Journey To Freedom: Ep. 5 – It’s true, Adulting Is Easy. | A look at Real Estate Investing as a FIRE Path

Adulting is not easy. It’s made up of tasks we typically dread. They are things that overwhelm us, baffle us or bore us. Often, adulting is hard because we don’t understand the task on a fundamental level–and most adulting tasks revolve around money in some way. Insurance, retirement, savings, taxes, estate planning, bills and pretty much anything personal finance can feel bewildering.

Lauren has made it her mission to take the fear, confusion and dread out of these adulting tasks and make it EASY….hence, her blog and podcast’s name, “Adulting Is Easy.” 

As of this podcast publish date, Lauren has 7.5 rental doors at the young age of 31. She and her husband plan to achieve Financial Independence (and Retire Early, if and whenever they feel like it) in around 5 years, even with a “FatFIRE” lifestyle spending of around $100k a year. She is proof that you can achieve a more luxurious level of FIRE at a younger age and she combines both real estate and stock investing in her strategy. 

Blog: https://www.realadultingiseasy.com/

Twitter: @AdultingIsEasy

Lauren’s Vacation Rentals: https://www.vacationtarponsprings.com/

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Show Notes:

  • Getting started on her FI journey during the Great Recession/Housing Crisis of 2008
  • 22 years old, couldn’t get a job because of the recession/crisis. Eventual job at Toys R Us as manager
  • 6 months paying rent to parents, then apartment hunting. Mom suggests looking at buying a house instead (felt “unheard of” for her age).
  • $125K for first house, 10% down, borrowed from father (“private lender”).
  • Got a roommate and started “house hacking”
  • 5 years at home and then became a full rental.
  • “Looking back, that was one of the best financial moves I could have made–even thought it was somewhat accidental–because it was $740 to live there instead of $800 to live in an apartment.”
  • “In a highly appreciating market, like we have here in Florida, it’s pretty much a no-brainer. It’s going to get you to that first $100,000 of net worth, no problem.”
  • Calculating net worth in her early 20s: Comparing “how much money have I made (working and trading time for money) versus how much am I worth (with real estate)? And the crazy part is that it was pretty much equal! That’s what got me into personal finance and wanting to learn at least the basics. I thought ‘If I was able to do this by accident, I wonder what I could do on purpose.”
  • “A lot of people beat themselves up and say ‘Oh I should’ve done this so much sooner.’ But I look at it the other way, like ‘Hey, at least you didn’t wait any longer.'”
  • Said to boyfriend (now husband): “‘Hey, get a $5,000 emergency fund.’ He started working on that right away. So I was like, ‘Hey, maybe this guy is The One…'”
  • People started asking for financial advie and sister began asking her questions at a very young age. Lauren assigned her “The Richest Man in Babylon” to read. Then started the blog and podcast as a way to literally coach her sister. The first episodes are her answering her sister’s questions with her on the podcast.
  • 2012 she bought house; 2016 the boyfriend moved in. But in 2015 she got promoted to outside sales making “some pretty good money” and backslid a bit as she thought “Let’s buy The Dream House.”
  • Borrowed from Dad (“private lender”) to get the next house as he urged her not to sell that first rental. She repaid a chunk of that to her Dad and he gifted her the last bit as a wedding gift.
  • This is when she took a deep dive into the Bigger Pockets website and podcast.
  • Found a duplex for sale for $170k that generated $1800 in rent. It’s very hard to finance a duplex in her area. Paid in cash and decided to become a real estate investor.
  • Did the math on the Dream House and realized she needed to house hack to get rid of that payment.
  • She’s now in a renovated Bed & Breakfast with 2 additional short term vacation rentals in the back.
  • She was on the Bigger Pockets Rookie episode #42.
  • Put duplex up for sale for $250k.
  • 1031 Exchange the gains to go toward another property. Gives excellent definition of the 1031 exchange.
  • Says there is an example in of of Brandon Turner’s books (from Bigger Pockets podcast). It appears this is the book Lauren is reference: “The Book on Rental Property Investing.”
  • Reading “Psychology of Money” by Morgan Housel
  • “You have to be able to change strategy. Don’t get married to your sunk costs. Have no fear. Be willing and open to try new things. …It may not work. We may not figure it out, but we’re going to learn a lot when we try it.”
  • Details the NIGHTMARE scenario with the pandemic moratorium on evictions
  • “Plan all you want, but crazy stuff happens. You can’t plan on a pandemic.”
  • Despite all that, she broke even and had good appreciation.
  • Made $28k at her first job, pre-tax. The Dream House was $25k in mortage + interest tax + insurance. This led her to house hacking as an option to get rid of that big payment. So she got the Bed & Breakfast property.
  • Currently bringing in $3k each month with the short-term rentals and their mortgage is $2k.
  • “Having a supportive partner is the best thing you could have.” (Husband saw her logic in needing to pivot).
  • Afford Anything podcast with Paula Pant. Here’s the Suze Orman episode where she hates on the FIRE movement.
  • “When you really learn to be disciplined around paying debt off, I think those people are poised (for success). If you can keep that same lifestyle and keep that same discipline and take what you were paying toward debt and invest it…the sky is the limit! And it does happen quickly.”
  • FatFIRE, spends $100k each year
  • Mr. Money Mustache blog (extreme frugality, cycling proponent)
  • “It’s so…RADICAL! There’s no other way to describe F.I.R.E.”
  • “When you think about it, the model was: ‘Work for 40 years and die.’ Then it became ‘Work for 40 years and your company takes care of you. (Pension). Then you think about F.I.R.E. and it becomes this radical, radical idea.”
  • Your Money or Your Life” by Vicki Robin
  • There are costs to working. “I want to be done with a 9-5 job in 5 years. I want it to be optional then. Husband wants to CoastFI. He loves his job. It’s very fluid for us.”
  • 31 & 28 years old
  • They figure every year or so they’ll check in and re-examine their FIRE goals
  • Doing an “AirBnB Swap”