Learn Real Estate Investing via Real Estate Start School and Retire Early with Real Estate
Today, I’m excited to share with you two great resources from one sharp guy who attained early financial independence via real estate investing.
Chad “Coach” Carson is a family man in his late thirties who has figured out what matters most in his life. It’s not having the most “doors” in his real estate profile or continually trading up to bigger and better properties with an insatiable appetite.
Given his experience and business acumen, I imagine Chad could scale up to owning hundreds of properties if that’s what he wanted. Instead, he’s found a comfortable spot where his properties (currently about 90 “doors” co-owned with a business partner) more than cover his family of four’s relatively modest expenses without taking up much of his time.
He focuses less on growing a large empire and more on what he describes as “doing what matters.” To him, that included recently spending a year and a half living in Cuenca, Ecuador with his family, the longest of several “mini-retirements” that he has taken over the 15 years or so that he’s had in his real estate investing career.
I like to feature Mr. Carson’s work not because he’s a genuinely friendly guy, or because I’m in awe of his athletic prowess, but because he’s such a good teacher. If there’s a real estate concept that I don’t fully understand, he’s probably got a 2,500-word blog post full of tables and diagrams to explain it in simple terms.
Now, in addition to his excellent blog posts, he’s also got a new book out titled Retire Early with Real Estate, and his master course, Real Estate Start School, which opens for enrollment twice a year, in the spring and in the fall.
Unlike some courses which remain available year-round, this one is updated and released just twice per year.
Learn Real Estate Investing via Real Estate Start School and Retire Early with Real Estate
Real Estate Start School
If you’re familiar with The White Coat Investor’s Fire Your Financial Advisor course, this course was created on the same format (Teachable). The first iteration of Real Estate Start School was similar in length to WCI’s course, but the recent update is certainly grander in both scope and size.
For the Spring of 2019, the course has been completely revamped and expanded. While the course is only open for enrollment a couple of times each year, when you enroll, you will have lifetime access to the current course as well as any future additions or improvements.
A “Grad Course” in Recession Proof Real Estate was recently added, and he’s got plans for additional grad courses called Lead Generation Mastery and Creative Financing for Real Estate Investing later this year.
Comprised of eight main modules, 84 videos, and dozens of hours of total presentation video at normal speed (I prefer 1.25x or 1.5x speed) along with numerous action items, thought exercises, and a new workbook, there is a plethora of educational material in Real Estate Start School.
New is a bunch of bonus material, including prior alumni calls, office hours, and a series of five expert interviews with experienced and successful real estate investors. With this addition, you could make this course your full-time job for weeks on end, but you’re welcome to digest the material at your own pace over the course of months or a year.
Coach Carson opens this course to new enrollees twice per year for about 10 days. He leads weekly group sessions with fellow students for 8 weeks. He also does a half-dozen live group coaching calls with his students over a similar timeframe.
There’s a Facebook group open exclusively to current and past students, and he also does monthly Alumni group coaching calls throughout the year. Past calls are archived and available to new enrollees in the course.
You can tell that he really wants people to follow through by not only finishing the course, but also by remaining active in the community he’s building and taking the first steps towards building a real estate portfolio to help achieve their financial and life goals.
Across 8 easy-to-follow modules, you’ll learn how to:
- Develop a customized real estate plan for YOU: Like picking from a menu, this course will help you choose the unique real estate plan that will move you towards your financial goals.
- Pick the right market for investing (local or long distance): You’ll receive detailed instructions and a checklist so that you can make sure you have a profitable investing market, either locally or long distance.
- Run the numbers to know you have a good deal: Real estate investing is a numbers game. So, you’ll learn the most important formulas to confidently evaluate your next property purchase. Plus you’ll receive the same deal analysis spreadsheet Chad uses on his deals.
- Get the money to fund your deals: You’ll learn the best sources of financing, both traditional and non-traditional (like seller financing and private money). And you’ll get ideas to raise money for down payments and other cash needs.
- Build a dream team to help you succeed: The right team will make or break your efforts, so you’ll learn the most important team members, like real estate agents, CPAs, contractors, etc. You’ll also learn how to choose the right ones.
- Find good deals: Nothing else works in real estate investing if you can’t find a good deal. You’ll learn how Chad has consistently bought good deals year-in, year-out for 16+ years.
For an 18-minute preview and overview, full course syllabus, testimonials and more, head on over to Coach Chad Carson’s Course (say that ten times fast!) page to check it all out. You will find his laid-back, genuine approach refreshing.
If you do enroll in the course (and do not take advantage of the 30-day money back guarantee) via a link on this page, this site will be credited and compensated and you will be supporting our charitable mission.
Retire Early with Real Estate
Chad was kind enough to share a copy of his first book with me, and it’s available from Amazon starting at a penny under $10 for the Kindle version and currently under $17 for the paperback. It’s also available from Bigger Pockets at a higher price with some video extras.
Personally, although I have purchased several homes, I haven’t been much of a real estate investor. I’ve been a reluctant landlord in a couple of different situations after moving out, but when I analyze the returns compared to what I put in, those were certainly suboptimal investments. Reading the 300-page book confirmed those suspicions for me.
Do What Matters
This mantra is a consistent theme across his website and throughout the book. He recognizes that what matters to him may be different than what matters to you or me, but it’s important to understand what that is. Retiring early should not puts individuals into a state of perpetual idle leisure, but rather in a better position to spend more time doing things that matter to them.
“Sleep more. Relax in the morning. Sit on a rocking chair.
Learn something new. Be impractical. Explore.
Visit amazing places. Go on adventures. Hike trails. Ride a bike again.
Unplug from the matrix. Do work you love. Buck the system. Say “shove it” to the man.
Raise your own kids. Play silly games. Help with homework. Spoil your grandchildren.
Plant a garden. Grow your own food. Eat healthy. Exercise.
Pursue your passions. Volunteer. Listen to people. Make an impact.
Advance your cause. Create your art. Write your story.
Get OFF the 9-5 treadmill.
STOP selling out!
DO what matters!”
He also acknowledges that, as The White Coat Investor would say, “retirement is squishy,” and it can mean different things to different people. There may still be some work, there will definitely be some income, but once you reach financial independence, you have the ability to choose how you spend your time without the need to focus on making more money.
Real Estate versus Investing in Stocks and Bonds
The author invests in both property and index funds, and he discusses the ways in which one can reach a state of financial independence via one or the other or both.
You’re probably familiar with the 4% rule of thumb which suggests a retiree can withdraw 4% of his or her initial nest egg, increase withdrawals with inflation, and have a very low likelihood of running out of money.
In Retire Early with Real Estate, Coach Carson shows how a successful real estate investor can expect better cash flow and may be able to spend a larger amount in retirement than the investor relying on the 4% rule.
For example, it’s not unusual to see 6% to 8% cash-on-cash returns for a fully paid-off property in the right market. Ten homes purchased for $100,000 each could generate $60,000 to $80,000 per year after all expenses are covered.
The real estate investor also has the advantage of retaining ownership of the asset, whereas the stock and bond investor may have to sell assets in a down market. The owner of mutual funds also may end up with a lot more money than he or she started with if not met with lousy initial returns.
There’s a lot more to this comparison, and that’s why the book is 300 pages long. The real estate path requires more work up front to find the right properties and tenants, and requires more paperwork and ongoing management, although much of this can be outsourced, of course.
Putting Money in its Place
I really like the perspective that Chad takes when discussing the role of money in his life and where he wants it to be in yours.
It’s not front and center.
“So, my goal with the book is to help you put money back in its place. And its place is not at the center of all your decisions. Instead, I would love your values, your friends and family, your personal goals, and your life aspirations to guide all of your decisions.” -Chad Carson
While this may seem counterintuitive for a book discussing investing, analysis of real estate strategies, the careful use of debt as leverage, and how much money you need to retire, it’s a great reminder that money is a tool. Nothing more, nothing less.
Figure out the money piece, and you can spend time on things that matter more than money. I have been known to say that money is everything, but it’s certainly not the only thing. Lose sight of that fact and you may never feel you have Enough.
While the author is admittedly rather frugal, he has the means to spend more, and he recognizes that people will make different choices. He does make it clear that our spending tends to highlight what we value, and that choices to have to be made.
“You can’t have it all right now. You have to choose. If you choose to spend 100% of your income on stuff, you are prioritizing that stuff over everything else. If you choose to save a large portion of that income and invest it, you’re choosing to move towards freedom and
flexibility as quickly as possible. There is no right or wrong, here. There are only choices that either connect with your deeply-held values or they don’t.” -Chad Carson
Real Estate Investing Strategies
Yes, the book does go into detail with a wide variety of actual ways an investor can use real estate to generate the income needed to retire decades earlier than is typical. The author has done nothing but invest in real estate until his more recent entrepreneurial activities that include this book, his website, and his course.
Open the book up and you’ll learn beginning techniques that include the House Hacking Plan, the Live-in-Then-Rent Plan, the Live-In-Flip Plan, and the Buy-Remodel-Refinance-Rent-Repeat (BRRRR) Plan.
Each plan is described in detail and easy-to-follow hypotheticals are outlined with numbers in paragraph, table, and sometimes chart diagrams.
Sprinkled throughout the text are the real-life stories of successful real estate investors who have used any or all of the above plans to reach or approach financial independence, and most of them quite early in life. Altogether, there are 20 of these investor profiles with a number of them coming from names you might recognize in the personal finance blogging community.
Chad doesn’t ignore the downsides of real estate investing. He struggled through the housing crisis ten years ago, and profiled a real estate investor who struggled mightily at the time, going through a divorce and a Chapter 11 bankruptcy in the midst of the Great Recession.
No Book is Perfect
For one thing, he talks about the fact that he wrote most of this book in Ecuador, but I don’t think I saw a single picture from the beautiful country. Fortunately, he’s got a website and a Twitter account where he shares some splendid photography.
A Two-Year Residency?
Forgive the football pun, but the All-American dropped the ball a bit when discussing physicians. He says “Most doctors study for at least 10 years before beginning to receive large incomes. They spend four years at a university, four years in medical school, and two years at a residency.”
This is more of a critique on me, since I’ve had my copy since June, and if I hadn’t procrastinated so long on finishing it, I may have been able to tell him to change that to “three or more years in residency” and maybe mentioned tacking on an optional fellowship, but it’s far too late for the publisher to make that correction in the first edition.
Income Versus Total Return
At one point, a 7% return from real estate investing is compared to a 1.82% dividend from the S&P 500. When looking solely at income and ignoring total return, this makes real estate seem like the much better deal.
What Chad knows but didn’t really hash out in the book is the fact that U.S. stocks have seen capital appreciation at a higher rate than real estate, which, over the long run, rarely does much better than keeping up with inflation.
Massive Tax Drag?
In a section that actually has little or nothing to do with real estate, Chad compares investing in a tax-deferred IRA to investing in a non-qualified, a.k.a. taxable brokerage account.
While I agree that tax-advantaged accounts should be maxed out, the taxable account gets really short-changed here. In his example, a $10,000 a year investment in a tax-deferred retirement account returning a generous 10% per year results in $1,644,940, whereas a taxable account’s returns are subject to a combined state and federal tax rate of 30% and only grows to $944,608, or about 43% less.
That’s a huge difference if true, but to quote the lady in the Geico commercials, “That’s not how this works. That’s not how any of this works!”
Invested in a tax-efficient manner, for example in the S&P 500 fund with the 1.82% dividend, the only portion potentially subject to tax would be that dividend as long as the investor isn’t selling shares.
If the investor has taxable income that pushes him or her out of the lower tax brackets where that dividend would be in the 0% qualified dividend bracket, the dividend could be taxed at a rate of about 15% to 35% depending on state and total income, but more commonly on the lower end of that spectrum.
The tax drag would be about 20 to 25% or 1.82%, or 0.4% per year. Using my compound interest calculator, using monthly investments and compounding (which is more typical of real-life investment behavior), I get $1,975,423 for the tax-deferred account after 30 years, and $1,813,962 for the taxable account, a difference of 8%. But that difference could be zero if the investor has taxable income of a median American household.
The tax-deferred investment did benefit from an initial tax-deferral, but a significant chunk of that benefit will likely be recaptured via income taxes upon withdrawal. The taxable account, conversely, consists of post-tax money, and it’s certainly possible that an early retiree could draw upon that account for decades without incurring any additional taxes.
While no book is perfect, this book serves as an excellent introduction to the myriad ways real estate can be used to help achieve the goal of early financial independence or early retirement.
In addition to the strategies mentioned above, the book also touches on note investing, crowdfunding and other syndicated investments, what to look for in investment properties, and much more.
Furthermore, Chad Carson takes a holistic approach to life and money, making this more than just a real estate textbook, but rather a book with both practical advice and philosophies that should be guiding an investor’s behavior.
I refer to the author by first name throughout most of my review because I consider Chad to be a friend. We’ve been in communication throughout the time in which he’s written this book, and we recently shared some quality craft beers well into the evening around a Minnesota campfire. I may or may not have been tossing pallets on that FIRE to keep the flames going strong and my buddy around a bit longer.
Chad is accomplished but modest, authoritative yet soft-spoken, and I highly recommend Retire Early with Real Estate to anyone considering using real estate investing as a part of their financial independence plan.
For those who are looking for a more thorough personal, interactive, multimedia approach to learning more about real estate investing and financial independence, look into his signature course, Real Estate Start School.
Coach Carson’s 7-Day Free Course
If you’re not ready to commit to purchasing either a course, but would like to get a feel for how online courses work while learning how to get started (or restarted) investing in real estate, here is your opportunity.
It won’t cost you a penny and the course includes a discussion forum in which Chad will answer your real estate questions.
Is Real Estate Investing a part of your approach to achieving financial independence? Do you invest in single family homes, multi-unit properties, REITs, crowdfunded real estate, notes, or use other methods? What percentage of your portfolio is devoted to real estate?