ITF 39 | Live & Flip


FIRE may be more difficult for some, but it is doable if you’re willing to put in the time and leverage your strengths. If you’re still hesitant about starting, Carl Jensen is an example that neither age nor family obligations are an excuse. He’s a recovering engineer who was already married (to Mindy from BiggerPockets!) with 2 kids when he first learned about FI.

Carl shares how he was able to reach his net worth goal in 5 years—which he has quadrupled since then. He then talks about his fix-and-flips and his passive income streams (“spouse FI” anyone?). Finally, he explains why dumpsters(!) are a sign of progress.

Listen to the podcast here


For Real FI At 43 Through Live & Flip With Carl Jensen

Z, how are you doing?

I’m good. I was expecting you to call me Z-Money. I had somebody reach out on Instagram and they called me Z-Money. I was like, “It’s happening.”

The nickname has been officially stamped. We like to keep you on your toes. We can’t call you Z-Money every time. How is life?

Life is good. I’m about to meet you and we’re going to have a photoshoot at a fancy hotel for this podcast, so get ready, guys. You’re going to see some pictures of us.

I’m excited about that. I’m sure you’ll be way more. If you look at Zeona’s Facebook, you’ll see that her photos are super photogenic like a mermaid coming down a waterfall or whatever. I’m sure mine will not be as good.

I’ll upstage you. It’s okay, Craig. It’s Hawaii and a good photographer, you can’t lose.

Fair enough. Speaking of Hawaii and a good photographer, we’ve got a good guest, Carl Jensen. You’ll notice that the theme of this show is bad transitions. Carl is a good friend of both of ours, and he did something cool. He learned about financial independence, relatively speaking, fairly late. He was 37 and he still achieved it in five years with a wife, kids, and all that stuff. If you’ve got a family and that’s your excuse, he’s the one that’s going to refute that excuse. Anything you’d like to add about Carl before we get on the show?

I loved the show. I feel like it was the most that I have giggled in all of our shows. It’s funny. I love the way he tells stories with a straight face and he says something off the wall. You’re like, “Whoa,” and it makes you laugh. It’s a fun episode.

Carl is an amazing person. Read the whole thing. In the end, he gives a good nugget about what to look for in neighborhoods to let you know that it’s probably a good neighborhood to invest in. I love that little nugget at the end. Let’s get him on the show.

Mr. Carl, welcome to the show. How are you doing?

I’m good. How are you, Craig? How are you, Zeona?

I’m so good. Somebody is asking about me.

Carl, you’re the first person to ask about both of us. Z is feeling all up and giddy.

I would have said Zeona first but you asked the question. C comes before Z.

That’s what most people think. Alphabetically, I come first. Speaking of alphabetically, Carl, how did you find out about financial independence? We’re good with transitions here.

ITF 39 | Live & Flip
Live & Flip: Live and flip is where you buy a property as your primary residence. You live in it to increase the equity. So you can buy a house for $176,000 and sell it for about $600,000.


That might be the worst transition in the history of a podcast. It’s good. It’s entertaining. I knew nothing about financial independence. Every mentor I ever had worked until they’re about 65 or 70. They retired, went off to Florida, they died, and that was it. I’d never known anyone to retire at anything younger than that. I even had a relative who I believe died at work so this is all new to me.

How I discovered it was I had this bad day at work. I remember it was October of 2012. I was working on the software project and I thought I introduced a bug into the system and I couldn’t take the stress. I barely ate anything for a week. I remember being huddled over the toilet because I was so stressed and the thought I had to myself at the time was, “Holy crap. This job is going to kill me. If I stay here, I am going to die from the stress.” I’m not trying to be melodramatic or anything but the stress would have taken me out. I was 37 back then. I googled something like, “How do I retire early?” or, “Do I have to work my whole life?” Up came two blogs. I remember one was JT Roth’s Get Rich Slowly and the other one was Mr. Money Mustache.

I started reading Pete’s first, Mr. Money Mustache. I remember reading it and here’s this guy talking about how you retired when he was 30 or 31 and my first thought was, “This is a bunch of crap. What kind of scam have I found? No one in their life retires when they’re 31. When’s the sales pitch going to come for the multilevel marketing thing?” I gave it a chance and I started reading it and I’m like, “I don’t want to live on $24,000 a year like this crazy person on the internet does but it’s a simple math problem, the 4% rule. I have to save some money and I could quit my job. It came down to 25 times the expenses.” That was it. I was on my way. I did not have nearly enough to retire at that time but I have since retired and I stopped working in April of 2017.

It took you basically five years to go from, “I learned about financial independence,” to, “I’m retired.” Because I know that you had a wife and kids when you discovered this whole financial independence thing, so how did you convince your wife who is Mindy, and I’m sure people reading know who Mindy is? Did you have to convince her or was it easy? What happened there?

I want to pick up and address the first thing you said. You said it only took you 4, 5 or whatever years. I already had savings up to that point. I grew up extremely financially secure but my parents weren’t the best with money as I saw it as a kid. It terrified me. It scared the crap out of me so I said, “As soon as I get a real job and start making money, I’m going to shuffle the way.” I had about $500,000 in retirement savings and about $150,000 home equity and that was about half what I needed to eventually quit.

Back to the Mindy thing, I read this and I remember this day like it was yesterday. I’m looking through all this Mr. Money Mustache now or later, I realized it wasn’t a scam and FIRE was a real thing. I remember I was in my office and Mindy was in the kitchen. I ran up and was like, “Mindy, check out this thing I discovered on the internet.” She’s like, “What are you talking about?” I was like, “I discovered this. This Mr. Money Mustache guide.” She’s like, “What the hell are you talking about? Talk slower.” I’m like, “In this blog, he talks about money. If we continue to save, I can probably stop working in 4 or 5 years.” I thought she was going to be like, “You’ve lost your mind. This is insane.”

Her response was like, “Okay.” I’m like, “I came up with this insane idea that I’m going to quit work in a couple of years or however long it takes us to achieve the savings and you’re perfectly fine with it.” She was. I asked her about it later and she was like, “I saw how stressed you are and how unhappy you are at the time so I was fine that you found a way out of it.” I’m thankful that I had a spouse on board and we made a big change shortly after that by selling our house. We moved from a 4 bedroom, 4,500 square foot house to a 1,200 square foot house with 2 beds and 1 bathroom for four people. She was accepting. She didn’t complain one bit. We were happier in that crappier house, which I eventually would fix up.

That’s incredible. I remember you told me something about your neighbors too about some doll or something. You know the story. Is it the great American doll? I don’t even know what they’re called.

We moved to a certain area in Colorado, which rhymes with Barker. It’s fine. We made some great friends there, but the people in our particular neighborhood did not have the same values as us. I remember the first week we lived there, our four-year-old daughter was hanging out in the driveway and this girl came up to her and said, “Hello. How many American Girl dolls do you have?” My daughter is like, “I don’t know.” This other girl is like, “How many American Girl dolls do you have?” My daughter’s like, “I have a couple of dolls, but they’re not American Girl dolls.” This other girl shrugged her shoulders, turned around, and walked off.

Here’s this little kid already in a rat race for this material crap, in this case, a $100 doll and was judging my kid. I went to the house and I was like, “Wife, Mindy, I don’t think we could stay in this neighborhood.” A couple of weeks after moving there, her house was back on the market and we ended up taking a loss on the house for about $13,000 but it was worth it because we moved to a community we were happier with and we saved a lot of money by living in a cheaper house that we would fix up.

What I would reiterate is it matters so much about who you surround yourself with. If you were stuck with those people naturally, you would be in the environment of people building materialistic things, even if it doesn’t align with your values. Your values are more subjective and it would probably switch. You wouldn’t be sitting here right now if you stayed there.

It’s so important. If you get anything from this podcast, what Craig said there might be the most important thing. One of two things could have happened. Either what you said would have happened and we would have changed our values and bought expensive cars to try to fit in with these people. Our daughters would have grown up differently or we would have stayed who we were and probably not gotten along with these people.

Maybe I’m extrapolating here and exaggerating but maybe we wouldn’t have had many friends there because they would have seen that we had crappier cars than the high school students in town had. We wear old clothes and didn’t give a crap about the same stuff they did but community is so important. Where we are now, we have people who have similar values so we’re cool hanging out in the backyard having a discussion or playing board games. It’s life-changing. The number one best thing you can do for your life is to surround yourself with people who share your values.

I completely agree, which is why you live in the FI capital of the United States now, but where did you live when you first heard about FI because it sounds like you went to this town in between that rhymes with Barker? Where were you before then?

We were living in that town that rhymes with Barker.

Community is so important today—to surround yourself with people who share your values. Click To Tweet

That’s when you made that big switch. At one point, when did you meet this crazy person that wrote that blog? Now I know you guys are best buddies but where did he come into the mix here?

After I told Mindy about this, I’m like, “I’m going to send that guy an email,” because we had already determined that we were going to move and our plan was to move back to the Midwest where we had moved from. I’m like, “This guy talks about this place called Longmont on this blog. I’m going to send this person from the internet and email. Maybe he’ll give us a tour of Longmont.” I didn’t expect him to reply.

His blog has grown a lot but it was still pretty big back then. She’s like, “Yeah. Whatever.” I sent him an email and the next day I had to reply back. He’s like, “Longmont’s pretty cool. People are more normal here. You might fit in better here. If you’d like to have a tour, come on up.” I’m like “This crazy anonymous Mr. Money Mustache dude from the internet who has cost us to make this huge life pivot and reconsider our whole life is inviting us up for a tour.”

I remember driving up and Mindy’s fearless. Nothing fazes her. I was shaken a little bit and I’m like, “I’m going to talk to Mr. Money Mustache. I hope I don’t make a fool out of myself.” I was talking twice as fast. When we got there, he gave us a tour of Longmont. Mindy’s like, “Let’s buy a cheap house or maybe even rent in case this doesn’t work out.” That’s what we ended up doing. We tried to rent but no one would give us a short-term rent so we bought a house because it was the path of lesser resistance and we were happy there so we stayed. We are here to this day, not in that same house, but still here in Longmont.

What year did you go ahead and buy that house in Longmont? What year are we in?

We are in 2013 at that point. It would have been June of 2013.

It’s a year after discovering financial independence. You’re making big moves. Were you making big moves before that? You’re living this extravagant life, you’re an engineer, you’re making good money, you live in this 4,000 square foot house, and you mentioned you move to a 1,000 square foot house or whatever it is. That sounds like a big change but did you make any other big changes in that first step in reducing your expenses?

Despite that big house. We’ve always been pretty frugal. We have the same car we had then, a 2003 Honda Element and this 2010 Maz. They both have 200,000 miles on them so we didn’t have to pivot that much. The one thing we did do is start keeping track of our spending. I was surprised because I had this vision in my mind that we were spending $40,000 a month after the mortgage and it turned out that wasn’t quite correct but it was 50% more than that. We started paying a lot more conscious attention.

We started spending more deliberately and carefully and reviewing everything and even entering all of our expenses into a spreadsheet which is my opening because you see how much money you spend on certain things that you didn’t realize. It’s like, “Holy crap, we spent $15,000 on travel last year. We better figure out how to work the credit card hacking thing.” It’s not many changes, but we are more conscious of our spending and more thoughtful about it.

That’s the first big step. If you’re looking to reduce your spending, you need to track it, or you can’t improve a metric without tracking it. I love that you did that. The biggest thing you could do to reduce your expenses is to find a cheaper cost of living and that was the move to Longmont. What did you do with your house in Longmont?

We bought that thing in June 2013. We originally bought it as a rental. We were going to fix it up a little bit. It was in bad condition and it had been a rental and it had been neglected. The thing had mice and ants. It was in a shoddy condition. The plumbing was clogged up which I found out the hard way. That’s an ominous story. We were going to fix it up and turn it into a rental and move on because it was so small and we didn’t want to stay in a house that small. One bathroom with four people can be rough. First world problem, I know but still.

We decided we liked the street. It was a dead-end street and there were lots of other kids so we’re like, “What the heck? Let’s fix this one up a little bit more than we thought we would and stick around.” That’s what we ended up doing. We ended up popping the top. We put another level on it. The 2 bed, 1 bath became a 4 bed, 3 bath, and I ended up doing most of the work on it, which was good financially. It worked out well financially, but not so good lifestyle-wise because I devoted large parts of my life to it.

This is a unique strategy. You guys made it popular, the live-in flip where you buy a property as your primary residence, you live in it and you’re living in a construction zone but you’re drastically increasing the equity. Do you mind sharing what the numbers were and how much you bought that for in 2013? How much did you end up putting into it and maybe what it’s worth now or if you sold it?

We did sell it so this is a great discussion. We bought it for $176,000. We put about $125,000 into it so we have somewhere around $300,000 into it and we sold it for about $600,000 and we sold it months ago.

That’s the end of an era. That’s where we had all our little potlucks and it’s sad to see that place go.

ITF 39 | Live & Flip
Live & Flip: The two out of five-year rule means that if you’ve owned and lived in a house for two of the past five years, you could sell it and pay zero capital gains up to $500,000.


Z, that’s where we met.

Memories. We should go back there and put a little plaque by the sidewalk or something and put our handprints in it.

Write our initials in the driveway. That’s incredible so you got $300,000 of equity in a property. How much of that do you think was because the market appreciated versus how much that was because you put your blood sweat and tears into it?

If we hadn’t done anything at all to it and left it as is, I suspect we probably would have at least doubled what we bought it for, it probably would have gone for around $300,000. That’s probably accurate. This is unusual but it appraised for $25,000 to $30,000 more than we sold it for so we sold it for a small amount of money. We also had multiple offers on it too.

You mean you made $150,000. Correct me if I’m wrong, but that’s fixing things up. Do you like fixing houses up or are you doing it for the money?

I do. I would not recommend this if you did not enjoy it. Especially when you already have enough. Back then we did not have enough so part of our strategy is to fix that house and make it nice and make it look like the nicest home on the street. When it did come time to sell that would give us a big boost financially. I still do to this day even though we have enough, this house I’m sitting in we’re in the middle of a project right now.

Even though we don’t need the money with that so this will probably be the last major rehab we do. I’ll always buy something that needs some work because I like the idea of always having some sweat equity and I do enjoy the work so I don’t think I’ll ever buy anything perfect no matter how much money we have but it won’t be a major project the last one or this one is.

Back to the financial independence thing. You started in 2012 and you got there in 2017. This house maybe was a big part of that. What was your source of passive income? Was it real estate? Was it stocks?

What we did was we had done previous flips to this. We fell into it by accident. We fixed up a house and made a whole lot of money from it. We learned about the 2 out 5 year rule which means if you’ve owned a house for 2 of the past 5 years and lived in it for 2 of the past 5 years, you could sell it and pay zero capital gains up to $500,000 for a married couple. That’s crazy. It’s $500,000 in capital gains free. We had done Mindy’s condo and an old house. This is 7 or 8 now.

We took the gains from these houses and we would invest them into the next house. With any extra money, we would put it into the stock market. I used to be a big buyer of individual stocks. Now I’m mostly an index investor but I still hold individual stocks. Now my passive income isn’t so passive. I call it Spouse FI and that’s because Mindy is still working. Even though she isn’t. She can quit any day. Wife FI or Spouse FI. What would the Husband FI be? Hub FI? That doesn’t roll as well.

Hi FI?

That’s a good one.

When did you feel comfortable at saying and being at the financial independence mark? Was it a net worth number? Was it the passive income number? What made you feel good?

It was a net worth number. I wanted to have $1 million and no debt. The original idea was to pay off the house. After I decided that, I decided that leverage was probably a better idea. If I can borrow money to fund a house at 3%, I’d rather keep that money in the house and use the excess to invest in index funds or the stock market. I retired in April 2017 when I had $1,120,000. The $120,000 was what we owed on the house at the time.

Perfect number. He’s like, “I can quit on Thursday.”

When flipping, never buy something perfect. Instead, buy something that needs some work.  Click To Tweet

Engineer mind. It is super numbers orientated. I remember that it was April. Carl, we met in April 2017. I don’t know if you remember, but I had started at BiggerPockets and you were sitting on the couch. I was like, “Who the hell is this old guy sitting here?” Naturally, we somehow had a conversation and I was like, “You retired? That’s cool.” We started talking and we’ve been friends ever since. Big things have happened. You’re at a net worth of $1.1 million back in 2017. Now, this episode is set in 2021. It took you 30 or 40 somewhat years to hit that first million. You don’t have to disclose your net worth if you’re not comfortable with it but I’m curious about where you are at years later to show that exponential growth because I suspect you’re much smarter about that.

This is insane and I do post it on the blog, in the interest of a philosophical thing. I wish we were all a little bit more open about money. A lot of problems with society are caused by people competing against each other and trying to show worth that they don’t have. If we were all a little bit more open about money, we’d all be better off.

Back to your question. In April of 2017, we had the $1.12 million and now we passed $4 million, which is crazy that I have to pinch myself. It sounds like an insane number. When I was a kid, I remember thinking, millionaires were these people who drove Ferraris, had top hats, and lived in these huge ocean houses or whatever.

Top hats? What era are you from?

Monopoly. That old dude with the monocle.

Once you’ve got this mindset of financial dependence and money, it tends to grow. You weren’t being super methodical or intentional before. Sure, you were saving, maybe 10% or 20% of your salary being an engineer, which was, which is great. You’ve got good skills that make money but now you found financial independence. It took you five years to make $1 million. Four years later, you’ve quadrupled that to $4 million. That’s the power of the compound effect. The journey is not over once you hit that million. Z, do you have anything to add?

It’s also about believing. It’s something about knowing that path. Once you achieve it, you’re like, “I can make $1 million.” You need to switch that in your mind and it’s like, “I can do that again and again.” I feel like that’s true when you buy your first house. You get to this place where it’s like this mountain. Will I ever be able to achieve this? The second one’s a little bit easier. Down the road, you’re like, “I could buy a house every three months.” It’s no big deal.

Carl, a quick recap of your story. In 2012, you found out about financial dependence, you started making moves in 2013 by buying that crappy 2 bed, 1 bath, you put a whole bunch of money into it and turn into a 4 bedroom, 3 bath. You’ve already been doing these fix and flips for some time now but all that excess money that you had, you’re siphoning away and putting into stocks and index funds. Maybe it’s not the highest return, but certainly one of the safest returns and the least amount of work. By 2017, through the strategy, you were able to quit your job as an engineer. I suspect you were saving a lot more in your engineering role from 2012 to 2017. What was that shift? How much were you saving before that? How much were you saving after?

We saved a ton, especially at the end of my career. I discovered it would be better. I remember my employer always wanted me to go to a contract employee relationship and I never wanted to. I’m like, “I want to stay W-2.” He’s like, “We can tell people your pay if you’re willing to go contract.” At that point, I learned that if I do that, I can contribute a lot more to a solo 401(k). I could do an employer match of 25% in addition to the max there. In the last 30 years of my career, we’re probably putting away.

This is the top of my earning when I did have that contract basis and I had to get my own insurance but we were probably putting it away $75,000 a year. I’ve never looked at the number but it was not insignificant and our core expenses were very low. At that time, our house flip was almost done, our house remodel was almost done. two cars paid off, and cheap insurance so we weren’t spending a lot. We were putting as much money away as we could.

The general thesis here is you’re buying a car that gets you from A to B. You’re buying a house that is livable, but not super extravagant. You’re mentioning a lot about the self-directed 401(k), solo 401(k). It seems like you do like retirement accounts. I wanted to get your feeling for the retirement account. I know a lot of people think, “I don’t want to put money into a retirement account because I’d rather invest in real estate and make a higher return. I don’t care about that tax benefit.” What’s your thought there?

I do both. We have a self-directed solo 401(k). We’ve done private lending, syndication deals, and all those cashflows are held in a retirement account because I don’t want to pay taxes. When you’re a high-income earner, these four tax retirement accounts can be a great thing. If I max out 401(k), it’s $19,500 and I’m in the 25% tax bracket. I’ve saved myself $4,750. That’s pretty incredible. On the other hand, there’s a lot of benefits to after-tax, especially Roth accounts, where you’ve already paid the taxes on and they’re going to grow tax-free.

Our strategy is, after Mindy leaves, we’ll start doing conversions. We’ll take our Roth or our 401(k) accounts and convert them to Roth where we’ll pay the income tax on the money. If we roll $100,000, from the 401(k) into the Roth. We have to pay $100,000 in income tax, but then that money grows tax-free from that point on.

There’s no right answer that you can tell everyone. It’s different for everyone. If you weren’t earning as much, I would say you are towards a Roth and there’s nothing wrong with real estate either. We love real estate as an investment. We go where the opportunity is and right now, there’s not a lot of good vocal opportunity in real estate.

It doesn’t matter what you do as long as it works for you and your goals. One thing you describe fast there was, if you want to look this up, it is a bit of a confusing concept, but it’s called a Roth Conversion Ladder. It’s the idea that you’re investing money into your 401(k), which is a before-tax account. That’s in the assumption that in later years you won’t be working so you’ll effectively have an income of $0. You can then take money. When you take money from your 401(k) and convert it, which is a before-tax account converted to the Roth IRA, which is an after-tax account, that is a taxable event.

ITF 39 | Live & Flip
Live & Flip: The most important part of a live and flip is to do the analysis. You have to look at your city, the neighborhoods, and the specific house.


That’s the $100,000 of taxable income that Carl mentioned. If you’re making $300,000 a year, that is a huge tax bracket. Whereas $100,000 a year is a smaller tax bracket and basically you’re getting some of that money that would originally be taxed and you’re getting that tax-free. It’s a little loophole. The mad scientist was the one that popularized that. Definitely check that out if you want to learn more. It’s a bit confusing. I remember I had to read it over ten times before ingraining it into my head but my head is a lot thicker than some others.

I wanted to ask you as well to talk about the investing from your 401(k) because you were saying you invest in some syndications and I know I’ve talked to you personally about that. Can you elaborate on that, so people understand what you’re doing there?

I had never known about this type of account. I learned about this in 2016. You could do something called a self-directed solo 401(k) and I’m pretty sure you can only do this if you have your own corporation. If you’re a contract worker, you can have this type of account. It’s an investment account, it’s similar to the 401(k) that everyone knows about, except it broadens what you can invest in. There are a couple of things you can’t. You can’t invest in art and collectibles but you can buy real estate with it.

I can own a rental house in a self-directed solo 401(k). There are rules around that. I can’t manage the house myself but the beautiful thing is any income that comes into it goes back into the 401(k) so it’s not a taxable event. I especially like these for syndication deals where I get quarterly payments and a big payout at the end but all these payments are coming back to me tax-free.

It lowers my tax burden and also makes tax time a lot smaller of a pain in the butt because I don’t have to worry about these accounts until I withdraw them or do the conversion at some point down the road. Right now, we’ve got 3 or 4 loans in them and maybe 7 or 8 syndication deals and two sets of mortgage notes. All those produce quarterly or monthly income. It’s great. It simplifies my life and gives me income if that’s your thing.

I need to come to you for syndication deals.

Do you find that managing all those things in your retirement account is exhausting? It sounds like you’ve got 11 or 12 different investments in there.

I used to keep track. I had this Excel spreadsheet where I calculate the IRR and put the numbers in every month. I got lazy and thought, “Why the hell am I doing this? I’m not going to bother with this anymore.” The other thing is I haven’t done a syndication deal because the numbers have gotten worse as the economy has heated up. I’ve lost interest in keeping close track. That part of my portfolio doesn’t consume any of my time because I don’t care. I should probably care more but I don’t.

If you’re going to borrow money, borrow from Carl. He won’t bother you.

It sounds like you’re doing fine not caring. You still quadrupled your net worth. Something’s working. I’m curious how you are now. Have you loosened your purse strings a little bit being Fat FI?

I have but not in any large way. The part of my life I find matters is the small things. One memory I have is when I got my first paycheck at my first real job. The first thing I did with the paycheck is I deposit it. I went out to the local grocery store and bought a pound of meat, which I hadn’t done. I made myself sloppy joes. I still have that memory like it was yesterday. It was because I was living this life of destitution. It might be the wrong word. I ate crap for all my time in college because I had no money. It took me a long time to get past that. I wouldn’t buy Chipotle or anything like that. I don’t think deeply about buying a burrito.

I still think about big purchases. We still have our old cars. The computer I’m using is from 2014. It works fine so no need to replace it. It’s the small stuff I don’t waste time on. It’s not even money but it’s a lifestyle thing. You only have so much capacity in your brain to think about stuff throughout the day. What I came to is why the hell are you worried about spending $8 at Chipotle or buying this thing at the grocery store or whatever? If it’s under $20, you should stop worrying about that. Even if you’re going for FIRE, that stuff matters. The cup of coffee a day doesn’t matter that much. You have to get housing and vehicles right. If you get those two right, those other stuff matters a lot less.

I like hearing that.

We’re going all over the place here. I want to touch on the syndication thing one time. You mentioned the syndications in the retirement account. I’m thinking about investing in my retirement account. Correct me if I’m wrong, Carl. I’m always under the impression that a big advantage of syndications is the cost segregation studies that allow you to take a massive amount of depreciation, which results in a net loss in your taxes. That can convert over to your natural taxes and then you reduce your tax that way. Are you able to take that tax loss if it’s in your retirement account? How does that work?

You bring up a great point, Craig. I’m pretty sure you’re right. I cannot take advantage of any of that. I’ve heard of people taking the same thing with investing in startups. There are all kinds of costs involved. I have a friend who does that. He said that he’s made almost as much money from the losses in the startup than he initially put into it. If it ends up making money, it’ll be all profit. That’s a great reason not to do it the way I have, through the solo 401(k).

When you're a high-income earner, having a retirement account could be a great thing. Click To Tweet

I wanted to make sure all the cards are out there. If you are going to make a decision about investing with your retirement into a syndication, you know the upsides, which are plenty. You also know the reasons why people may not do that. Z, is there anything on this thing you want to add?

I want to see if you had any tips for live-in flippers, a couple of things that maybe you would do differently, or what you’ve learned over time?

The most important part of a live-in flip and my idea is to do the analysis. I’m living in a live-in flip that’s going to make us a crap ton of money. This one worked out so well. It’s amazing. I have to pinch myself every day. I can’t believe we got this house for what I did. The thing about it is it took us two years of searching before we found this. If you’re serious about this, you have to look at your city, you have to look at the neighborhoods, and you have to look at the specific house.

What we would do is we would hone in on an area and subscribe to emails from your friendly realtor. You look at the listings that come up every day and study them. Look at every single house price, drive by them and see them. What you want to get to is a point where you see a listing and within a minute, you know whether or not it’s something you can look at. You can click on it and see the price. Click through ten pictures and know whether or not you should pursue it. 99% of the time, you probably shouldn’t, especially in a hot market where it’s hard to find stuff.

It takes work. You can make a lot more money from a live-in flip than you can from the stock market. Like real estate, you’re in more control but you also have to do the research. It’s not like an index fund where you set it and forget it. If you’re going to do the live-in flip in a place like Colorado, it’s hard to find good labor that’s affordable.

For example, the basement I’m sitting in, it’s almost done. I’ve got $13,000 into it. If I would have paid someone to do it, it probably would have been at least $50,000 but I’m thinking closer to $75,000. I had to take out an egress window. I had to break it up on the basement floor. It would have been 5X to pay someone. If you’re going to do it, take a look at the labor. If you’ve got contractors in your family, that’s a wonderful resource. If you don’t have those types of people, don’t expect that you’re going to easily find that either.

That’s a good tip. Would you mind going into the numbers of those deals quickly as we’re wrapping it up because it sounds tantalizing?

This house originally came on the market. It was $450,000. We ended up getting it for $365,000. This house was a perfect flip for us. It had been built around 1980. It had not been updated. It was new enough to have modern systems in it. No old and dated HVAC or electricity. It’s old enough to be cosmetically ugly, pink and blue toilets and all that crap. The thing that this house had which turned everyone off was the pool. No one in Colorado wants a pool.

I found it funny. This house, the same model, the same house sold down the street from us two years prior to us buying this for $600,000. We didn’t fix it up. It was in perfect condition. We got this one for $365,000. Two years after that, after the market had appreciated, we’re done because of the pool. No one wants a pool in Colorado. The thing is I could pay someone to demo the pool for probably $10,000 or I could rent a jackhammer for a weekend.

I called the city. I could get a demo permit for $40. Throw all the concrete into the pool, filled up with dirt for $1,000 in a long weekend. I could get rid of the pool myself. It was funny. We found this one weird thing that turned people off but they didn’t think past how easy it would be to get rid of it. I bought this thing for $365,000. We’ll probably have about $450,000 into it when we’re done. If it was done now and we’re able to sell it, we’d probably get close to $700,000 for it. We’d have a bidding war for it. This is a hot property where we’re at, a hot neighborhood.

It’s gargantuan. That thing is huge, isn’t it? I was like, “Here’s another hallway. Here’s another room. Where are we going?”

What is the square footage of that one?

It’s around 2,500. It’s not huge.

It felt big.

It feels big because of the high ceilings.

ITF 39 | Live & Flip
Live & Flip: You don’t have to accept anything in life just because you’ve seen everyone else do it that way. You can always find your own path and do something unique.


You’re making another $300,000. Are you planning on selling that one or you’re doing the same thing?

We hope to stay till our kids are done in school. One big drawback about a live-in flip is I’d hoped to have this thing done in six months and then COVID came around. All of a sudden, I can’t work in the house. I have to be a teacher. This one’s going to take a little bit longer than I thought it would. We plan to stay here longer anyway so it doesn’t make that much difference.

You brought in another inherent great thing about FI. When these unexpected things come up like COVID, you can play teacher. Imagine if you were working the actual job and then had to play teacher, you’d be much more stressed than you would. It would be delaying your project.

It cracked me up when COVID happened. I remember all these FIRE haters came out of the woodwork and it was because the stock market dropped. It’s like, “How’s FIRE working out for you now you idiot?” I’m like, “It’s great. I could stay home. I could watch my kids. I could absorb this big hit in my life. Maybe if you have two parents and two kids, it’s going to be a lot more miserable for you.” The joke was on them.

I love proving people wrong. It’s so much fun. That pretty much tells most of your story. I’m sure there’s a lot more to it. At least we can get to the gist in 45 minutes to one hour that we have. Are there any other words of wisdom that you have that you want to share with us?

I don’t think so. The one thing I could say is you two are inspirational because you two have both achieved FIRE. The thing about you two is neither of you did it in a conventional way. You both found your little niches. Zeona, through Airbnb. Craig, through house hacking. You figured some things out, you went for it, and you got it. FIRE is going to be harder for some but it’s achievable if you’re willing to put the time in and maybe leverage your strengths. I hate when people say, “FIRE is impossible. What about this?” It might be harder but you could still do it.

Carl, it’s you and all you guys that have paved the way for us. We achieved it young because we found you guys early. If you found Pete when you were 23, you probably would be in the same position. I’m hearing kids that are achieving it at 21 or even earlier. They can’t even drink yet they’re financially independent. It’s because they found BiggerPockets. Maybe they found me or Z, or whatever it is. The earlier we can make this movement happen, that’s progress. I love seeing it. Z, anything you’d like to add before we go to the final part of the show?

I love that Carl brought it back. He’s humble. It makes me think of every time we’re at a party, Carl is always the one to go around and be like, “Have you met Z? She did this. She’s all about Airbnb.” I’m like, “Carl.” He does that for every person. It’s a sweet trait that he has.

Carl, you’re amazing. You call yourself an introvert but you seem to always be the life of the party.

it’s because I remember how hard it was. I’m still an introvert. You got to work it. I don’t like to see people in a corner staring at the wall. I’m trying to make them feel comfortable because I remember how shitty I felt when I was that person. To help other people, I might be able to introduce someone to Zeona. I’m sure both of you have changed lives before. If I could spend five seconds introducing you to someone and it’s going to change their life, how cool is that?

Let’s head to the final part of the show, The Final Four. Z, kick us off.

Carl, what are you reading? You teased us with this book at the beginning.

I’m reading a book that has a naughty word in it. It’s called The Subtle Art of Not Giving a F*ck.

What do you think of it?

It’s great. I don’t think this book is going to be for everyone. The main point of it is it’s telling you what you should care about and why you should care about it. It turns out in life that most of the stuff you worry about does not matter. You should be focused and intentional about what you care about. Sometimes I’ll read a nasty Twitter comment and I want to respond. It gets me all worked up. I’m like,
“Why do I care about some anonymous person in Estonia? This is stupid of you.” That’s what this book is helping me overcome. You two are better adjusted than me. You might not need this self-help. It’s worked out. It’s well written. It’s great for me.

With enough research, you could make a lot more money from a live and flip than you can from the stock market. Click To Tweet

Never read the comments. That’s the philosophy.

The second question, Carl, what is the best piece of advice you’ve ever received?

I thought about this one. I can’t distill it into a quick couple of words. I’ll tell you a quick story. I was minding my own business and, Pete, our mutual friend sent me a text, “Can you come over to my house and help me with something this afternoon?” I’m like, “Okay.” I go over there and he had rented a tractor. This dude is digging out a foundation in his yard to build this workshop shed thing in his backyard. I’m like, “This is something that an average person would never think about doing.” It’s something he had never done before either.

He watched some YouTube videos. He rented this thing. He had the whole thing permitted. It was all legit and aboveboard. Since then, I paid attention to him. One of his friends came and I see them doing all these crazy things. What I learned from them is you don’t have to accept anything in life because you’ve seen everyone else do it that way. You can always find your own path and do something unique. I’m trying to think of how I’ve applied that to my own life, maybe with my basement remodel. I had to cut open concrete. All these things, I might not have considered. If I were to sum it up into a sentence now that I think about it, instead of making excuses for why you can’t, figure out how you can.

I want to say that Luc has been on our podcast.

Z, what’s the third question?

What is your why, Carl?

My why is to be able to do whatever the hell I want in life. It is to be able to open your life up to opportunity. I used to be terrified of not knowing what my life would look like in five years. I was afraid to quit my job even after I had achieved financial independence. I was afraid of being bored. I was afraid of the uncertainty.

Now I’ve realized that’s the best part because these opportunities come to you, especially when you’ve got time to interact with people. It’s to embrace life and to say yes to the good things and say no to a whole lot of other things. It’s pretty amazing how life will work out for you. Sometimes I never pictured I’d be doing what I’m doing now when I left my job and I like it better that way. It’s so much fun when your life is an open book and you don’t know what the next chapter is going to look like.

I love that. That’s my why too. Carl, you asked us to give you a random question. We’ll give you that question or else we’re going to give you an actual random question. You’ve got a story about dumpsters. Tell us why you love dumpsters so much.

If you’re into a live-in flip or finding real estate, I love to walk around neighborhoods and look for dumpsters because dumpsters are a sign of progress. I walked around my neighborhood and I counted five of them. I probably walked through half a neighborhood so it’s 100 houses. 5% of people are doing some major renovation project and I like to see that in a neighborhood because that means people care about their neighborhood and they’re putting money into their homes. These homes are going to go up in value. My home probably will too because the rising tide is going to lift all ships.

That’s a good hidden gem. Hopefully, people read to this point and get that. The cranes in the city are another popular one that people say. From a neighborhood, I love the dumpster. The fourth random question is a fun one for you, Carl. If you have transported 400 years ago in the past with no clothes, nothing to your name except the body you have, how could you prove to them that you’re from the future?

Where did you get this one? I have to think about that for a second. If I was a historian, I’d have to tell someone about something that would happen but I don’t care much for history so I couldn’t comment on that. You have me stumped. I’m trying to think of an answer. That’s a great question.

Four hundred years is the perfect amount of time where you know what happened in 1492 because Columbus sailed the ocean blue. In 1600, what the hell is going on then?

It would depend on where you were and who you’re interacting with too. What I probably do now that I think about it is id first ask them to give me some underwear. Was underwear a thing back then? I don’t know. I’d cover myself with a leaf and I’d tell them what the earth looks like. Do they know the earth was round back then?

Some people still don’t know that.

ITF 39 | Live & Flip
The Subtle Art Of Not Giving A F*ck: A Counterintuitive Approach To Living A Good Life

That is the answer to your question. I would draw a map of the earth and I would say, “I can prove it to you.” They did know navigation. They could navigate with the stars and all that crap back then. I would draw the earth up to them and tell them, “If you go here, this is what you will see. Don’t kill me. If you think I’m insane, sail across the ocean and not fall off and see this landmass. You could also prove to them that the earth was round too by showing them ships sailing over the horizon and showing them that you can only see the sails and not the bottom of the ship.

We’ll accept that answer. You mentioned the blog. I know you’re a fairly popular blogger. What’s the blog name? Where can people find out more about you?

The blog name is That was how much time I thought it would take to acquire the amount of money I needed to retire after I discovered Mr. Money Mustache. I’m also working on a podcast now and that’s called the Mile High FI Club, Join the Mile High Fi Club.

We will be joining that without our underwear on.

No pants. Thank you so much for coming on, Carl. It was fun to have you.

Thanks for having me too. I appreciate the opportunity.

That was Mr. Carl Jensen. Z, what did you think?

It was a great episode. We bounced around a bit but it’s nice to hear all the aspects of his story. I love that he’s more of a traditional financial independence person but he has a lot of cool real estate knowledge. His wife, Mindy Jensen, is from BiggerPockets. Every time I say their name, I’m like, “The Jetsons,” but it’s not that. It’s crazy to think of that cartoon. We should probably have Mindy on too. It would be fun to hear her side of the story if she was like, “He’s crazy. I didn’t want to do any of it,” or if she was on board.

We should get Mindy on here because she’s a crazy proponent of financial independence as well. I love them because they’re both low-key badasses. If you saw them in Walmart or wherever you’d see them, you would never guess but they’ve got a $4 million net worth and they’ve got a pretty popular blog. Mindy straight-up loves her job with BiggerPockets. It’s the best thing for her. That’s part of FI too. There’s nothing telling you that you can’t work. You have the option to.

You can do what you love regardless of your income.

Carl seems to love fixing up houses. I know that I would probably kill myself and probably a lot of other people if I fix up houses.

Same here.

We’ll leave that to Carl, Pete and Luc to do all that work, and we’ll talk about it here.

I wanted to put in one last plug for Studio Shed. When they were talking about Pete digging up his backyard, they were putting in a studio Shed project that you can hear about on his blog. Studio Shed is owned by friends of mine that are here in Hawaii. They’re going to be building a studio shed house and they do these cool prefab sheds that can be for storage but also additional living spaces and stuff. It’s a cool company.

Tweet:Instead of making excuses for why you can’t, figure out how you can. 

If you’re looking to do that, check out Studio Shed, especially if you’re in Hawaii. That’s it for this episode. As always, please leave us a comment to review or a rating. We always love to know what you’re doing. Feel free to interact with us on Instagram. I’m @TheFIGuy. Z, what’s your handle?


That’s it for this week. We’ll see you all next episode.


Important Links


About Carl Jensen

ITF 39 | Live & FlipI’m a family guy living in Colorado with my wife and two young children. I studied biology and chemistry in college, but somehow turned into a software developer. I’m 41 and my goal is to retire in 1500 days at the age of 43.

From as far back as I can remember, I liked to save and earn money. As a young child, my parents paid me the princely sum of 2$/week to mow the lawn, trim the hedges and pick up piles of dog logs. I loved it. Well, maybe not the part about the dogs.

My grandmother also helped form my monetary policy by harping on my sisters and I about saving money. Whenever visiting, grandma would sneer at us and say, “SAVE YOUR MONEY!!” I was half scared and half amused, but the message sunk in.

In college, one of my girlfriend’s professors recommended that she attend a particular money management seminar and I went along for the ride. It was a weekend class run by a non-profit group that taught the basics of saving money and investing. The presenters discussed mutual funds, the importance of starting early, compound interest and a variety of other topics.

This may have been the most valuable weekend of my life. The fire was lit. When I got my real first job out of college, I spurned desires to buy a nice car and most other pent up material urges. I maxed out my retirement accounts instead. Saving always came first.

I found a wife that shared my beliefs. In addition to maxing out our retirement accounts, we also started flipping houses. We would buy an older home, fix it up over the course of 2 years and then sell it. Because we lived there for at least 2 years, we were free of any capital gains. Life was/is good.

However, I’ve always been a bit disturbed by the American consumerist mentality. We live in a disposable society. Some people will trade in perfectly good car just because they want a new one. Others buy new wardrobes every year or $500+ purses. I can’t understand or relate to this behavior, especially when these flashy items are financed with credit cards.

At the same time, I started reading about other folks like myself that took it one step further. They saved and invested like me, but also retired early in life. I sat down and figured out how I could do it too. At the same time, I read a post from Mr. Money Mustache about the value of making a goal public. The idea for this blog was born.

I hope to accomplish a couple things here at

In closing, I hope you learn something here and I look forward to learning something from you.

Mr. 1500, 1/6/2013