to a lot of Graham Stephan. Also, I forgot to mention that not only was I saving money but I was also side hustling. I was doing papers for other people and outstanding duties for money. I like to trade a lot of my time for money to generate other income. When I was doing the math, it was $2,000 a month for 15 years compounded at 10%, I would be a millionaire at 34, and I was an 18-year-old kid. I was like, “This is bull crap. I don’t want to wait that long.”
On Instagram, everyone else is doing it earlier. The TikTok kids are dancing around. I’m like, “How are they doing it?” That’s when I started looking and brainwashing myself. Everyone who was a friend of mine, I downloaded on some social media. I started following people who were only into entrepreneurship, investing, and everything like that. I’m trying to have those conversations, and eventually, by doing that, I found BiggerPockets.
The first episode I listened to was Todd Baldwin‘s episode, where he talked about renting properties by the bedroom. He was a millionaire at 25 and was making $13,000 a month in cashflow. I was like, “This is way better than the stock market. I’m going to do that.” I listened to a couple of other episodes, and one kid who’s twenty years old, making $750,000 a year or that was the flashy BiggerPockets title. It probably was growing. He said, “How I got to where I am is I started at episode one of the BiggerPockets podcast, and I listened to all of them.” That’s exactly what I did. I started at episode one and listened to every single episode.
There are almost 600.
That’s nuts. I did that too. When I first started getting the real estate, I went from one all the way to the present day but I will admit I’m not as badass as you. I stopped at 200 when I caught up. I stayed with it for 300, and then I’ve totally fallen off. They started making so many damn episodes. I’m like, “I’m drowning.” One thing that you can’t hide is education. You’ve already rattled off eight different influencers that you follow. The key to success is getting educated. Z, what do you have to add?
I’m curious, you listened to all these BiggerPockets, what made you take action? Where was that turning point for you? A lot of people got stuck and were like, “Cool. Here’s another way that I can delay having to do anything. I’m going to listen to 600 episodes for 2 years.” When did you go, “This is the strategy, and I’m going to do it?”
I want to add that I’ve listened to both of your episodes on BiggerPockets three times. One of my favorites was Craig’s. I was 18, turning 19. Fast-forward to August 2020. I was turning nineteen that month. That was August 30th, and I told myself, “In six months, I’m going to buy a property. I don’t care what goes on or if the market crashes. I’m going to do all this education but I have to buy property in six months.” BiggerPockets was promoting Rent to Retirement all the time. “If I don’t, I’m going to log on to their website and buy a rental property and figure it out.”
I gave myself this arbitrage standby, and then on top of that, I was also reaching out to other people. This is probably the biggest thing I did. I was reaching out to other people who are already real estate investors on BiggerPockets. When you start to surround yourself with people who are doing it, and then start to talk and listen to them, and then on top of that, you listen to the podcast, you realize, “If this dude, woman, single mom, and poor guy can do it, then I sure can because they did it.” You get to that moment.Surround yourself with people who are doing what you want. When you realize that this single mom or this poor guy can do it, you can too. Click To Tweet
I joined SheeksFreaks also. I made this post, “When I turn 30, I want to have $10,000 a month in passive income.” It was my very first goal on BiggerPockets, and Dan Sheeks ended up responding. He got me into the group, and then I told everyone in that group my goal. I was like, “I’m going to buy a property in six months. If I don’t do it, I look dumb.” I ended up buying a property in five months when I was nineteen years old in February of 2021. It changed my life. The rest has been history.
If it doesn’t work out as a real estate investor, you should go into leading a sermon because you are so on fire. I feel on fire.
I’m sweating. I need to run. I love that you set your goal, and you will hear this on BiggerPockets too. They talk about analysis by paralysis, and any podcast talks about that. It’s such a real thing because you can listen to 600 episodes, take 9 courses, and read 150 books but we say this all the time on the show, “Education times action equals success.” If you are 3,000 in education and 0 actions, your success is still zero. At some point, you got to be like, “I’m ready. The books aren’t going to teach me how to do it.” They will teach you how to get 89% of the way there but you got to do it to get a 100%of the way there.
SheeksFreaks for people who don’t know, it’s a community for younger people that are getting into investing, whether it’s real estate or index funds. They are teenagers to their early twenties. Did that make it more believable for you to have people like your age? Sometimes it’s hard when everybody you listen to is older.
What’s cool is that I was the first person in SheeksFreaks to buy a house. I was to bring the thing to earn that title too but what helped was other people think as I do. As I said, in the military, I’m weird and people still make fun of me now. I’m making $1,500 a month and trying to buy a house to rent out the bedroom. It was something that most people thought was crazy, especially because I was nineteen years old. They are like, ‘”You’re an idiot.” Everyone was telling me I was going to fail and all this stuff but then I went every Sunday and told all these guys my age. They will be like, “We can’t wait for you to do it.” That’s my encouragement. That helped me hit my goal.
I went through hell but wouldn’t say hell because it feels like nothing but what it felt like at the time. Now, my friends will let me know, and my parents were like, “You should probably go to school.” All the loan officers, when I was trying to buy a house were like, “There’s no way. This is not happening,” I didn’t meet their qualifications ever.
This is exactly what happens when you take a trajectory different from all of those around you. You have been taking advice from all the people that you loved, your mom, your dad. I don’t know if you’ve any brothers or sisters, your military people or your sergeants and your lieutenants. You are taking advice from these people your whole life. I see your life, and no offense, I don’t love it. “I want to go this way. I’m going to go integrate myself into a group of people that are living what I want to do. I’m going to go listen to them. This is a group of strangers that I met last Tuesday are the people that I’m going to listen to do because that’s the route I want to go.” That’s super important.
It’s hard to stop listening to your mom, dad, grandparents, brother, and sister that you have been listening to your whole life but you have to do it. I did that too and those are the hardest things I’ve ever done. I’m a few years ahead of you when you are on the journey but they look at me now and be like, “I see what you are doing now. Good job.” Be ready to get that good job fist bump when that time comes.
I told people all the time that because I’m Nigerian, in our culture, it’s either you are a lawyer, a doctor, an engineer or a disappointment, so I chose disappointment for my family. It’s funny now because before I was like this idiot, now I’m a genius. They were like, “He has no morals because he’s a landlord. He evicts single moms.” You never please anybody. You have to blaze your own path and go for it and have a bias for action because that’s what’s going to make the difference in your life. Go for it and figure it out. It’s going to happen, and you are going to thrive or die, and you won’t die.
I love that. It’s ready, fire, aim. Let’s get into that first deal, though. That’s February 2021. You are nineteen years old and buying your first deal. That is your For Real Deal. The deal that makes you a for-real investor. Why don’t you tell us a little bit about that one? Where was it? What was the price? How did you finance it? What did you do? Give us all the tea.
My first deal was in Pooler, Georgia. It’s a suburb and ten minutes outside of Savannah. This is a great deal. I’m super excited to break it down. I found this property on the MLS. It was this funky house, and what got me to do this was Dan was like, “BRRRR, flipping, and all this stuff,” because that’s what I was to do is pretty difficult. “Read this book by my buddy, Craig. I’m pretty sure you are going to change your mind on what you want to do.” I don’t know if you remember this but I was DM-ing you weird specific questions. I look back at it and will never do that.Action is what's going to make a difference in your life. You're either going to thrive or going to die. Click To Tweet
You are not the only one. It’s okay.
I realized that if I do the BRRRR strategy, maybe that might delay my six-month goal. Also, the opportunity to get a lot of cashflow from house hacking was there because I was analyzing 5 deals a day, every single day for 3 or 4 months. I saw the numbers work. This one was on the MLS. It was a 4-bedroom, 4-bathroom home for $255,000. I did all this stuff BiggerPockets tells you to do. Find a real estate agent on BiggerPockets and make an offer. They want $255,000 and I was like, “Offer $235,000,” and that didn’t work. The real estate agent was like, “What is wrong with you?” She did it anyway.
They came back at $253,000 from $255,000. I bargained with them and got them down to $240,000. I was like, “$240,000 with closing costs covered.” They were like, “We will do $240,000 but we won’t cover your closing costs. I was like, “Fine, $246,000 but you cover my closing costs.” That was that. Financing was the hardest part for me because I was nineteen years old at the time. I had exactly six months of credit history. I didn’t have two years of W-2. My income was super small. I was bringing home $1,500 a month and the mortgage payment was $1,135. It was a little higher before but they miscalculated it.
I talked to nineteen different banks in total to find financing for this deal. Bank number thirteen was the bank that finally told me, “Maybe.” I talked to a few more and came back to bank number thirteen, and that’s what I ended up using. I used my VA loan on the property. It was 5% down on for $246,000, and that broke down to $12,300 in down payment. I closed on the deal and moved out of that property but that property nets for $2,000 a month. I did it rent bedroom style. I created a fifth bedroom and rented it out like each individual bedroom, and Craig Curelop-ed it. I slept on a futon in my 5-bedroom and 4-bathroom house.
I feel like I’ve made it now that my name is a verb. That’s it. I’m done. I have a quick question for you because you mentioned one thing, you said you did a VA loan with 5% down. I’ve never heard of that. I thought the VA loan was always 0% down. Why did you do 5% down?
It’s because my lender came back to me and told me, “If you want to buy this house, you don’t qualify $246,000 but you qualify for $233, so if you put 5% down, you can buy the house.” That’s why. I was all into it for $22,000, between that and then the VA funding fee and then furniture. In year one, I looked back at my tax returns and everything, it’s like $1,500 a month. This 2022 has been crushing it. I haven’t had a single vacancy since I started renting the thing out. Eighty-one percent cash-on-cash return on my first deal. I will take that over where I had to do all the work and go through all the challenges of, besides, furnish the house and rent it out by bedroom.
This is why house hacking is the best investment ever. I just wrote a book on it but you have $18,000 in your first year and cashflow after putting down $22,000, and that doesn’t even include loan paydown appreciation and all the other great things that come with it. You are looking at a return on investment, over 100%. That’s only your first year. That’s not even including the 99 years you’ve got left in your life. It’s insane.
I’m so glad that you were able to see that and be like, “I don’t need to do this,” especially the BRRRR thing. There are probably no sexy before and after pictures with the house hack. There’s no sexy, “Pulling all my money out,” but what you get is nice cashflowing property that can cashflow you nicely and it minimal work. You can focus on the US Military or whatever you are doing there.
I want to know how it was for you to be sleeping on the futon, couch or whatever. Do you think that was weird for the roommates? How did you sell that idea for people to be cool with that?
Honestly, I didn’t care because the way I looked at it, I was like, “Craig is doing this. He’s much older than me. He’s not in the military.” In the military, my alternative was to sleep in the barracks, where my roommate pays me no money, and their breath stinks. We are right next to each other when we sleep together. For me, it didn’t matter. For the roommates, I was like, “I sleep here. It is what it is.”
Another thing is that nine months out of the year, I was either deployed or on training. I wasn’t there for a full year. It was my primary residence but because of my life, I will stay in this area or go somewhere next week. I’m constantly traveling. I will put up with it to double my income because that property net more than what the Marine Corps pays me every month. I’m like, “My house pays me,” and it’s gone up a $100,000 in value. I was like, “Easy choice. Roommate, deal with it.”You don't need the money or the income to qualify for a loan; you just need to find a good deal. Click To Tweet
It’s so easy to do that. If you are reading this and you are young and haven’t had that luxury of living by yourself and all that, it’s so much easier to live with roommates now versus live a high lifestyle and scale back, especially in the military. I feel like, you, military people, are a different breed. There was one time, and I haven’t told this story and almost forgot about it until you brought something up that triggered it.
He was a friend of a friend of a friend. He was in the military. He needed a place to stay for one night. This was back when I was in California, way before the house hacking thing. I made a little bed for him on the couch with a sheet, a blanket, a pillow, and all the comfy stuff. He comes in and sleeps. The next morning, he’s out. He has a little post-it note that says, “Thank you.”
The bed is exactly how I left it. I texted him and was like, “Dude, did you even use this stuff?” He’s like, “No, I slept on the floor.” He didn’t use a pillow or blanket. I’m like, “You guys are a different breed.” I don’t even know. We had a cushion. That’s the next level. Your first property is in Georgia. It’s cashflowing $2,000. You do rent by the room and try to get as much as you can out of that property to get to that goal of financial independence as quickly as you can. How did you find your tenants? That’s the question I get a lot.
I get that question a lot too. Honestly, it’s pretty easy. I used Facebook Marketplace, Facebook Groups, and then Roomies.com. I always have tons of people hitting me up. The type of tenants I have is other militaries. I’ve had a chemical engineer and mechanical engineer working for a private jet company. These people were making six figures but were willing to pay $850 to rent a bedroom. When one bedroom is $1,500 or $1,200, whatever it is. Roomies.com, where I find high-quality people on there.
That’s exactly how we do it too. February 2021, you bought that first one. Did you stay there for a year or what were you doing right after that?
I stayed on that property. I also bought a cabin. I had $25,000 but spent $22,000 on that first deal in total. I had no money. I was like, “How are you guys scaling this stuff like that? I want to buy another property.” I was in the field trying to get my property rented out halfway across the country and managing it myself. I was struggling at first because everything was wrong. My ads were wacky. My pricing was too high. I was not doing it the right way. I figured it out.
One person I met while I was in the field was telling me about this whole Airbnb short-term rental thing. I was like, “That sounds awesome. How are you doing?” Once you start talking to real estate investors, they love talking about themselves. The guy gave me a crash course on his portfolio and how well he was doing. He has six cabins now. In 2021, they did $300,000 in pure cashflow in the Great Smoky Mountains. He had one cabin that he bought for $500,000 and was netting, not gross netting, $50,000 a year on one property. I was like, “That’s insane. I want to do that too. I’m going to buy Smokey Mountains cabin.”
Keep in mind that I had no money. I had no experience in short-term rentals or anything like that. I did that whole crash course. That’s why I listened to your podcast with Zeona on BiggerPockets, talking about it and Airbnb stuff. I did all the learning and was like, “I don’t have any money. I don’t have the income to qualify for the loan. If I can find a good deal and a good opportunity. I can get to put somebody else on it.”
I went down that whole process. Eventually, I found somebody after tons of rejection, telling everyone, “I am a real estate investor and want to buy this cabin.” I found somebody who guaranteed the debt, bought the properties, and then split the deal equity and cashflow 50/50 in the Great Smoky Mountains. That was a $600,000 cabin. Going from $246,000 to a $600,000 property on my same income was such a big jump for me but because I’ve figured out, “How can I buy this cabin without having the money?” It started unlocking my mind about how I can start scaling more and becoming a big-time real estate investor.
That is a huge jump. Personally, every time I like to stretch myself to buy something a little more expensive, it’s scary. Break down that deal for us. You told us the price, how much is the mortgage, how it is doing, and all that stuff.
I haven’t had that property for a full year yet, but I can give you an idea. I paid $600,000 in the Smoky’s. The mortgage payment is $3,000. I estimated that it was going to do $90,000 in gross revenue. It will be more than $80,000 in gross revenue. It is great. We did $12,000 and net is $6,000 and now we are doing $6,000 in gross revenue and we will maybe net $1,000 or $2,000. It varies a lot. We will probably end up at a 20% cash-on-cash return which is okay. It’s probably my worst-performing asset. I’m not finished stabilizing but they are a good deal.Short-term rentals, no matter what anybody says, are not passive income. There are so many different things you have to do. Click To Tweet
Real quick on the partnership side. You are doing a 50/50. It sounds like you put 20% down. He came in with $120,000 to $150,000 after furnishings and all that. No dollars out of your pocket, though, which is the important thing.
More on the logistics side, and I didn’t want to go super deep into it but I can. We leveraged the 10% down vacation home loans. We are following all the workers’ obligations with the property, which states we have to stay in it for two weeks, and then the rest of the time, you are able to rent it out as a short-term rental. What we did was we only put 10% down.
I was the person who brought that 10% down because I got the money from another investor. I’m paying him an interest rate on his money and then the part that he bought the property but then I gave him the money back afterwards. That’s why he did it with a nineteen-year-old kid he met in a random flat room is because the rent was super low.
We pay him $300 or $400 a month and then have five years to pay him back. The cabin has appreciated $100,000, maybe less with the market going down. We could pay it back by a sale or refinance, or I could pay him back or we can pay him back out of the cashflow. There are several different exit strategies for that but that’s how the deal was broken down.
I always think that’s interesting because there are so many different ways to approach investors. Again, a lot of people reading this have that drive but don’t have that money, so you got to find somebody with the money, and putting yourself in those groups is how you do it.
I want to hear about these next investments because it sounds like you are doing all the right things. You did the house hack, which is where we say to start for everybody. That’s such a great move, and then you did the next sexy thing, which is like Avery Carl, Smoky Mountains, and people talk about that a lot, and that’s not your best performing thing. What is going to be your famous thing that we are all going to be like, “We want to be like Jabbar, and we are going to go get this next deal?”
Short-term rentals, whatever anybody said, it is not passive income. It is a business. People think, “You just cabin on Airbnb, and it rents out.” No, there are tons of marketing strategies and different things that you have to do to stand out. Now, it’s even gotten more competitive, especially where we are seeing a lot of listings come online. You have to pivot and differentiate yourself and things like that.
I love short-term rentals, though, because it’s fun. It’s still sexy. It wakes me up in the morning and gets me excited. That’s what I’m focusing on now. For my next deal, I was on deployment in Norway. While I was in Norway, I was putting offers on everything because I have the strategy because there are people who are like, “We would love to do what you did in the past, which is we buy it and split 50/50.” This time I don’t have to give them any money. They are the ones who were putting up all the money, and then we put 50/50 afterward because now I have a track record.
For your audience, that’s the thing when you are doing your deal 1, do maybe 10. They don’t matter because all it’s doing is building your track record as a real estate investor. It’s like a resume for you. If you plan on ever raising money, partnering with people or building that skillset of Brandon Turner calls it being a lion killer, your go-to thing. What are you good at? It comes from the experience of doing multiple fields.
The next deal I found while I was in Norway came from a relationship. This is my first off-market deal. One thing I didn’t tell you guys and your audience, I am out there networking. I’m constantly going to events. I had this one investor who I saw sold one of his properties. He had this duplex that I wish I had bought. I was like, “Let me call this guy and see if he is interested in selling.” I started blowing them up every two weeks. I follow up with them. “You mentioned some stuff. How are you doing? I heard you have a new girlfriend.”
I was talking to him, and finally, he agreed to sell while I was in Norway. I was like, “Great. Awesome. Let’s make this deal happen.” When I ran the numbers with the new interest rate and everything. I was like, “I wanted a 30% cash-on-cash return, so I know that exists.” The way that I handled that was I said, “This deal only works for me. If you allow me to take over your mortgage. It’s subject to.” I explained to him what the subject to was like the framework, and I didn’t know 100% what it was. I navigated him to what I was thinking. I was like, “We will get an attorney. We will be official. This is how we can structure it to be a win-win.”Deals one through ten don't really matter because all it's doing is building your track record as a real estate investor. Click To Tweet
I was trying to practice pitching it but to my surprise, he said yes. What that deal was a duplex in Beaufort, South Carolina. He had a 2% interest rate on it and over $200,000. I’m paying him $210,000 but I don’t pay him $280,000 for ten years. For the time being, for years 1 to the next 10 years, I’m paying this dude’s mortgage payments and it’s $1,200 with 2% interest. I then have a $70,000 balloon ten years from now. The property will appreciate. I could sell it and do a lease option. There are so many different exit strategies.
I like this deal a lot because he has a $1,250 payment but gross rent as a long-term rental is $3,800 or $3,700 on a $1,200 mortgage payment. If it’s a short-term rental, I can get greater than $5,000 in gross rent. This is a killer deal because I put no money down. I’m literally furnishing the place, and it’s going to print money. I’m getting it online now.
Why did the guy sell? It sounds like he was doing great with it.
He is not meant to be a landlord. He is the most basic possible person I’ve ever met in my life. He was discharged from the military for not meeting the requirements of being in shape and things like that. He was absentee, so he moved to Texas. The property is in South Carolina. When I finally went to see the property when I got back from Norway, the grass was so high. I met up with a tenant, and she rolled her eyes. He was like, “He doesn’t fix anything else. He doesn’t respond to messages.”
Another thing, which is not cool, she was paying whenever she wanted to pay because the guy wasn’t keeping track of it. He was doing Airbnb on the one side but it was probably like the worst Airbnb I’ve ever seen in my life. He then was having a baby. He wants to be done with it because of the responsibility that he should not have been handling.
It sounds like you inherited a problem. Problems tend to be very profitable. If this thing is to pay the buck, he probably has some ghosts in the closet that are haunting him. He does not want that deal anymore. That’s how you pick great deals to find people that have problems that it’s heavy for them, and you lifted off of them and then pay the difference. That’s great. Is that your portfolio to date you got that house hack in Savannah, Georgia, the Smoky Mountains Airbnb, and then you’ve got this one in South Carolina?
I’m house hacker times two. I did another house hack in Savannah, Georgia, and that one is going to be one of my favorite deals. I found this deal through a relationship. The real estate agent, Chelsea Phillips, the best real estate in Savannah. Instead of taking the commission on this thing, one of my friends was going to sell it on the market with her, and she probably sold it for $800,000 but she said, “You have been looking for a quiet place. Curtis is trying to sell it.”
She put us together and played the connector role. I bought it from Curtis for $695,000. The fourth unit needs renovation. Now, there are tenants in there, and they will move out at the end of the month. The awesome thing is that this thing is going to be smacking short-term rental. This is three units with me living on the property. I’m probably going to do $11,000 in gross rent on a $4,500 mortgage payment. Long-term rent once I move out for $6,900 in total.
On top of that, I’m renovating the fourth unit. Once I finished renovating it, which will cost me $60,000 $70,000, or maybe $80,000 with all the furnishing and stuff like that. The property will be worth over $1 million. With equity and appreciation, I’m going to be able to borrow it to do more deals. These deals collectively will give me financial freedom as a twenty-year-old. It’s insane.
I told you guys that goal. I put it in BiggerPockets. I want it to have $10,000 a month in a net or passive income by 30. This year, I’m going to be at $10,000 a month. It’s not passive so that I won’t call it passive income but net rental income is potentially less than three years later. It’s blowing my mind the power of real estate investing.
I have the same thing that happened to me when I was 26. I had a goal to retire by 30 and had no idea how I was going to make it happen. Airbnb allowed me to do it in two years. I’m not surprised to see that. Sometimes when you set a goal, you can get there way faster than you expect but my question is about regulations because Savannah has some tight regulations. What have you been doing? Have you picked the right markets where you are outside of the city enough that it doesn’t matter?Do your due diligence on your property, or else you're going to constantly bleed money. Click To Tweet
I’m in the most regulated part of the city. It’s horrible. The rule in Savannah is that it has to be commercially zoned or it has to have an existing permit prior to 2018. This property is commercially zoned. You can do short-term rentals, and if you are owner-occupied, you are also able to do short-term rentals in Savannah. It’s a double whammy there being in that market but once you go over the hump of regulation, you hit the jackpot.
It sounds like you are doing well on your way. You are already around $10,000 a month and can retire before you can drink. That’s a pretty cool thing to say but one thing I want to ask you because right now, it seems everything is unicorns and rainbows, and everything you seem to touch turns to gold. I know you’ve probably suffered through some pain in this journey. Give us your top pain point so we don’t paint an unrealistic picture for people.
I apologize for that. I didn’t mean to make it a highlight reel.
That’s what it’s about but we know. We are experienced here. We know there is some love.
For me, it’s mistakes. I closed on the 29th instead of the 1st, which made my mortgage payment a month earlier. That’s $4,000 in unexpected expenses already because I will play two months of unexpected expenses. Now, I’m self-funding the deal. The reason why the number is going to be lower is because a big mistake I made was a guest peed all over my carpet and ruined it, and their dog scratched it up.
A human pee?
Sorry, their dog peed. That was $4,500 because I had replaced all the carpets now because they smelled like dog pee. They were all scratched up. That sucks. I couldn’t go after the guest, so I had to refund the next guest because I couldn’t get it done in time. It was $6,000. It feels like I constantly bleed money because every month, there’s something. All of the different properties, there’s something. With this last house I bought, the foundation is wonky. Sometimes down the line, I’m going to have to spend $20,000 or $30,000 on the foundation, and that’s on the duplex that I got with nothing down but that maybe year 2 or 3, I’m going to have a $30,000 to $20,000 capital expenditure that l prepared for.
It’s stuff like that. Due diligence or things that you couldn’t even think of. I make a lot of mistakes, and I’m grateful for them because I’m learning. It’s part of the game that you have to figure out. That’s why I try and share different exit strategies so that I always have a plan. The worst-case scenario is that I started knocking on investors’ doors. I’m like, “I don’t have $10,000 but this thing needs $10,000 come in with a $10,000 and take 50%,” or something like that. Things can happen.
Real estate is so forgiving too. That’s the best part about it. You could have a $20,000 expense but the property would probably appreciate to $100,000. You are like, “I will give you $20,000. Thanks for the $100,000.” That’s how I view the expenditures that I have that were unforeseen.
We should move into the final part of our show. Do you have any final words of wisdom before we do that?
The biggest thing that I did was being in SheeksFreaks helped me a lot. People in SheeksFreaks have properties now. I’m not the only one but it’s surrounding yourself with other people who are doing it. I’m trying to get into rooms where I feel tiny because I have eight doors. There are people with 800 doors and 1,000 doors. It’s not the most important thing but if you want to go bigger, you have to be around bigger. That average of the last five people that you spend the most time with, it’s true. I have friends who, when they were 20 and bought 140 units. It’s important to surround yourself with like-minded individuals.If you want to go bigger, you have to be around bigger like-minded individuals. Click To Tweet
If you are interested in joining Sheeksfreaks, go to SheekFreaks.com. We have absolutely no affiliation with them other than Dan is a good friend of mine. Some background on Dan, he’s a high school teacher. He has been on our podcast twice. He thrives and gets so much energy from helping young people to achieve financial independence. Again, a wonderful guy. Go check it out. Let’s head into the Final Four. Kick us off Z-Money.
Question number one, what are you reading now? Is there anything left to read or have you read it all?
No. Book reading list gives me anxiety because people told me to read books. I’m like, “I’m literally drowning,” but I’m reading $100M Offers by Alex Hormozi. I am probably going to have to read it again when I’m at that level because it’s so good. It’s business in a compact tactical potion. It fires me up but there are lots of good info in there.
I finished that one as well. It’s a good book. What is the best piece of advice you’ve ever received?
Buy real estate. When I think of my trajectory, there is no way in heck that I could have gotten here with anything else that I was going to be doing before. When I look at where I’m heading now, it’s another level. Take action ASAP, figure it out, fire, ready, aim, or whatever it is. Build your parachute on the way down. That’s the best advice I’ve ever gotten. Take action. You don’t need to know everything.
Question number three. What is your why?
I didn’t go into this but in my background and it’s going to sound artificial. I was like abused as a kid. When I was fifteen, I got taken away from my household by child protective services. Growing up, I always feel like a loser. I was going to amount to nothing. I was going to feed nothing. I was going to be a deadbeat father. Not being that person but being the man that God put me on Earth to be. I prayed about it every morning.
In my lifetime, I want to help a billion people. I don’t know what that looks like. I don’t care what that looks like but I know that I want to help as many people as possible. The more wealth that you create, the more you are able to pour that into things that you believe in and give to other people. For me, how can I be this impactful person that leaves a lot of legacies? That’s what sounds awesome in my head. That’s my why.
I love that bomb drop. That’s for real why. That was a couple of years, and that’s not long ago for a lot of people, and to see where you are at now is unreal. It’s easy to get caught in looking ahead but if you’ve read, The Gap and The Gain, which you probably have, always take some time to look back as well and see how far you’ve come because that’s an insane trajectory. Number four, what is something that everyone looks stupid doing?
Being in an unnatural state. I always think, “Someone else is good at that.” I wouldn’t say singing or swimming because I looked pretty stupid trying to swim and sing.
If you are doing it at the same time, there you go.
Let’s go with that. Swimming and singing at the same time. Try it, and you will probably look like an idiot.
I would agree. Where can people find out more about you?
Hit up Jabbar with any questions, and he’s crushing it for someone at your age and your background and all that good stuff too. Thanks so much for coming to the show. Thanks for spreading your knowledge. This will help you reach your goal of impacting a billion people. Make sure you add that to your tally.
We will see you soon.
That was Jabbar Adesada. He’s the Jabbar Investar. What did you think of Jabbar?
This is one of my favorites. It’s so much fun. I love his energy. I love how he wants to give back to so many people. I love that his story has to do a lot with not fitting in and then being okay with that and blazing his own path.
I love his story. I love hearing about where he came from and where he is now. It’s a short time. He unlocked that anything is possible and going straight on towards that. He’s full-time in the military. He’s got investors. He has $10,000 of passive income but can’t buy a beer. It’s crazy to think about where he’s at and will be five years from now when he’s 25.
If you are going to reach out to somebody, Jabbar is probably the person you want to follow and reach out to because he’s still so young. If you are still young and starting out, he’s the person that’s going to be one of the most relatable guests. Go hit him up. He’s such a nice guy. If you ever need some stimulation and energy, he’s got plenty of it to share.
What can we offer you? If you are looking to invest in real estate anywhere in the US, please reach out to us because we can connect you with our network of investor-friendly agents. We would love to help you get going. Also, if you can leave us a rating or review, we would love that. Share our show with somebody you know and like. This is such a great inspiring episode. This would be a great one to share.
- I Will Teach You To Be Rich
- The Automatic Millionaire
- Todd Baldwin – BiggerPockets Real Estate Podcast Past Episode
- $100M Offers
- The Gap and The Gain
- @Jabbar_Investar – Instagram
- Jabbar Adesada – BiggerPockets
- Facebook – Jabbar Adesada
- @TheFIGuy – Instagram
- @ZeonaMcIntyre – Instagram