I Became a Real Estate Investor @ Age 12 and Didn’t Know It


My son asked me a question recently that many people looking to become a real estate investor have asked me in the past, “When did you become a real estate investor?”  I’ve always answered that question as “2006,” the year my wife and I purchased our first rental property. However, as I reflected on my son’s question recently, I realized I was “thinking” like a real estate investor at 12 years old, made an academic choice when I was 17 to be a real estate investor, had the opportunity to be a real estate investor at age 24, but bought our first “investment property” at age 36.  That confusion around when I became a real estate investor cost me over $1M dollars in net worth today. I don’t want you to make that same mistake! Think like an investor and your future wealth will accelerate vs. thinking like a ‘renter’ or ‘homeowner’.

Thinking Like an Investor

I remember it like yesterday.  I was 12 years old. My dad and I were sitting in the living room watching “The Lone Ranger”, our favorite TV show on Sunday after church when the doorbell rang.  My dad walked to the door and a lady was standing there. My dad shared some friendly greetings and handed her a check for $625.  He closed the door and walked back to the living room. I asked him, “Who was that?” He replied, “our landlord who came by to collect the monthly rent.”  I asked, “What’s a landlord?” My dad replied, “she’s the lady who owns our house and we pay her each month to live here.”  Fascinated by the moment, I told myself that when I got older, I wanted to be the landlord, not the renter.  

Making Decisions Like an Investor

Five years later when I was 17, it was time to commit to a university.  I was accepted to several universities within the state and a few out of state.  My mom and dad told me that they would pay my tuition, but not my housing. I had free rent at my parent’s home and several universities within daily driving distance.  My decision was to either go away to college and spend tens of thousands of dollars in rent or stay home and live rent free.  Since I was 12 years old, I had a fundamental belief to never want to pay rent because one of my goals was to be the landlord and never a tenant!

I chose to stay home, live rent free, and get my bachelors degree from a local four year university, San Jose State.   During college, I worked part-time jobs and saved as much as possible with a goal of buying my first home after college and never paying rent. When I graduated at the age of 23 (it took me 5 years working 30 hrs a wk and saving my money), I had $30,000 saved up for my down payment upon graduation in May 1993.  This was even before I knew about the 20/30/50 wealth building plan.

Thinking Like a Homeowner vs. Investor cost me $1M in Net Worth

In January 1994, seven months after I graduated, I purchased my first home in San Jose, California.  After moving into the home in early 1994, I thought of myself as a proud homeowner vs. wealth building real estate investor.  That mindset of Owner vs. Investor cost me more than $1M over the next 20 yrs. Here’s how:

Given our home was a previous rental for many years, it was a true fixer-upper, but all my wife and I could afford at the time.  We were excited and now proud homeowners.  Over the next five years we spent most of our spare time and weekends painting the kitchen cabinets, painting the bedrooms, remodeling the bathrooms, and landscaping our new home.  We invested a good portion of our extra income and sweat equity into our “fixer upper starter” home. In 1999, our son was born and shortly after, we decided to look for another home in a better school district. In January 2000, we decided to sell our home so we could buy our next home. 

Being first time home sellers and dealing with a traditional real estate agent, we never thought about taking equity out of our home (cash-out refinance). We thought we had to sell our home in order to have the funds for the downpayment on our next home. Thinking like homeowners, not investors, we could’ve refinanced, taken money out of equity and turned our home into a rental property with passive income.  We also didn’t have a coach or real estate agent to educate us on our options to help us leverage our property to build wealth through real estate over time. Our agent was just focused on the transaction and gaining his commission check vs. coaching us on how to maximize our wealth over time with real estate. Looking back on this, we had enough equity in our home to easily meet the down payment requirement for our next home.  In June 2000, we sold our home for $416,000. Being first time home sellers and dealing with a traditional real estate agent vs. a real estate coach has cost me millions in net worth. In 2018, that very home is now worth $1.2M! Had we kept it, our mortgage balance would be less than $200,000 thanks to our tenants paying down the mortgage and adding to our net worth each month. With a mortgage balance of $200k and home value of $1.2M, our net worth would be $1M+ greater than it is today.  Thinking like a homeowner vs. investor in 1994 and again in 2000, that seemingly simple decision to sell our property in 2000, cost us over $1M in net worth today.

Always Think Like a Real Estate Investor

Yes, my wife and I purchased our first rental property in 2006, twelve years after we could have bought our first investment property in 1994.  I believe life is a series of learning opportunities and we learned a lot in those twelve years on how not to maximize our wealth through real estate.  Today, we have over 45 rental units and always think like investors with a goal of leveraging real estate to build wealth for our retirement, but also to pass on to our children.

Back to my son’s question of when did I become a real estate investor.  Well, I thought like a real estate investor at age 12, made a few mistakes along the way that cost me $Millions, and want to make sure he and others don’t make the same mistake I did.  My son is now a freshman in college and came to me at the beginning of the year with a list of houses off campus that we could buy and rent out the other rooms to his fellow students. We could hold the property for 3-5 years and sell it with the goal of him living rent free during his 3 years and hopefully making enough profit on the sale in 3-5 years to pay for his tuition.  He’s thinking like a real estate investor and how real estate can be a wealth building vehicle to achieve his financial and academic goals (getting a free education while living rent free!).

Get a Real Estate Coach to Accelerate Your Wealth

Real estate is a great way to build wealth over time, especially if you have someone to coach and help you achieve your financial goals along the way.  Remember, if you own a home, you are not a home owner, you are a real estate investor. Think like an investor to accelerate your financial fitness and net worth.