How I Retired at 28 With Under Market Value Properties

Hello investors and ‘maybe’ investors! Thanks for visiting my little website about under market value properties in San Antonio TX. It is these little bitty affordable homes that allowed me to financially retire at the young age of 28. Below is how I did it.

Oh but wait! We take a break from this message about under market value properties for a random picture of Teddy and me at a construction site :). (Teddy is a Cavalier King Charles Spaniel).

Yo! Where we going, dad?

Ok! So now on with the program! JM —–

In 2008, I financially retired 28 with more than $20,000 per month in cash flow from my residential real estate portfolio – distressed houses in San Antonio TX that I own in cash and owner finance.


Today I still work, but only because I choose to.

This income was not built through the pre-existing advantages of family wealth or connections. In fact, I grew up poor in a small, dusty Texas town west of San Antonio. Our poverty was so utter, my parents sometimes chose between paying the electric bill and buying groceries. Now, that’s poor!

Yet, through rigorous self-discipline and years of hard work (I worked almost nonstop for five years and bought 50 houses my first year alone), I built a large portfolio of distressed, single family homes in San Antonio TX – owned in cash without mortgages.

Below is how I did it, and how you can do it, too.

#1 I Discovered an Inexpensive, Stable Real Estate Market


Before I got into real estate in 2001, I did have some money that I made in the stock market. At first, I wanted to buy a property in Boston, where I went to college. However, I couldn’t buy a front door in Boston with my $50,000! So I came back to Texas. I tried to buy in Austin, where everyone wants to buy…..I couldn’t buy a tree house in Austin.

Then I started to look south at San Antonio. The Alamo City was under the radar nationally and not many real estate investors talked about it. But I liked what I saw: $30,000 houses, stable job market, growing population. I bought my first affordable house there for about $25,000 cash, rehabbed it and made 10% a year by renting it out. That was my start.

During the market crash of 2008-9, the prices of these homes dropped, and I was able to pick up a dozen at 50% under market value. That also helped to grow my real estate portfolio!

Lesson Learned: Steer clear of real estate markets with high entry costs. Lower cost cities are much easier for investors with limited capital.

#2 I Found Reasonably Priced Private Money


So I had my first house in San Antonio, but I was out of cash. Sound familiar? Now I had to find some private capital, but where? Well, in my first two years in real estate, I made 200 or more phone calls per week looking for private money. I also attended many real estate meetings in the early 2000s and always was on the lookout for private capital.

Eventually, through all of my phone calls and networking meetings, I found investors willing to loan me several hundred thousand dollars at 7-10% interest. I used that money over the next several years to build my portfolio of affordable homes in San Antonio.

Usually, I would pay off the loan to my investors within 2-3 years.

Note – I prefer to invest all cash, but there ARE other options. You can, for example, buy nicer houses for $55,000 or so and do 20% down conventional finance, and then owner finance them. Cash flow is ~$300-400 per month with no maintenance. Email me for details.

Lesson Learned: Be prepared to do a lot of work and make a lot of phone calls to find private money. It’s easiest of course if you have family willing to loan you money on reasonable terms. If not, get on the phone, and go to real estate meetings every week.

#3 I Became an Affordable Home Expert in My City


One of the keys to my success is I buy houses many other investors run screaming from! This above house makes my investor 12% per year (owner finance model).

Early in my investing career, I rehabbed houses myself and rented them out. This allowed me to really get to know what houses in my parts of town are worth. I understood exactly what a proper rehab should cost, depending on the area of town. I also learned how to not overspend on rehabbing – one of the mortal sins of real estate investing.

At the same time, I earned my real estate license, and I spent many hours studying prices of houses. One of the most important parts of being a successful investor is getting a house at least at 20% under market value.

Lesson Learned: Study your local market so you can buy houses under market value. Can’t find those kinds of deals? Consider working with an expert real estate investor in your market who can help you find those deals! Offer to help him or her with their business in exchange for turning you on to good, under market value deals.

#4 I Found Good Real Estate Mentors


Getting started in real estate without successful mentors is like going fishing without fishing tackle! Every beginner real estate investor should work with very successful and experienced mentors. I found my mentors at real estate meetings in my city and also at real estate conferences in other cities.

Lesson Learned: Find mentors and real estate partners who have done several hundred deals and have done well in both boom and bust markets. Working alone in real estate as a rookie is a recipe for disaster.

I’m willing to mentor serious, starter investors with $20,000 or so to invest. Get in touch if interested.

#5 I Invest in Cash, for Cash Flow Only – With Owner Financed Real Estate


One of the most important lessons I learned from my mentors is this: Rental real estate CAN be profitable, but owner financed real estate IS profitable.

Under the advice of my mentors, I stopped rehabbing and renting out houses. I evolved my business strategy to an owner finance model only.

Today, I buy a San Antonio investment property for cash (no mortgages ever), do $5000 in rehab, and then resell the property with owner financing to a qualified buyer. There are no overhead costs or property management costs associated with this exit strategy.

(You CAN do owner finance with conventional financing, 20% down, and still earn $300-$400 per month in cash flow.)

I also only invest in properties to make monthly cash flow. Appreciation of the asset is of little concern to me.

Lesson Learned: Consider investing strategies other than renting out property. Owner financing houses is less stressful and is clearer cut in terms of monthly cash flow.

And that is how I was able to financially retire at 28 with my real estate cash flow. And one benefit of making money in real estate was I was able to buy Teddy 🙂 –

I don’t think this is my natural environment.


Want to learn more how to do make real estate cash flow on San Antonio investment property? Give me a shout.

And remember, most of my out of state investment property investors used to buy California investment property, San Diego investment property, San Francisco investment property, and Los Angeles investment property. Here in San Antonio, they usually make 12-15% ROI for great real estate cash flow – without maintenance costs.