You're listening to cubicle to CEO, Episode 192. Welcome to our retirement mini series on the podcast, where we'll be exploring how various entrepreneurs are uniquely leveraging their businesses to fund their retirement, each through a different investment vehicle. This is a topic I feel most business owners don't talk about enough or adequately planned for. So we wanted to bring forward a few case studies of what others are doing that may open your mind to what options are available to you.
As entrepreneurs, we have the rare privilege of deciding when and how we retire. For many of us retirement isn't necessarily an age, but rather a milestone of financial independence, where the income from our assets outside of our business fully cover our lifestyle expenses, thus, rendering work optional. Desire meant not retirement as today's guests would call it. In this first installment of our retirement series, we're talking to Erinn Bridgman, a money management and mindset coach who helps female entrepreneurs not only design a profitable business, but generate personal wealth. Erinn reveals how she used $22,700 from her then photography business to invest in her first real estate property, which she then snowballed to pay off $100,000 of student debt and build a real estate portfolio worth $7 million. Her current strategy puts her on a path to retire by 40 with an income of $300,000 a year, fully funded by her real estate empire. We're running through all the numbers, profit margins and real estate investing tactics involved. So get ready to take copious notes.
A disclaimer that this conversation is not to be treated as financial advice. The interviews in this series are simply firsthand accounts from entrepreneurs transparently sharing their own retirement plans.
Welcome to Cubicle to CEO the podcast. I'm your host, Ellen Yin, I quit my job without a backup plan and bootstrapped my first $300 freelance project into $2 million in revenue by age 28. On the show, you'll hear weekly case study interviews with leading entrepreneurs and CEOs who share one specific strategy that successfully grew their business revenue. Skip the expensive and time consuming learning curve of testing everything yourself by borrowing what actually works from the best and brightest mentors. You'll also get a front row seat to my founders journey through transparent income reports and behind the business solo episodes, subscribe now so we can grow together every Monday.
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I'm literally saying that follower count doesn't matter. What matters is having the audience of the right size and the right people. You could literally have 1000s of people in your community. And that might not do nothing for your small business. I have seen it with one of my greatest friends DL. She's an amazing sales coach and she was literally making sales like her first six figure year with only a few 100 people in her audience and she still doesn't have a big audience and still has hit the seven figure mark rate.
Natasha smart discernment between creating content as a CEO to drive sales versus creating content to chase vanity metrics is a must listen. Search for the shine online podcast to play the rest of episode 71 And make sure you hit follow on Spotify or the plus button on Apple podcasts to add Natasha show to your weekly rotation. We'll also drop a clickable link below in the show notes.
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All right, friends, I am excited to introduce you to Erinn, who I met a couple months ago at our friend Laylee Emadi's creative educator conference in Dallas. And Erinn is one of our guests that is going to be part of this series on how women in especially how entrepreneurs are preparing for retirement in different ways. So I think retirement is this concept that a lot of business owners kind of don't think about or they push aside, but it's really important. And I don't mean retirement in the sense of an age. I know, in traditional employment, most people think of retirement as an age, typically 65 or whatever social security kicks in if you're in the United States, but as entrepreneurs because we have so much freedom and control over our schedules and our work life and our goals. And because we also have unique advantages and ways to accelerate our path to financial independence, meaning being able to live off of money that you do not actively have to work for within your business, I just thought it would make for a really interesting series to bring in different entrepreneurs who are using the profits from their business, to invest in wealth building assets outside of their business. And Erinn is going to be talking specifically about how she's doing that through real estate. So, Erinn, welcome to the show.
Oh, I'm so excited to be here. Thanks for having me.
Absolutely. Well, I have a list full of questions. So if you're watching this on YouTube, I'll probably be referring to my notebook a lot. But I just wanted to make sure we really get into all the tactics, which is something I love about you. If you're new to Erinn, by the way, she is the host of the Wealthy Woman Podcast, and I had the pleasure of being on her show recently. So she is very much a sister spirit in the sense that she's so willing to be transparent. So I want to thank you for that. But before we get into today's case study, Erinn, let's talk about your cubicle, the CEO story, give us the short version, how did you make that leap? From employee to entrepreneur?
Yeah, so I actually got my Master's in higher education, I was working in that field and really loved being able to develop women in that sense, but I knew that that was not going to be my forever landscape. And in the meantime, I started my photography business, which we'll probably talk about, since that's what's been the beginning of funding our real estate investment portfolio. And I remember my boss Looking at me, and telling me, maybe year three, and she was saying it in like a sort of disempowering way. Erinn you just like, can't work for people like you, you know, you need to be your own boss. And I was like, Yeah, you're right. And so I remember like, I'm a strength coach, I really believe in like leveraging who you are and your strengths to create the life and the business that you want. And so I back then I was journaling through my strengths. And when I came up with my brand, back then that was in 2018, that evolved into coaching that's evolved into what it is now. And so yeah, I was a resident director for four years literally lived in the dorm with 150 women, bless my amazing husband, Brent. And then we made the leap because our photography business was financially stable enough, and I just went full time into all the different aspects of what we were doing back then.
That's incredible. Well, it's funny that your boss was the one to tell you, Hey, you should be your own boss. We don't hear that a lot, typically from our employers, but I know you said the way that it was communicated felt actually disempowering. But hey, kudos to you for for taking it and and running with it in a positive direction. So I'm glad that you took that leap. And your photography business. I know these days, you're primarily a money mindset and management coach, but your photography business to your point, like you said, was absolutely fundamental in helping you begin your investment journey in real estate. So your case study today we're going over how you went from one home one property, which I believe you bought for 18,000. We'll get into the details are not bought for 18,000, but put in 18,000 to start that, and now you have a real estate portfolio worth $7 million. Is that correct?
Yeah, we're, you know, there are some nuances there. It's ever evolving, ever changing. We're actually getting ready to sell off or get out of a portion of our portfolio, but that's close enough.
Okay, well, we'll get into the numbers as it relates to that first part. Pretty because I feel like that's the point that is most applicable to our listeners is okay, if you're running this profitable business and you have extra profits that you want to set aside to invest in real estate, like what does that actually look like? So, tell us at the time that you bought your first property, you were working in your photography business, right? So how long had you had your photography business? And when you decided to pull out that money to invest in your first house, why did you choose real estate specifically,
we began our photography business at the end of 2012. VERY END 2013 was like, I mean, we were literally charging like 600 bucks a wedding, like it was very, very, very new. Like we shot six weddings that year. And then the next year, we shot 30 weddings. And that's the year 2014 that we we chose to start to go into real estate investing. And here's I think a couple of things. One is Brent and I both had full time jobs. And we were doing the photography business. And that was because we just had a desire for more we were crippled with student debt, we had almost $100,000 in student debt that we knew we wanted to blitz, we also wanted to have a different lifestyle. And so that's a really like, well, and this is the beauty of entrepreneurship, we can just go figure out how to make more money. And so that's what the photography business did for us.
And then we kind of, you know, it's a very huge mindset piece, I think that's important like, and I want to talk all about the strategy and the numbers, but to decide that you don't have to go work for money and exchange time for dollars. But you can take a risk, which it is a risk any anytime we make an investment, and have money work for you. And so, Brent and I came to this moment, where we had saved up for us at that time, it was a significant amount of money. And I was like a little more like, let's just like, roll around in this cash a little bit. Let's just like feel that we have all this like, you know, like it's our first time like, having we were married in 2012. So we're like, you know, it's we're two years into marriage, lots of debt, kind of doing this thing.
And there's a really funny story actually how we bought the first one, Brent was learning a lot about real estate investing through bigger pockets, which your listeners, if they're intrigued about real estate investing is a very helpful podcast and forum to start to really learn, I highly recommend that resource. And his dad had invested in real estate. So his dad had a duplex. So he had firsthand like seen how powerful real estate could be. And when Brent gets an idea, in his mind, he's very persistent will say, and I'm all about the concept of investing, I was just a little more hesitant and a little less like understanding of how it all worked back then. But I really believed in idea, I had the mindset like I do want to have my money go work for me.
We said we could take this, it was $22,700. And I'll walk through those numbers, we could go and pay off one student loan. Or we could go purchase an asset that would produce enough revenue to pay off all of our student loans. And it's just like, okay, that's what we should do. And yeah, to risk. But we were educated. We have created lots of principles since then, that we've learned throughout the years, but it's actually been our best ever rental property. And we can get to that story and everything. So I wrote over to Brent in bed, and I said, Brent, if you think this is really where it's at, let's do it. Let's go for it. I'm open to the idea. Let's go for it. And the next morning I wake up, Brent is not in bed anymore. I'm like what the heck, he's rings me on the phone and says I am on my bike, and driving around campus on my bike, and I am looking for our first rental property. And I was like, Oh my gosh. But within a week we had painted the home. So that that's just kind of a fun story of how it all began.
That is incredible. Well, obviously sleep couldn't hold him back right from his dreams. He was like ready to go on his bike, I can just envision that in my head. That's so funny. I love what you said, By the way, I just want to re highlight that for our listeners about how you had that option to take the money you have saved up, you know a little over 22,000 at the time. And you could either like you said pay off one student loan or you could invest in an asset and with some patience and some calculated risk, it could pay off much larger in the long term. And that delayed gratification can be so hard sometimes and especially knowing that there's more risk in that other route. But wow, I loved the perspective that you shared there. So Okay, at this point, you decided obviously you two decided okay, we're gonna use this this money that we've saved got to invest in an asset, you had over 22,000 available in cash on hand. But this first property that you ended up landing, what was the actual cash invested into this property? And how did you finance the rest?
Let's just dive into kind of the numbers on this. And I think for your listeners, as they're trying to imagine, how do I think about making first steps which we can talk a little bit like, tangibly about, but you want to think about, like, what is the advantage around you based on your city based on your skills based on your opportunities, like it's gonna be different in different areas. So like I said, I was working on a campus. And so naturally, like college rentals was like what we were able to start in, which has its pros and cons, but the ability to charge per person allows for a higher rent, and higher profitability per month. So this was just an advantage that we had, I also like, was very connected on campus. So I naturally was able to attract really great tenants and keep it full. So we didn't have like vacancy and all that. So take advantage of the situation that you're in and really understand maybe like, what is that particular advantage for you? So the purchase price you're gonna probably die of the home was at $3,500.
What? Okay, wait, just real quick for context for our listeners? Because I know, I mean, we have listeners all over the world. For some people 83,000 might seem reasonable. Some might seem like a lot. For some it might be like, You're joking. That's like not even a piece of land with a shack, either. Where, where's that? So give us a little bit of context, where were you investing, like, Where was this property located? And also reminder of the year was this 2014.
So this was July 24 2014. Yes, and this was in Anderson, Indiana, which is about one hour north of Indianapolis. And there is a small liberal arts Christian school there. But it's a small town in Indiana. So property homes are not very expensive. And to this day, in our networking world, like there's investors, we know that love to invest in Anderson. And that's not just for college rentals, that's just in general because of their model and wanting to be in on like a lower price point. So yes,
That makes a lot of sense. Thank you so much. So if you're listening, and you're not from the States, that's like the Midwest here. And to Erinn's point, you know, this country is so vast, the property values are extraordinarily different, depending where you live. Okay, continue on with the numbers.
Yeah, so we did a 20% downpayment, which is what most people are going to do. And it was just a Fannie Freddie loan, like a normal mortgage. And we had to actually have my dad cosign on our mortgage, because we had no mortgage history. And because it was not our primary residence. Remember, I was living in a dorm. So this was our first home, which was an investment property, now our primary residence. And so with no mortgage history, we had to have my dad cosign, he brought no finances to the deal, just the fact that he had mortgage history, and so we need him to be in on that.
So 20% of 83,500 is 16,700. So that's how much we bought there. And the reason we get to 23,700, is because we also had to take $6,000 of cash. And what we did with that is, the back house was an apartment above a garage, it used to be the garage that was offered apartment, and they turned it back to a garage. So we took a lot of sweat, equity and $6,000. And we made it into a three bedroom, two bath home. So then we were able to have one mortgage payment, but two separate properties bringing us money. And this is why this is just like an amazing cash cow. It's incredible investment. So in total, you know, that's $20,700 we can go into if you want me to kind of share sort of the cash flow from that investment kind of month to month, would that be helpful to sort of dive into?
Absolutely, as you read my mind, I was actually just going to ask you what was the profit model for this first property? So like you mentioned you you had two technical like separate buildings on site, right? How much were you charging either per room or per property? And how much in cash flow were you making? And then I'll let you answer those two first, and then I have a third kind of add on question to that.
Yeah. So when you're calculating your profit, you have To think about several factors here. And so you want to think about PITI, so that's property insurance taxes, you need to think about all of that. And then you need to also think about, like, your capex. So that's like maintaining the property, those types of things that you want to set aside monthly, in order to be able to make the repair or if the furnace goes out, you know, make it so all of a sudden you have, you also want to think about vacancy, that wasn't something that we had, we had an initial vacancy, but then once we had tenants, we didn't skip a beat. And that's also because, you know, we had college students and stuff like that. So with property insurance taxes, all that the cost was $570. About and including the mortgage, yes, mortgage, insurance, property taxes, all of that.
Dream numbers, okay, continue.
Right, because remember, like, it was an $83,000 home that we put 20% down on, so the actual, like, mortgage is like 60, something 1000, right. So then we got rent. And this is just sort of averaged out over the years that we have it, we owned it for five and a half years. And we did 275 per student. And that was for students in the front. Sometimes it was five, but we'll just say four. So that's $1,100. And then the back house was 675. So our rent per month was $1,775 averaged out our cost 570. So annually, our profit was $13,200.
That's amazing. And of that profit, did you immediately start pulling checks from that property to fund your, you know, your lifestyle, your bills? Or did you keep all the profit in the property? Or did you choose to reinvest into the next property?
It was a combination. So remember, we had an astronomical student debt payment. And so this rental property paid our monthly student debt payments, which was like 400, and something dollars, we were also getting master's degrees. So we were like utilizing it for some of that, we were using it to fund lifestyle to pad savings. You know, we could talk about all that kind of stuff. So it was a combination of lifestyle, but we really wanted to blitz down our debt. And so we also would then like, save up chunks of money, and then pay off for loans based on you know, the interest rate, the size of the loan, and things like that. So it was definitely like a combination, but mostly trying to really like tackle, which is what I teach is, you know, we want to make sure we have savings, we want to work on debt pay down. And then obviously investing we're using the investment to help us create savings and debt paid out at this point.
That makes sense. So for those first few years, while you were trying to pay down your student loans, you were pulling basically all of the profit and deploying it in some way or another right for actual use, whether it was for savings, for debt paid down for, you know, your everyday living bills, but not a whole lot of that profit was actually staying with that property at that moment in time, am I understanding that correctly,
right. So we would maintain a small amount in our bank account in order to pad if we needed to do repairs, you need to do that, too, in order to feel like really comfortable that like you've got that padding, but then you pull off the rest. And this is what we do with our rental portfolio now is now you can pull it off, and you can choose to like take that profit and reinvest it or use it into your lifestyle or whatever the case may be. And so yeah, we were we were pulling most of the profit off, except for what we needed to sort of keep in there for maintenance and repairs.
That makes sense. So from that point at, so this was 2014. Right? In what year did you decide to invest in your second property and then maybe kind of walk us through the like the waterfall essentially, of, you know how you got from one door one rental property to 19? I think that's right, right. 19 doors now that you have in your portfolio. I know you said you might be selling some off, but how did you make that secession work?
We currently have eighteen doors and then two additional doors that we co own. So 20 doors, I guess you'd say, but I just want to highlight one thing is and we can talk more about this too, if you want but think about how much money we injected, we injected $20,700 And then I said our annual profit was $13,200. So think about your annualized rate of return on our money. That is insane, that's over a 50% annualized rate of return. If you were to go to the stock market with $22,700, and pull off over 13 grand every year like, That is insane. And that is one part of the power of real estate is looking at that looking at like, what's my cash on cash return? When am I getting there.
And so just to sort of close out this particular one, we owned it for five and a half years. So overall, we made $66,000 in profit, like over that span of time. And then what happened, which is crazy, we don't have to go super into this is we had a fire, college students remember risk. But the cool thing is, is we were principled. And this has been a huge part of our learning. When we don't stick to our principles. It's painful, and it's difficult. And we make that buys we make bad decisions. When we stick to our principles. We see a lot of success. And that's a huge part of this is you've got to know your principles as you get into real estate and you'll formulate them as you go.
But one of the principles we did is we pulled to insurance policies. And we were annoyed like, oh my gosh, we're having to pay extra on insurance because instead of like insuring the back as like a garage, we pulled a separate home insurance it was more expensive. But because we did that, when it caught on fire, which is insane, and a whole nother story. We have the right policy to cover us and it netted out in over an additional $50,000 In a check to us. And so that property itself ended up profiting us over $100,000.
Inspired by this conversation and fired up to take action, Erinn would love to help you inside her money VIP coaching program. In this episode, Erinn is sharing her real estate investment strategy and her plan for retirement in five years. This reality is only possible because of the critical work she did around knowing the numbers inside of her business and strategizing her financial goals and personal money management. I know you have incredible financial goals to perhaps you dream of being debt free, having a significant amount in savings purchasing your dream home or feeling confident in your business numbers so you can hire that next person or allocate funds for scaling. If you are a female entrepreneur who knows how to make money in her business, but silently paralyzed by the state of your finances, Erinn is opening several spaces in May in June for her eight week coaching intensive designed to revolutionize both your money mindset and money management, you will define your financial goals and create a dollar for dollar strategy to get there using Erinn's proprietary money matrix system. All of this work will be done alongside significant mindset coaching as you redefine your relationship with money by learning your sacred money archetype creating a new habit of abundance tracking and transformative journaling. Apply for a call with Erinn today to see if this program and partnering together on your personal wealth goals is the next best step for you. You can do that by going to Erinnbridgman.com/money-makeover-transformation, we'll also drop the clickable link below in the show notes.
Wow, okay, a fire is definitely something you would never plan for. And I'm so glad that you had put the right precautions in place to protect yourselves in a situation like that. And that's a great lesson and a reminder, the principles like you mentioned being really firm in what you will or will not do what you're willing to risk and what you're not willing to risk when you're making any sort of investment. So I love that you brought that piece up. I'm just curious, before we jump into the rest of the timeline of what you did from that point on, what is one other key principle that you always stick to when investing in real estate that you'd like to pass on to our listeners?
So let's say an overall principle is you have to sort of know how much am I willing to leave in a deal, because that's what's going to happen as you build your portfolio is you're going to leave money in the deal. And so we actually have now a whole spreadsheet system where we put that in and it will turn red, yellow or green. So we decided like okay, like it's a no and we would rather pass on like 100 Maybe Okay, deals are good deals, then get stuck with one really bad deal. And so we're willing to walk away and don't force the numbers. That's a huge thing. And that's why that spreadsheet has been so helpful because it can't You can't like have the human will be phooey like fun little like twisting things around to make it work like oh, probably only like need this much money for renovation? No, you know what I mean? And so really being willing to walk away and stick to your principle of how much money you're willing to leave in the deal. Another huge principle for us is the type of rentals that we want to have. And we base that on a couple of things. But one is like our profit per door. And so those are some really big principles for us that have helped us stay in our lane and find success in building rentals.
Oh, I love that discipline to be able to walk away and say no, because you're right. Real Estate, probably more than any asset class is very easily swayed by emotional decisions, right? Because you know, home is different than, you know, investing in, let's say, a stock, I can see how it's much easier to want to not fudge the numbers, but just justify, like, oh, well, maybe we'll cut back here, or let's just hope that this, you know, catastrophic thing doesn't happen, or let's not plan for vacancies, when in reality, you know, those are things that are not a matter of, if, but when. And so I really love that you have those strong principles that you stick by
One thing that we always say, is fall in love with the numbers, not the house. And that's what we have to constantly be doing.
That's such a good point. So at this point, then, like you said, you have profited over $100,000, from that first rental property. What year are we at now in the timeline? And how did you get into that second property.
I love this, because this is something that can be so attainable for people in lots of different ways. And we did a version of house hacking. And we still owned our investment property at this point, and April 2016, we bought our primary residence. And we chose just like many people who are entrepreneurs who want to see that we chose a project. And House hacking is huge. You could do this by choosing to buy duplex renting out the other side, you can do a lot of different ways of being able to like initially invest in real estate through house hacking. And so we had a conventional mortgage, we purchased our home for $150,000. And we had a 2% downpayment. So our mortgage was 135,000.
And then we use the cash from our photography, business and sweat equity, to force appreciation inside of our home, meaning we took a home that was crappy, and we made it beautiful in an area that was highly coveted in Indianapolis, buy the ugliest house on the best block, you know, that type of thing, because you're going to have natural appreciation there. But you're also going to be able to do things like the forced appreciation. And so that's what we did. And we lived in the home and we cash flowed and we cash flowed in a couple of ways. One was just literally from the profit of our photography business.
And this is why I'm so passionate about all the other work I do with female entrepreneurs, and knowing your numbers in being able to create access in your world in order to then figure out investment strategies. And so this is what's happening behind the scenes in the photography business that allowed us to make our first purchase, we were disciplined in our personal life with our budget and different things. And we were strategic with understanding the numbers in our company and being able to pull off a lot of money. And the same things happening as we're doing house hacking. So I would be like Brent, where the heck is all our money. And I'd be like, in our kitchen with our marble countertops, he's like, right there, the marble countertops, that's where our money is, you know. So and this is takes a lot of discipline to like our friends are out on the weekend, having fun, or spending money on trips and all that like stuff. And we're shooting weddings, we're tiling our shower, we're spending, you know, on paint and grout and all those types of things.
So we initially, we did sort of two versions of renovations within our home. And the first one we did got us to then we had an appraisal and this is really key this is really powerful is we got a HELOC from our primary residence. And so a HELOC is a home equity line of credit. And in February of 2018, we applied for all this with a community bank. And that's something I talked about in the investment PDF is the importance of having relationships with local community banks because like a chase bank won't even like they aren't going to do this. So in February 2018 After we had put a ton a ton of money and sweat equity into the home. We were able to get an appraisal of $307,000
Oh my gosh, double what you paid for it originally at 150,000 for the purchase price. Right?
Exactly. And this is the power of it. Now a HELOC is giving you the ability to access the equity in your home. And so we were able to generally what a bank is gonna do is they're gonna be like, Okay, you get this appraisal from a third party person who comes in, and they have a whole way of assessing the value of your home. So we have that 307,000, a bank is gonna want to have some leverage, because if they need to liquidate the asset or take it, like they need to have some like wiggle room there. So they're generally gonna give you 90% minus your mortgage. So our HELOC was $145,000. So now we have $145,000. We went from, okay, got 20,000 in it, and we had to do the down payment with cash flow. And that's now we have all this equity. And we started to use that to fund our other things, flipping and doing things like that.
And the cool beauty of a HELOC is a couple of things. One, your interest rate is low, and you only have to pay on money that you're utilizing. So if you get this HELOC and you're not utilizing it anywhere, you're not paying anything different from if I were to go have investors that are investing on secure debt with me, which is what we do now. You know, I have to pay on that, whether I'm using it or not whether I'm deploying it or not. And so we highly encourage people to think about it, is there a possibility for you to get a HELOC. And this is a way to even like, get into real estate investing and not even like buy one home, you know, not even buy a house like, you could take that $145,000 And you could invest it inside of your business, if you feel like it's gonna get an incredible ROI for you. And so it's just incredibly powerful. And I love to like really highlight that for people because it's such a attainable early step in real estate investing.
Oh, I love how you're explaining the different ways that you can leverage HELOC as a tool to either fund your business endeavors or to fund further real estate investments. It really just I feel like this conversation is really about how do you create more access to capital, if you don't have a lot of capital, right, which is something that women especially have historically struggled to gain access to capital in the traditional ways via you know, venture capital funding or via bank loans, or whatever it may be. And so this is really fascinating to me, just as a quick summary, because I know, there was a lot of terminology thrown in there.
And some of our listeners may be brand new to real estate, not even from an investment side, but even, you know, owning their own property. So just to make sure I understood correctly. And to help summarize for our listeners to basically what you did is you and your husband bought a primary residence at the purchase price of 150,000. And you put 10% down, so that's $15,000. So you took out a mortgage for 135,000. So all in cash so far is 15,000, then you invested some extra funds to renovate within your home to make the property worth more. This is a question I don't think you answer. So I want to ask how much cash should you spend to do things like you know, the marble countertops and whatever other improvements you made?
Good, good, good, good question. And I'm gonna be honest and say I don't have an exact number because this wasn't a project like a flip what we're tracking all that is our personal residence. But I will say at this point, and it's all probably cash probably 75 to 80,000.
Okay, so if if we take that number and add it to the downpayment, let's just assume 70,000 70,000 plus 18, that's $85,000 of cash that you have now put into this home. And then you're saying it got appraised for $307,000, you went to the bank, the bank give you a home equity line of credit for 90% of 307000 minus the remaining amount you owed on your mortgage, which is 135,000. And that is how you ended up with more than $140,000. of access to capital, right?
Yes, absolutely. And just to say a couple of things, just nuances here of like how in the world when we come up with 70,000. We used like Lowe's credit cards, six months, no interest or 12, like Home Depot, like we really had to gather in order to get us to that place where we could get the $300,000 appraisal. And remember, like this is an investment strategy. Yes, but also, this allowed us to be in the neighborhood we wanted to be in and the dream home we wanted to create and gave us equity and money to keep investing and so like You know, that's again, like a highlight at the beginning, like, what's your need? What's your leverage? What's your ability, like given like, where you're at. And so instead of just going and purchasing a $300,000 home, which we wouldn't have been able to do, and we wouldn't have the equity and we kind of created that along the way.
That makes sense. So real quick touching on what you just said, you being able to fund part of the renovations through 0% interest credit cards for limited terms, to ensure that you know, when those terms expired, that you weren't paying astronomical rates for any you know, remaining balances. When you got your HELOC. Did you use that money to eliminate any of the credit card debt?
Yes, exactly. And we knew this was our plan. We knew what we were doing. It wasn't like, oh, man, you know, we had this whole strategy along the way. At a certain point, like right now, we just bought our second own property at Lake House. And you actually find out you can actually pull a second HELOC. And so you know, when you're thinking about of just like, we can just kind of like flow out the renovations and like we can take our time. Well, then you're dragging out sort of like the timeline of like when you're going to be able to be able to access your cash back through the HELOC. So Brent and I are having the mindset like we need a blitz the renovation so that we can get the new appraisal so we can get the HELOC so that we can get our money back out.
Okay. And just an interesting point, I have an aha moment I had as you were talking about this, circling back real quick, again, to the to the credit cards. I know you didn't take out all, you know 70,000, let's say that used on renovations in credit cards. But even even in a hypothetical sense, let's say you did, you know, the average credit card interest rate is you know, anywhere between like 16 to 28 29%, extraordinarily high interest rates. But basically you're saying like because you were able to leverage a window of time like six to 12 months where it's like a 0% interest, you get to borrow that money for a short period of time not pay any interest on it. And then by using the HELOC to pay down that entire debt, you basically transferred that buying power to a loan that instead of paying 17 to 29%, you're paying me what's the average HELOC,
it's gonna go based on what's happening with that, whatever it's gonna have to stay with prime, you know what I mean, around there. And also, like, I just have to say, like, every bank is gonna have their own nuances here. So like, she said, 90%, I think it's like typically like 89.9, or whatever. But different banks are gonna have different things, right? Because and this is the the beauty of like working with a local bank is an endless, maybe I'll highlight this for everyone, because this is important for he locks, this is important for refinancing, when you're holding an asset, you're going to have so much more creativity and leverage with a small bank community bank, because they are like working within their little investment pool. And so they aren't like held to the same standards or the same like as a Chase Bank or something like that.
So like we will have different situations. And they'll go to committee, our Amy who's our person that we have 15, I think of our mortgages with, she can go to committee and be like, Hey, I you know, because of this asset, because of the history of blah, blah, you know, we're gonna give them at present value. This has been recode when we talk about like the burr method and refinancing normally only going to get like 70% of the equity in your in your mortgage. But she can like go do creative things like that and go to committee and do stuff like that. So that's why it's so critical to be like working on getting relationship with a good local bank that that is investor friendly, and I can do some creative things like that.
I love that takeaway. Okay, so obviously, for the sake of time, even though I could sit here all day and talk to you, you know, property by property, exactly what went into, you know, how you invested and what those returns are. Let's just look high level because at this point, you said you have 20 doors in your portfolio, we've gone over your first two with more specific numbers so that our listeners have a starting point. But for the remaining 18. What is your general thesis around how you're going to use your portfolio to fund your retirement? Like you mentioned earlier, there's an average profit per door or per property right, as in real estate speak, that you're aiming for. What is that? And then also, what are the general benefits of real estate as an investment class that you love leveraging and you want to make sure our listeners walk away understanding.
Yay! This is so fun. I'm really excited to share this part because this is the beauty of real estate because not only is it going to produce cash flow for you, but it also is going to produce long term wealth generating abilities. And I say Brent and I are on a plan to retire in five years. And I'm actually calling it.
I didn't know that. Congratulations.
Yeah. So I'm 35. So I want to retire by 40. And when I say retire, because people ask me, What does that mean? And that I actually have this phrase called desirement, it's not retirement. And people ask, well, what are you going to do? What are you going to do in retirement, I'm going to basically do a lot of what my life is right now. Because I love my life. I love what I do. I love how I coach, I love my everything. But I'm not going to have to have the financial stress of figuring out how am I going to pay for my day to day life. So when I say desirement in five years, it means that my rental portfolio will cash flow my lifestyle. So just be very clear with that. So in five years, I rent and I aim to have 50 to 60 doors. And this is all going to be dependent on like, Okay, well, how much are average per door, but we have, you know, a certain lifestyle that we want to maintain that we know. And we're like, okay, we're willing to pull off a certain percentage of the profit of our rental, our cash flow per month, like we talked about before, so like, we might have a profit of $700 per door, but we're gonna keep $300 and not pull it off, because we want to make sure that that's maintaining the capex repairs, and vacancy. So we are going to get to a portfolio of 50-60 doors, that we can pull the monthly profit and that cash flows are life.
If you don't mind answering totally up to you. What in your and again, because we as entrepreneurs, we have the luxury of viewing retirement not as an age but rather financial milestone where like you said, the the income from our assets equal the lifestyle that we want to live in that looks different for every person. Some people want to live more extravagant lives. Some people want to live more simple as there's definitely no right or wrong. For you personally, Erinn, what does your portfolio have to generate in profits each month for you to be able to maintain the lifestyle that you want in retirement? And I say that, of course in air quotes, I love that term desirement, by the way, I'm totally stealing that.
I love it. I love it. Okay, so you know, if you ask my husband, oh, we don't need and you ask me, okay. And we have like a whole budget, we've got, you know, different things going on. And by then we could probably pay off our primary mortgage, like we could, like, you know, we could do some things to like, have our lifestyle, cost us less. But honestly, be real honest. And say my goal is 300,000 a year, remember, I'm in the Midwest, like I can live off of 300,000 and have a very nice, like, I have my primary like my dream home, I have my lake house, I could travel. And also I know that I'm gonna be able to like generate other money if I want to go on like a three month trip to Europe. So this is like my lifestyle, you know, but it's, it's a cushioned lifestyle. So if I want to make 300,000 a year, divide that by 12, that's $25,000 a month, divide that by an average of $500. Profit a door, that's 50 doors. So that's how we got to that number.
Oh, my gosh, that is so inspiring. I am so glad that you agreed to come on here to be part of our retirement series, because I just think this is going to open so many people's minds to what's possible, and really thinking about how they can utilize the money from their business, to fund their own retirement goal, whatever that looks like. And it may not be retired by 40. And it may not be a lifestyle that requires $300,000 A year or it may be more who knows. That's kind of the fun of it, you get to dream up whatever your vision of your life is. I love how you calculated exactly what you need those 50 doors to be able to sustain that lifestyle that you want. I'm so inspired by that. What else really makes you passionate about real estate as an investment vehicle or as an asset class in terms of generating long term wealth?
Yes. Okay. So, on top of that, so we're like getting that cash flow, and we have 50 doors that our tenants are paying down the mortgage on. So you know, some of our mortgages we've had for already like eight years. So you know, they have significantly started to go past the interest and are paying down our mortgage. And so, in the long term scope of things, I'm going to generate that cash flow generate that life Style, and then I can start to sell off homes. And I sold off one home, they paid the mortgage off with the additional like, appraised value, I can put, you know, setting aside taxes here like $300,000 Back in my pocket. So I am invested in assets that are appraising that I'm not having to pay for my tenants are paying down.
And so this is the beauty of real estate is that it's not just the cash flow. It's the long term wealth building that's happening. And that's huge. And here's the thing you asked at the beginning, like why real estate and something bronchi says to people, and I'll have to say to people when they ask that is, do you want to be the one out of 10? That's sort of the like unicorn that like, builds Amazon builds Facebook app like does the like kind of crazy cool, which cool. And some of your listeners might be that, or do you want to be kind of like the nine out of 10 people that have massive wealth, that build it through real estate, a majority of people are building significant wealth through real estate. Everybody needs a home. It's you know, hierarchy of needs. That's not ever going away. And like I said, a majority of people are building wealth in real estate, which means they are creating tax incentives, and all this types of things that makes it a really advantageous investment strategy.
And so that is why I'm so freaking passionate about empowering women, we know statistically, women are less likely to be investing, they're more likely to not have an emergency fund, they're more likely to be holding their assets in cash, which means they're not investing all of these things. And so I want I'm so passionate about women, understanding their business numbers, figuring out how to create access, so that they can go and build financial stability, and wealth generation.
I love your mission and your heart for helping women be empowered with money. We're so aligned in that sense. And yes, for our listeners, real estate is such an attractive asset class, like Erinn said, because it not only cash flows, but there's tax incentives, tax write offs that you can only find through real estate at times. And then also, there's a long term asset appreciation, which gives you you know, one big chunk of cash injection, if you ever choose to sell it off. So there's so many layers to this asset class. And I think you did such an amazing job today breaking down a very complex topic, and sharing it through the lens of your own journey, which I'm so excited for you to retire in five years. So for our listeners who are intrigued today, after listening to our conversation, Erinn, I heard you have a pretty cool gift for them as a next step, if they want to take that first dive into investing in real estate, so tell us where they can access that gift and what it is.
Yeah, amazing. So you can just go to my website erinnbridgman.com and then go to real estate investing, hashtag real estate investing, and you'll be able to find it right there. We can link the URL. And that is a guide 10 things to do to get ready to get your first investment property, I love to be really practical to make it very tangible. And so that's gonna give people some really good steps to take that they can literally take now. And I just want to say like, it can be really, like you said, a convoluted topic, it can feel really intimidating, like, oh my goodness, millions of dollars, like 18 doors, I wanted to, like bring it back to it started with one door. It started with discipline and knowing my numbers. And it started with the mindset that I'm willing to go and have money work for me that work for the money, which is a shift for many of us in entrepreneurship.
And each of you, if you're leaning in each of you has that first step that you can take, whether it's making that relationship with the bank, whether it's really looking at your numbers and increasing your salary, so you have access, whether it's like just starting to invest to Roth IRA and maxing that out every year. You know, there are very small things that you can do. And small things over time, make huge results. And so if you follow me on Instagram, Brent and I create real estate content. I create content around money mindset, money management, and I love to just like get in the DMS and really make money something that's not taboo sending that It's not intimidating a lot of us as women have shame around money. And I'm here to like break that and just say like, let's talk about it. And wherever you're at, you can make beautiful steps to get to the wealth and the lifestyle that you dream of.
Oh, wow, what a word to end on. Thank you so much, Erinn for your time and your wisdom will drop all of Erinn's links, including that PDF that you can access for 10 ways to get started with real estate investing today in the show notes, so make sure you scroll below and click that go follow Erinn, go shoot her a DM, tell her one new thing you learned and ask any of your questions. She's such an open book. And I just really hope this encourages all of you to think about how you can get started toward your retirement as an entrepreneur. Remember, like Erinn said, it started with one door. It started with $22,000 of profit that she made from their photography business. I know each of you is capable of at least having that right. And so small beginnings big dreams. Thank you all so much for listening. We'll see you in next week's episode.
Hey, Ellen here. Thank you again for tuning in to cubicle to CEO. If you enjoyed today's episode, follow our show on Instagram at cubicle to CEO for more bonus content and hop on the last Tuesday of each month to watch our live after show with recent guests. If you want to support our podcast, text this episode link to a friend leave a positive review on Apple podcasts or rate our show wherever you're listening right now. Please make sure you also hit the Follow button on Apple it looks like a plus sign. Or click Subscribe on your favorite podcast player so you don't miss out on our new episodes every Monday and friends until next time, keep dreaming big
