Chad Carson has worked in real estate since 2003, strategically building up a portfolio of 90 rental properties mostly in and around his hometown in Clemson, South Carolina.
After spending his first year out of college scouting properties for seasoned investors to buy and flip, he started using "house-hacking" and "live-and-flips" to increase savings and maximize earnings, he said on a recent episode of the Mad Fientist podcast.
By 2007, Carson and his business partner owned 50 rental properties. He said he also lived frugally, at times on just $20,000 a year.
"My business partner and I kept our overhead super, super low. You might flip a few houses and make a bunch of money for the first six months of the year. The second six months, you might not make any money or the deal might go bad," Carson said.
"And so I think the progression was, those first three years, we got really good at keeping our expenses low, living cheap," he explained on the podcast. "That way, when we didn't make money, all that cash just went in the bank, and we were able to save that money."
Save for a few setbacks during the financial crisis, Carson and his partner continued growing their portfolio over the past decade. Carson now lives off passive income from the rental properties, affording him the ability to spend this year living in Ecuador with his wife and two young daughters.
At just 37 years old, Carson considers himself financially independent and says it's all thanks to a timeless investing strategy: "Keep it simple."
"I think keep it simple in a couple of different ways, just the personal finance stuff of just increasing your savings rate and keeping your life simple, that's really what it all comes down to. Whether you invest in stocks, index funds, or real estate, there's really no changing the basic formula that you have to save money and you've got to keep your expenses low," Carson said, adding that this strategy is the basis of investing icon Warren Buffett's success. "[T]hat simplicity is really important. But then, also the simplicity of your investments."
Carson explained:
"If you're listening to me talking about my portfolio, I might sound a little ironic, buying 50 properties here and there. But I think part of the lesson we took from that whole experience was that we don't need to be crazy ambitious, and we don't need to be doing a bunch of deals, and owning a bunch of properties to accomplish all of our goals. You can be really, really simple.
"I think in real estate if you chose to go that route, all you have to do is work it backwards from if you need $5,000 a month to pay for your expenses, work it out, how many properties do you need to own free and clear to pay for $5,000?
...
"You just need to keep it simple, get a simple plan, pay off the properties, and then live off the income. It's really as simple as that."
Carson recommends a book called "Building Wealth One House at a Time: Making it Big on Little Deals" for anyone interested in keeping it simple in real estate investing. Check out CoachCarson.com for more of Carson's tips for creating passive income through real estate.
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