Speaking with Caleb Lopez for Episode #54 about how to retire early with real estate investing, I was struck by just how far you can get in this industry on the sheer power of having a good work ethic and good mindset. Over and over, Lopez reiterated that his success was due to his willingness to sacrifice, work hard, and surround himself with people who were driven and had something they could teach him. From buying his first home at 21 to his current semi-retirement portfolio of 20 paid-off properties, Lopez walked me through his journey and gave plenty of tips on how to retire early with real estate investing.

Financing Properties Through Sheer Willpower & Sacrifice

Since Lopez bought his first home at 21, I asked him what advice he had for people looking to get into real estate: how should they go about financing their first purchase? His answer was striking: “People don’t buy a house because they don’t realize they have to. It provides stability.” he then went on to explain how that first purchase is built on sweat and sacrifice: establish good credit with credit cards, buy a vehicle to get to work, and save money any way you can while you save up for that first downpayment. With 3.5% interest rates, anyone can save up enough for a home if they work hard enough.

After that, he said, everything is easy. Putting sweat equity into your first home will let you leverage it into a second, third, fourth, and soon enough you’ll be able to spend your time doing what you like -- but only because you were willing to sacrifice and work hard enough to get yourself there.

Low-Risk Investing By Focusing on a Positive Cashflow

Though Lopez adopts different strategies for every potential deal he considers -- flipping, holding, developing -- he says that the key to low-risk investing is focusing on two things: what the purchase would mean to your livelihood right now and whether its worst-case scenario would still benefit you.

This means examining how any deal will effect your cash-on-hand, potentially closing you out of other, better deals, how it might increase your leverage such that a market crash (like the pandemic) might take you out altogether, or even just what it will mean for your monthly income and for how long -- will you be eating lentils for 5 years because it’s too expensive of a deal for your current worth?

But it also means examining whether or not a property will still be able to generate a cashflow even if its primary strategy fails. If a property is meant to be flipped, can it still make money as a rental? If a property is meant to be a rental, is it in a hot enough market that you could flip it if need be? Finding properties that meet all these criteria keep your exposure low and will lead you to success with much fewer setbacks.

Invest in a Neighborhood, Not Just a Property

One thing that Lopez told me that I thought was absolutely genius was how he invests in “the worst home on a bad block” and does his best to uplift the entire community around him to give his property more value. When he paints his house, he sees if his neighbors want to hire his painter. When he tiles a bathroom, he finds that people ask him if his guy is free to do their home next. This kind of community building, Lopez says, is incredibly rewarding. Not only does he get to make a killer profit, but he gets to better the lives of all those around him.

Look for Opportunities Everyday

Lopez’s final advice to people looking to retire early with real estate investing was to be always looking out for opportunities -- literally every single day. He says that he devotes 15 minutes every day to searching MLS, calling realtors, or even just driving around and looking at homes. That 15 minutes isn’t a lot, but it adds up if you stay dedicated to it day in and day out. With a success story such as Caleb’s, it is clear that this last bit of advice is probably one to take to heart.

 

Lopez says that he is always willing to help people who are really looking to get into real estate -- and willing to have the right mindset of hard work and sacrifice to be successful. If that sounds like you, reach out to him at calcoastconstruction@gmail.com and check out his website at https://www.calcoastconstruction.com.