A highlight from How Tom Cruz Built a $25,000,000 Section 8 Portfolio in Less Than 8 Years with Tom Cruz
Say what's up to fire your nation and share something that you believe about becoming successful that most people disagree with? What's up fire nation? Yeah, the most obvious thing that I could think of when I was asked this and putting that together is I think it comes back to passion. I think there's that platitude and cliche where everyone says you have to follow your passion in order to be successful and I don't think that's true. I think passions are great for hobbies and passions can also overlap with success. But I think the key to success is providing value. And I found that providing value through real estate in a basic need is the way that I found that success. For example, I'm also very passionate about paintball. I've been playing paintball since high school, but there's no future no professional paintball or any type of income or success from that. So I keep it as a hobby, but I would say that's a pretty big common misconception about success that I've found. Well, let's be honest, maybe there's no way to earn revenue yet. But hey, in this new metaverse, I mean, who knows what's going to be happening as far as Atlas star Atlas and vaccine infinity and everything that's going on in this world. All of these parents that are yelling at their kids were playing video games. Now all these kids are making ten times more than their parents were ever making. It's a crazy world we live in. So you never know, but I mean, let's be honest, as I mentioned fire nation in the intro, Tom is generating $400,000 a month in passive income. And we're talking less than 5 hours per week of work, which we'll get to at the end here. But I want to talk about your beginnings right now. You're beginnings in real estate. Because a lot of people in financial are like, well, this should be cool. I talked about what you've done in the introduction. But you're already at 390 units and probably much more right now. That's a high huge number. So let's talk about your path from one to ten. What did that look like? I mean, it's started very normal. I bought my first House. I got the Obama tax credit. I did an FHA loan, which is the first time homebuyer alone. I put 3% down on that property. It was a condo that kind of got me started on the path of real estate and homeownership. It was very humble beginnings that there's like a $120,000 condo here in Wilmington North Carolina. I lived there for a little under a year. I decided to buy a dog, so I needed a bigger house and yard and they didn't allow dobermans in that condo. So I tried to sell that condo and come to find out that I was upside down. You know, 2008 was not kind to the real estate market. I only had very little equity in it, so I put very little down payment. So I was forced to rent it, and that's kind of where I had that aha moment. I posted a not on Craigslist and I mean an hour later it was pretty much rented. I had a hundred people responding to the ad. Just threw it up there $500 was the rent over my mortgage, so I think my mortgage is 600 and I put it up at 1100. And it rented very quickly. And at that point, I was doing marketing. I was doing web design and SEO. And I was killing myself for $500 a month, you know, with a client. And here I am passively making $500 a month off this condo rental for doing nothing except signing at least with this tenant. So from that point on, I started getting into real estate wholesaling. I knew that I couldn't continue to put 20% down on every property, which is kind of the investment requirement for a lot of loans. So I started doing what's called real estate wholesaling. I would find properties that were undervalued. I would put them under contract, and then I would find like a flipper or a landlord that wanted that property, and I would essentially assign the contract to them. And I would make 5 to $8000 per deal doing that way. And that's really how I got started. I essentially took that cash, combined that with my side hustle what I was doing with marketing. And now I also have that rental income from that first condo. I would put that together and got my second unit from that point. It just kind of turned into a snowball. You know I was continuing to reinvest all that compounding, rental income. And when I got about 5 or 6 units, I learned about cash out refinances. So I was able to start pulling equity out of those properties in order to continue buying more. I had a revelation at around 7 or 8 condos. That's when I realized that condos just weren't scalable. There's a ton of issues with homeowner association fees and condo association fees and assessments that these apartment complexes were charging, the monthly fees were eating into my cash flow, like crazy. So I knew that I had to go into the single-family realm. So I started doing that around 7 to ten units. And then that's essentially how I grew from there. And we can get into maybe ten to a hundred units in a little bit, but yeah, that was kind of the progression was starter home loans, reinvestment, aggressively. I mean, I was living very lean during that time. Focusing solely on down payments, you know?