BiggerPockets Money Podcast - 481: Building a $1 Million Net Worth in Only 3 Years by Investing in Real Estate

Episode Date: December 15, 2023

Most people know that investing in real estate is one of the best ways to reach financial independence, but very few ever take action. Once today’s guest discovered the potential of real estate, however, it became his obsession. Despite starting out on a low military salary, he built a million-dollar net worth in just THREE YEARS! In this episode, we’re catching up with entrepreneur, investor, and repeat guest Jabbar Adesada. Since we last spoke with Jabbar, he has only doubled down on his real estate dream and journey to financial freedom—dabbling in several different investing strategies and teaming up with a partner to get more deals done. Today, Jabbar owns a slew of short-term rentals and long-term rentals, has completed several BRRRR projects (Buy, Rehab, Rent, Refinance, Repeat), and has more than a dozen construction projects in the works. If you want to reach your FIRE goal as soon as possible, tune in to hear how Jabbar used real estate to expedite his journey. He shares how he was able to save up for a down payment with a low income, get his first home loan with almost no credit history, and rapidly increase his income! In This Episode We Cover Reaching financial independence by investing in real estate How Jabbar built a million-dollar net worth in only THREE years Combining multiple real estate investing strategies within your portfolio How to choose the perfect real estate market to invest in Finding a partner and building out your real estate network And So Much More! Links from the Show BiggerPockets Money Facebook Group Network with Other Investors on The Path to FIRE Through the BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Mindy on BiggerPockets Scott on BiggerPockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Money Moment Grab Your Copy of “First to a Million” by Dan Cheeks 20-Year-Old Minimum Wage Marine with $850k in Real Estate Coast FI in 4 Years: Cutting Expenses, Doubling Your Income, & HUGE Savings Click here to check the full show notes: https://www.biggerpockets.com/blog/money-481   Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Email us: [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

So hello, our dear listeners, and welcome to the Bigger Pockets Money podcast where we're speaking with Jabar Adisada today, who you might remember from episode 257. Hello, hello, hello. My name is Mindy Jensen. And with me, as always, is my real estate investar co-host, Scott Trench. Thanks, Mindy. It's great to be here with my, you know the drill, money sergeant, Mindy Jensen. Oh, I like that was good.

Scott and I are here to make financial independence less scary. less just for somebody else to introduce you to every money story because we truly believe financial freedom is attainable for everyone no matter when or where you're starting. That's right. Whether you want to retire early and travel the world, go on to make big time investments and assets like real estate like Jabar, or start your own business, also like Jabar, will help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams. Today's show features a 22-year-old enlisted Marine Sergeant, who also just so happens to be a real estate entrepreneur with a $1 million net worth.

He also built a business that generates hundreds of thousands of dollars per year since graduating high school with a combination of flipping, short-term rentals and long-term rentals. Yeah, this is the story of what energy, hustle, self-education, discipline, frugality, and the interweaving, the interrelation of real estate investing into your personal life can achieve for you in just a few short years. I know I had a similar experience to Jabbar in many ways nine, 10 years ago, and I was getting started. And just how that sets, that foundation can set you up to absolutely see your business and personal wealth explode in the out years. And it's a real treat to do this now because we last recorded with Jabar in December 2021 when he had just purchased his first two properties. Actually was Dan Sheeks who recorded with him then. I was very jealous. But he had purchased his first two properties by the age of 20, about $850,000 in real estate and laid a really strong foundation of frugality and income from those properties. And you're in for a treat today as we learned about how that set him up to absolutely explode heading into 2022 and 2023 from a business and personal wealth

perspective. Scott, I think what I'm hearing you say is everybody should be just like Jabar. Let's be like Jabbar. Let's be like Jabbar. Let's not waste another second. Let's bring in Jabbar. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going and more importantly where your tax refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning, together. in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code Pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place.

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I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Leen or Stronger for Fitness, the anxious generation for parenting perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being. What makes Audible so powerful is its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across

business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP money. Jabar Adasada is a 22-year-old U.S. Marine and real estate investor. We last spoke with him on the Bigger Pockets Money podcast in December of 2021. At the time, Jabbar was new-ish to real estate and had the stated goal of becoming a millionaire

by the time he turned 30. Today, we're bringing Jabbar back on the show to update us on his journey and how he was able to, spoiler alert, beat his millionaire goal by nine years. Jabar, welcome back to the Bigger Pockets Money podcast. I'm so excited to talk to you today. Oh, that was an amazing introduction.

Thank you so much for having me. That's your life. That's not an amazing introduction. That's just like, hey, here's Jibar. But you said it's so cool. You said maybe sound cooler. I thank you so much. Well, was that even not true?

No, I mean, it's true. It's just, it just sounds awesome when you say it. So, Jabbar, before we jump into this, I wanted to recap a little chat we were having before we started recording. And I said, oh, so you're a millionaire now. And your response? What was your response? Finally. Finally.

And how old are you, Jibar? I'm 22. 22. So finally. I thought it was hilarious and it was laughing like crazy. But also I want to point out that you're 22. Don't compare the beginning or middle of your journey to the middle or end of somebody else's journey. Because there's different circumstances surrounding all of this.

And I'm a couple of years older than you, Jabar. I've been investing since longer than you were born. And that doesn't make me a better. person, but it does make me a really bad person for you to compare your story to because I had a head start that you didn't. I was investing in the 90s. You weren't around in the 90s, right? No, I couldn't really like 45 secretly. So I just wanted to point out that yes, you're finally a millionaire and there's this idea around the Phi community that, you know, oh, I've discovered fire. Now I want to be a millionaire as fast as I possibly can.

And that's a great goal, but, you know, it's not going to happen overnight. So, Jabbar, how did it happen overnight for you? No, I think that really for me on my goal and my journey to financial independence, one of the things that I was intentional about at the beginning was investing and then being extremely aggressive on my defense, which is like my saving. So I started off first focusing on like setting up my financial foundation. which was, you know, increasing, like, how can I maximize my saving rate? How can I make sure that I am saving X amount of dollars every month?

And then I'm just investing every single last penny in excess of what I need. And then I started to focus on investing, but because I didn't have a lot of money, being a Marine, just not making a lot. Like, I was netting from my job between $1,500 to like now $2,300 a month from the Marine Corps. It's like take home pay. So because I wasn't making a lot of money when I was looking at different real estate investing strategies, I was a lot more focused on cash flow. So even though I was investing in assets that were increasing my net worth over time, I was increasing my income as well because now I have a bunch of cash flow from like the short term rental properties that I had.

And so it was a combination of just starting off of the defense, which was the saving, getting into like the offense, which was the increase of my income, and then that also doubling as my investment side of the road of just being able to increase my overall net worth. And so, like, I'm excited that I'm deep into that. Jabbar, we last chat with you and I'm very jealous. I did not get to chat with you. It was actually one of our other co-host, Stan Sheeks, author of First to a Million, who got to interview you back in December 2021. And at that time, you had purchased your first rental property house hack that you were crushing it with a rent by the room strategy and you had just purchased your second property which is a smoky mountain vacation rental for

$630,000 or $650,000 with a partner. $600,000. Yeah. Would you mind just giving us a quick recap of the journey getting to that point? And then I'd love to hear and pick up the conversation from there. How did that vacation rental go? And what have you been up to since? Yeah, absolutely.

So at the very beginning, I had that amazing house act that started off as just like my kind of industry of rejection because it was really difficult to be able to get that loan to be able to purchase that property so young. I bought that property when I was 19 making very little money. But I had a lot. I had I think around like $25,000 or $30,000 saved up. I just had gotten my six months of credit history. Like I had six months. So very slim credit history. And there's just a bunch of roadblocks with me approaching different lenders to finally getting that one.

So with that one, I eventually was able to buy that property. That property ended up being something that basically like matched my military income. So all of a sudden I was making like my military salary and then cash flow from that, which was like, which I think that year, my net cash flow year over year for for from 2021 on that property was like 1,500. it ended up being a little bit high as I expected, $1,500 a month. And so at the time in the military, I was making around, I believe, $16, $1,700 a month by the end of the year. And so I was basically seeing, like, wow, like, I just literally gave myself almost 100% increase of my income by purchasing this property. So by seeing like that being successful, I was able to partner with somebody on my next property, which basically was I didn't put up. any of the money, but I put up all of the work, the knowledge of finding the deal and putting the

deal together and managing everything. And that property actually propelled me into not only getting more cash flow and additional net worth increase from that property, but it also gave me the credibility to start working with other investors to continue partnering. So I did that for a little while. I think I got up to, I have five partners now on, I think, five additional, five additional of those, like, you put up all the money. I put into work and then we split profits 50-50 because I found the deal, managing the deal for lifetime, and then you guaranteed the debt, and then you also put in the money to investing in the project. And so, like, just kind of like to wrap up today, like before two years ago, I was at two units. Now I have 25 units that I own.

five of them are with partners, the other additional 20 of those, are just like solo me. And then I have also like a bunch of properties. We have 12 or 13 construction properties. So like flips, like things like hotels when I'm buying the property and immediately putting it on the market. So like I kind of ventured off into like several different different strategies

of real estate investing in the business to do what I was talking about with the offense. which I think has made like the most meaningful impact and increase to my journey to becoming a millionaire rapidly, was just overall being more focused on increasing my income because you can only save so much. But when you're able to turn the offense or the income ladder or meter up, you have like an exponential amount of room to grow there. Well, let's dive into, you know, we're in December, you know, late, late 2021. and you just bought your next vacation rental. At that point in time, you're earning $18,000 a year in your military, a military salary as an enlisted man. Did you even have BAH or BAS allowances at the time? No. No. Okay. Those are basic allowance for housing and basic allowance for sustenance.

Basically, they're after tax benefits that many military folks get. You weren't even eligible for those at the time. I think at that point, so you're really making essentially minimum wage and you have these two properties here. What was the next step on your journey and how did you get there following the last conversation we had? Yeah. So the next step on my journey was, so I kind of went into a space between December of 2021 and then I didn't purchase my next few properties until June of 2022 actually, because I was having a really hard time finding deals. Like that was something that just got really difficult for me. And your first property was in Savannah, Georgia, and your next property was in the Smoky Mountains as a rental, right?

So where were you looking for those deals leading up to that June 2020? Oh, God, it was terrible. I was looking all over the country. I was looking in, I remember I was looking in the Smoky Mountains. That was difficult. I was looking in the Blue Ridge, Georgia Mountains. I was looking in the Crystal Beach, Crystal Beach. I was looking at the Gulf Coast.

I was looking at the Florida Panhandle. until finally I realized I just need to pick a place and focus on it. And so because I knew I was eligible to do another house act in Savannah, I decided that I was going to just focus in like the general Savannah area, like Beaufort Savannah, like that type of deal. So like within an hour of Savannah. And so my next property actually ended up being a subject to property, which I had a Marine who was getting out of the Marine Corps because,

he just had some difficulties with maintaining standards. And he was in a pretty distressed situation where he was going to be going back home to Texas and he was losing his income. And he also had a baby on the way. So his property, he had bought it. And he didn't really have much equity. So they didn't really make a lot of sense for him to sell at the time. So I convinced him to let me do what's called subject to or take the home over subject two, meaning like the mortgage stayed in his name and then the T, the title of the property was transferred to my name. So now I control the property. And then I make the mortgage payments on the property. And what I essentially did there was I negotiated zero money down with a 10 year balloon. So in 10 years, I'm going to be paying him 10. I think it's $80,000 either via sale cash out refinance or he just has a no on the property, a secondary no on the property. A secondary no on the property for $80,000. And then that allowed me to buy a, basically hold an asset at a 2.5% interest rate at the

time where interest rates were starting to go up significantly. Now, this property, this property was a military property. I assume that the buyer, the seller, when they originally bought it, used a VA, zero percent down loan on the property. And VA loans, to my understanding, are assumable. So why did you choose to do the subject to and not move into the property and assume the mortgage into your name? What was the thought process there? No, this is, I hope people don't think this is where Jafar is greedy because I knew that I could use my DA loan on an additional property.

So it allowed me to kind of use, instead of using my DA loan and locking it in for that year on one property, I could get this property subject to. and then I can do zero down on another VA loan house hack, and then I'll just have like a two for one. And I ended up buying those properties within 30 days of each other, which is even more awesome. What was that second property, the one that you used your VA loan for? So that second property was what was a triplex in Savannah, Georgia. It's my most valuable possession. And so a lot of people don't know this, but in Savannah, the short-term rental regulations are like extremely strict, or maybe a lot of people do know this. But when you live in the property, the rules are

very, very, like, laxed and easy. So what I basically did was I used my VA loan on a triplex that had an additional storage space to turn into a quadplex. And so I basically bought the property, zero money down. I used the hellock from my first property to fund the renovation of the fourth unit and then I turned the three units and furnish them and they turned them into cash flowing Airbnb's. And that significantly increased my net worth because the valuation of that property is probably, I haven't gotten an appraise. This is just based off with the cops. It's between 1.1 and 1.2 million and I bought that property for 695,000. Wow. And you were able to qualify for that on an enlisted marine income because of the income you were generating from your first

house hack, which was rental income on your tax return, the Airbnb portion of the income that you were generating. And then because of the history, you're able to use the anticipated, perhaps long-term rental income from the additional units to help you qualify to purchase a $600,000, $700,000 piece of real estate with a zero percent down loan as a marine. That's the power of house hacking getting started. If you bought a house first, you would have been totally ineligible for the next 20 years to get it to qualify for, or 10 years to qualify for another property. Is that, am I getting that getting close? Yeah, I'm pretty much. So the income from the Airbnb that duplex I took over subject to, that just helped with just more additional savings.

The income also from the property that I have left was just also counted as savings and it canceled out the debt that I had from the first property. And then what really helped was the long-term projected rents of the other three units was high enough that 75% of that was what allowed me to qualify for that loan. And I got that loan at like 5% of 5% interest rate. So really good now, yeah? Yeah, yeah. So what I'm hearing is just the continuing tale of clever, think outside the box,

creative ways to buy real estate, creative ways to, add value to these properties, you're not buying, I'm assuming you're not buying beautiful, perfect properties that have in no way, any way to increase the value. It's from 600,000 to 1.2 million. That just didn't, you didn't get four, $500,000 in equity because you added one unit. You did a lot of things to this unit, right? Yeah, I mean, the property is beautiful. It was my first venture into renovating a property and that thing, let me tell you, drained my bank account at the time. Yeah, I spent a lot of money on every single unit, not just like making that 14. Even though that was the biggest difference was getting those two bedrooms in there,

but really like renovating the entire property, the property being a little bit on the more dated side, that all that stuff contributed to the increase in valuation. Because now it's a beautiful, leave all new renovated 20. 22 property. So we talked about a little bit about the valuation increase of this property. Can you give us the numbers around monthly income from a short-term rental basis? And what would the, what would the cash flow be if you converted them all to long term after moving out of this property? Because the short-term rentals only work because you're living in it right now. Yeah. So pretty much the way basically each unit, each two, each unit is a two-bed

one bath and then I live in the one bedroom one bath. So if I basically got, oh man, pen and paper, because I haven't done this in a while for the long term rental math, but for the short term rental math, each unit rents out between $4,000 and $6,000 a month between Airbnb and VRBO. And so my total expenses for the property are usually between $6,000 and $7,000 a month. So on the low end, if I'm doing $12,000 a month in gross rents, like after everything is said and done, I'm usually out of cash flow of around $5,000, is it, was it, $4,000 or $5,000 a month? $4,000 or $5,000 a month. They, after, like, putting away for, like, capex and maintenance stings and things like that. And if I converted them all to long-term rentals after me living out the property, I'd probably get $1,500 for my,

and then 1,800 for the two bedrooms. So what is that? It's about $6,900. Thank you for your help. So it would be roughly like about 1,000, almost 1,000. Which your principal interest taxes and insurance on the VA loan? It's $4,500. Fantastic. Thank you. Thank you for sharing all that. So that's awesome. So you're crushing it right now on this. It's way more profitable to live there than to move out, it seems like. So I'll be interested to see what happens next there. But fantastic. And can you give us the numbers on the other property, the one you bought subject to? So that one is a really, really great deal.

So I took over that mortgage. And since there's a 2.25% interest rate, the mortgage, the total mortgage payment is 1,250. It's 1,250. And then the total rents on that property are between $5,000 and $6,000 a month. So my total expenses are roughly around $2,000 before CAPEX maintenance and vacancy. and then $5,000 a month, I'd roughly give it about $25,000, $3,000 a month and like pure cash flow after everything. Okay. Tax season is one of the only times all year when most people actually look at their full financial picture,

including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going and more importantly, where your taxed refund can make the biggest impact. Because the goal isn't just to look backward. It's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier.

It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all-in-one tool.

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What happens next? What happens between then and now? So this is where I believe like real estate investing, you get to a, I realized a strength that I had. My strength is I'm a really good operator. I'm able to find good deals, but I'm better at managing them, figuring out how to fund them,

and basically the whole managerial aspect of it. So I had a friend, my best friend Marcel, who was in Myrtle Beach, about three and a half hours away. And so he was doing wholesaling, and he was also becoming a real estate agent there. And so what I decided to do was like, my friend is doing like this deal finding thing over there and you know people are paying him assignment fees what if i could do the same what if he could just do the same thing here and then we

could just do business together as friends and i can even expedite his journey here because i have a lot of connections i understand the market i can teach him i can help him so basically what i did was i moved him from where he was living in my very first property that i was i moved him from where he was living in my very first property that read by the bedroom property. And then he became not only like a wholesaler, but then a real estate agent. So then what he started doing was he's helped me buy three additional properties. Was it three or four? That year, by the end of the year, time is, time sometimes gets walking. I believe it was three properties he helped me find as a real estate agent. And so I basically did the whole scenario again where I had.

someone put up all the money, guarantee the debt for the property. And then he found the deal, but, you know, because he's my resource, I was going bringing that to table to my partners, investors. And then we basically split the profit and cash flow and equity in that property 50-60. So that was another way where I was basically able to own more real estate without using my own capital, but by using my brain. And so that contributed to not only more net worth increase, but more cash flow. And they're all in Savannah, Georgia. Okay. So can you give us a breakdown on on these deals? What, what are the deals that you found? And how did you, like, who was your partner on them? How did you qualify for them? How did you finance them? Yeah. So pretty much what I did was I had,

so for the first one, it was a $200,000 property. And so the, basically the beautiful thing about being in a really strict area. And one of the reasons I decided about Savannah is because in the areas where everyone can do short-term rentals, guess what? You're competing against the top short-term rental investors in the country, people with more money than you, people are more creative than you, people with more time than you a lot of the times. Whereas it's Savannah, because it's universally known as one of those cities that are really strict, not a lot of people know, like, and take the time to study the market to find where in Savannah, you can legally and easily do short-term rentals. So in Savannah, I can say this on a podcast because I'm just not afraid of giving value.

And because most people won't take action on it anyways just statistically. It's just like in the county of Savannah, the regulations change drastically. All you need is to be outside the city limits and you need to apply for short-term rental license. and I've never had one that was denied. Like, I think they just couldn't have been like a crime house or have any history of, you know, crime, I believe. That's like the biggest, like, this is the rule that if you, if that property has been involved, it can't qualify for a permit. So what I would do, basically by basically being able to explain this to investors, I found people actually on Instagram who reached out to me to partner because I did a lot of different podcasts and a lot of people knew me doing. this with the cabin and would reach out to me and say, hey, I want to basically do that same

exact thing with you. And so what I basically did was when I found a property and the opportunity, I basically go back and reach out to them. And Marcel would just find these deals on the MLS. We just keep on putting offers in until one stuck. And then Marcel would sell me the property. The investor would be the one qualifying for the loan, whether it was a second home loan or a DSCR loan and they would be the ones who were putting up all the money for like buying the property and then also furnishing the property. And then another thing we did was because I did have my cabin and I had the experience of being in an area that was highly competitive is I know how to be more competitive in a market where there's a lot as much professional competition.

So I did things like add hot tubs to properties. I did things like hire professional designer. I did things like make sure that, I mean, now it's a little bit even more advanced with like my team. But I just did things that were more that people in Savannah didn't think were necessary. And because of that, I had an unfair advantage with being like my properties performed very, very great. Okay. You said that your strength was running properties. Your strength is your creativity. Your strength is seeing a property and not taking it at face value.

It's, oh, what can I do with this? How can I make this into what I want it to be? And how can I finance this when my income on paper says, I can't qualify? I'm going to partner with somebody who's going to take on the debt for me. I'm going to add a second room or add a second unit. I'm going to live in the small unit. I'm going to do like, that's what makes you so amazing, Zabar. How are you only 22?

It's just literally all the learning and education I got was literally just, listening and reading books by Bigger Pockets is like the perfect part is that like I learned how to think like this by the ideas from other investors who have been on podcast. And it's not only Bitter Pockets. It's all the other ones as well. But it was just like all that massive amount of just consumption and consumption kind of like these things just didn't, I didn't just think of these things. I just copied them from what other people were doing elsewhere.

Jabbar, we have these three deals. This is wonderful. This is an awesome story. I hear you're buying them outside of the city, but inside of the county of Savannah. Yeah. Yes. And now I'm excited to talk about what I'm doing now and what's completely differently. Okay.

But is there anything else between end of 2022 and these three or four properties and now that we should cover before we get to now? I can talk about lessons. I can talk about just pretty much. I learned basically just with any investment. things are not always going to be immediately like your perform estates it's going to be like for one of the properties we immediately had to do a capital call which i'm also responsible for 50% of the risk so if the property let's say loses money or there's a huge expense that that is not going to be covered by the money in our bank account i have to come up with 50% of that as well so we have like an

$8,000 plumbing issue at one property we have a $6,000 um HVAC unit at another property. And then at another property, like just the increase in budget was so much over what we initially expected that I had to actually come out of pocket, even though it was supposed to be a zero down deal, just because, you know, it was off. I had to actually come out of pocket for the addition and construction cost for that final one in 2022. So it just, it taught me like why like you want to have money.

when you're investing in real estate. Real estate's not a game where you can use everyone's cash flow, cash flow until you have several HVACs go out. And so that really changed my mind and trig into 2023, realizing that I need to get actual cash flow from business. If I'm not going to get it from my job, I need to get it from business. Otherwise, I'm going to have all these properties and nothing to show for. Or I could potentially go out of bankrupt if so many different unexpected

costs cheap coming out. Because you get to $10,000 a month in cash flow, but if you have a month of $50,000 in expenses and you only have $10,000 a month coming in, well, what are you going to do? I love that you're bringing this up. I wanted to ask about reserves. And honestly, I'm glad that you're sharing that you had some issues because there's, you can go on YouTube and find no shortage of videos that talk about how great real estate is. And then they just kind of gloss over the fact that they had a $6,000 HVAC system that they had. had to do an $8,000 plumbing. They just don't tell you about that.

That doesn't mean it didn't happen. They just didn't tell you about it. So I love that you're sharing this with us. Thank you for your honesty. I really appreciate that. It changed my life. Yeah. It'll really like, boy, it's awesome to have a great deal that doesn't have any problems,

but you learn so much more when you run into these problems. Yeah. So actually, so I actually was recently traveling. And I'm glad that you said that because everyone's like wanting things to be sunshine and rainbows. I met this millionaire who lost his million dollar net worth, not once, not twice, but he lost his million dollar net worth five times, five times. Imagine you went from being a millionaire to not being a millionaire to being a million. And it was all for different things and different lessons. But he did this example that was really cool. So imagine you have like a piece

of paper, yeah. And with that piece of paper, it's nice and smooth. This piece of paper represents your journey to, let's say, becoming a millionaire, becoming financially free. Because that's what we do. It's not for the titles, but it's really for the time freedom, yeah. So when you have a smooth piece of paper and the road to your journey is smooth and you hit a roadblock at the top of that piece of paper, guess what happens? You go all the way back down to the bottom. You don't go back to 700,000, 500,000. You go back to zero because you didn't have. have any of those lessons. So when you have a journey and you crumple that piece of paper, right? There's all these divots. There's all these divots in that piece of paper that literally

stop you from hitting rock bottom. And those divvets and crunches of the piece of paper represent all the journeys, all the trials and tribulations, those $10,000 cap-ex issues that you go through when you're investing. So you want to have a crumpled piece of paper. You want to have a lot of these different adversities on your investing journey because those make you smart. That makes you a smarter investor. And so when you have an issue, you don't go back to rock bottom or back to square one.

You're just going back to a few paces. And you know exactly how to climb out of there and get back to where you were and even go further because of all those mistakes and errors that you made. So you should be grateful for them. Yes, yes, yes. I could not agree more. I love it. Okay, you just mentioned a word that I want you to define for us.

You said CAPEX and you've said this a couple of times. Can you share what that means for our listeners? And while we're at it, you said vacancy when you were throwing in CAPX a while ago. So explain what those are and why you want to take into account those. So CAP-X is going to be all, it stands for capital expenditures. So that's all of your cost in the property because that are going to affect it over time, like the roof, the HVAC, the electrical, the plumbing, the foundation. These are things that maybe not, might not be an issue today.

But over time, these things tend to deteriorate and become issues that you have to come out of, you know, initiate cash outflows for. in the future. So that's, that defines capx. It's not like your immediate maintenance problem, like someone broke your, I don't know, like your faucet. That is, that's maintenance. Capix is going to be those things in the property that you need to have in the property that just over time deteriorate. And so then when you talk about vacancy, vacancy, everyone knows this, is your property is not going to be 100% rented all the time. If you see a pro forma and it suggests a pro forma meaning like an analysis of the property that's going to be rented 100% of the time, you should be very, very skeptical and concerned because there's going to be times where you have to stop maybe renting the property

because of cap bets. You might have to stop renting the property because you have a tenant turnover meaning a tenant's moving out of the property. There's different reasons why you wouldn't be receiving rents because of different things happen with the property. So those expenses are things that you want to account for when you're analyzing the property because you don't want to, you want to be very realistic with your expectations for how the property will perform. And these things are just things that will help you have a more accurate assumption of how good of a deal you're actually buying when you purchase a property or an asset in general. Awesome. Thank you. So I have a couple of questions for you. Are you still in the military? Yeah, I'm still in.

How do you have time to work? Well, because of just additional ventures, I do have a team now. Before it was all me, and it was like a lot. I never went out, like literally. And the only time I would go out was to meet other real estate investors. And I would, I would miss a lot of sleep, honestly. And it was just me just running myself, like just trying to take care of as much as possible and I was doing it. But then things just started getting out of reach for me. So then that's when I started hiring people and taking a step back from having cash flow to invest in different things to help me manage everything. I would love to hear about the process from getting these three properties to the current state that you're in right now, which you're currently not. Perfect. So

like I talked about before, I had that realization that KAPX is real. And I don't want to say cash flow is a myth, but cash flow, I believe now, is truly meant to be a defensive mechanism to help you maintain and keep that property. I no longer believe that it's something that I personally, for my invest long-term investing strategy, am comfortable with just solely relying on for, like, different things like living. And if so, it should be a very small percentage. So what I decided to start doing starting 2023 was I realized I was like, okay, we are not, we're not in the problem, but eventually just seeing the rate that we want to keep purchasing,

we need to have some way to have larger cash injections into just my business just to protect myself against all these unexpected expenses because it just seemed like I would have more and more, even on the properties that I had bought in in 2021, I was having CAPEX challenges. So that's when I started to this. I decided to start flipping properties as a way to create more cash outflow. And then that also taught me about how I could renovate properties and managing contractors and things love that nature. So the first month of 20, of 20, 23, I actually bought four properties in one month.

I bought three flips, a condo in two single family homes, and then I bought another one of those partnership properties. And so that really won, the three flips ended up being profits of 54,000, 89,000, and 35,000. And those were all, those are just all me. And so instead of me getting money, partnered with investors and giving them equity, I would go to the same investors or similar investors, and I'd have them purchase the property and cash or loan me money to purchase the property and cash using debt. So I'd guarantee them an interest rate of between 10 and 12 percent.

And sometimes I'd even offer points to make it more enticing to them because I was now more so focused on that cash outlay, like that cash outflow, like the coming back into the business. And so with that, I just started flipping. properties and I went and I started buying like a flip at the beginning of 20, 23, every month, one or two a month. Okay. So now, what, what, what, so walk us through.

How long does a flip take for you? How many of you completed so far and how many are in process today? So the average flip, it depends on the type of deal we're doing because we've had some. And when I say we is in June, I decide to partner with my best friend that I moved down here. But we base a flip, if we're renovating it, it takes between three and five months from purchase, depending, and it depends on a mirror out of things. From purchase to sale, three to five months is our average timeline for from purchase, construction, and sale. And then if it's a property that we're just buying and immediately selling, like we will close on the property. We're not wholesaling it.

We're buying it and we're immediately selling it to another investor or we're buying it and immediately selling it to like or putting it on the open market to be sold as is. We're not touching that property at all. Those take about one to two months from purchase to sale typically. So we've done about eight of those purchase and sales, eight of those purchase and sales. And we've also done about nine flips from purchase. sale and purchase sale in rehab. Purchase rehab and sale, sorry.

You've mentioned your best friend is a real estate agent. Who else is on your team that's allowing you to flip so quickly? Because three months is amazing start to finish. And five months is, I mean, that's still a really good flip. But that's not, that wasn't your first flip. My first flip took five months. Okay. But my second flip took three months total.

And who's, so who's on your team that, you're able to flip so quickly because it's hard to find contractors. I don't know if you know this. You can't find them. Yeah. We're having contractor issues actually right now. So pretty much the biggest, I would say the biggest, the biggest thing with what we've had was we had already identified where I had at the beginning was just me.

I had already identified a contractor. And that was the contractor I was using to help me renovate some of these properties that we're keeping. So that actually gave me the idea and then the competence to start flipping because I already had a relationship with this person. I had an idea of what their cost were. And I started with that contractor. And then that contractor had several crews to where he was able to work on several different properties at once for us. And so with that, I'm sorry.

So with that, we've had two, we've read through two different construction companies. but with them they have usually a project manager and then a general contractor attached and then they manage all the subs that are working on their properties. And then for the like now, I also have a quality control manager that is on my payroll that is managing the project manager and then who manages the general contractor just to make sure that everything's on the same page. And then my best friend is responsible for going to the projects and actually making sure that things are happening. If an update's sent from them or sent from my quality control person, he's actually verifying with his eyes that these things are going on.

Do you have any issue mixing friends and business? Yes, from me and my best friend's perspective, it's like we have, we are, our business is split 50-50 and that wasn't a business decision. That was very much a friend decision. But from a perspective of like, holding accountable. Like when someone makes a mistake, we don't beat around the bush. It's like, hey, this is what happened. You can't do this again. But it's immediately solution oriented.

Everything just has to be solved. We don't really have time for emotions. And sometimes that plays to our detriment because we work with other people who want to hear, like, kind of express those things. But for us, like me being a Marine and then my best friend being very understanding, like the level of risk that we're taking. Um, we just, we don't have time to, for anything that's not a solution. So it's very much. So if you make a mistake, we address it and then we immediately kind of just go after what can be done to address this mistake. Well, last question before we wrap up here is what's next for you? Where, where's all this lead for Jabbar? Sorry, for me now, it's getting away from being like side hustling to more so like

actual business and like learning how, you know, hiring people and cabbara. And having, you know, building out my team and building out like SOPs and different things to like manage the business and keep track of things because it's gone so much to where like sometimes like it's easy sometimes there's properties that I don't even I don't even know the right address for sometimes the address discrepancies so it's just overall organizing the business and then also like I would like to get into doing things like online, not guruish, but online education, like helping other people who are young, kind of achieve and go along the same side of success. I haven't had time to even think about that yet. But, I mean, those are just future plans and just having fun. I get out

the military next year. It's super exciting. I'm finally going to be free to like do what I love doing. And yeah, going, I was talking to Mindy before this. I travel to Columbia. I'm a frequent Columbia, South America visitor. So I'm excited to do a lot more traveling when I get out the military. Because the military doesn't offer you enough options to travel. Yeah, it's great. And I travel a lot too with them. Not so much lately because I'm getting out, but I've been to a few countries with them. If somebody is listening who is 18, what is one piece of advice you would want them to walk away with? I would say that you have, have just from what I've realized just growing as like a as an investor and just going on my

journey is you just have to obsess over the education side of things first and then the rest will take care of itself. I notice with a lot of young people because I've helped quite a few young people in the military and just not like just as friends invest in their first property. they want to escape the grind of just learning and just be, you know, understanding what is CAPEX? What is a cap rate? What is cash on cash? What are the different principles and different types of ways that you can invest? Like all these understanding like the operations behind different sort of strategies in real estate, I noticed that people want to escape that. And I think like that is where opportunity lies is understanding those things very intimate.

And then when you're taking action, you can confidently do so knowing that you've done like all of the background education that's needed instead of trying to to wing it or skip that. And then you're not going to feel confident to move forward because you haven't prepared. So I guess it's just a preparation for me. It's something I look back to of being extremely grateful for because I didn't have to do 100 hours of education. to become a house flipper, I had already done it. I had already done the research before, and I just had to brush up and then start doing it. How much work have you done on the properties in your portfolio in this form of actually fixing things up, swinging a hammer and doing work on the property over the last couple years? I painted once. My very first property, I painted a fireplace.

So that's it. Yes, that's all my experience. I painted a fireplace one time. I didn't even paint it myself. I took some Marines one weekend and we went to go paint and they did probably like 75% of it. So I assisted with painting a fireplace. Well, Jabbar, where can people find out more about you if they want to follow your remarkable journey? Yeah. On Instagram, Jabar underscore Investor. On TikTok, Jabar underscore Embass star. That's J-A-B-B-B-A-R-N-V-E-E-S-T-A-R. Investor. and setup a investor. This has been absolutely fantastic. What a wild ride you've been on the last couple years.

I look forward to seeing what you do when you're released from your full-time job as a Marine right now and seeing where this adventure leads because I love the way you're going about it. I think you're thinking about all the right things. And you obviously taking on a lot of risk, but you know you're taking on a lot of risk and are trying to play the right amount of defense. And I just really admire what you've been up to, Jabar. Thank you so much, guys, for having.

me. It's honestly a pleasure to be back and update everyone. And I'm excited to, I'm excited to be back again with hopefully some more exciting lessons to share. Yeah, I can't wait to see what you can do when you have time to invest. All right, Jabbar, thank you so much for your time today. This is always fun to talk to you. And we will talk to you again soon. See ya. All right, Scott, that was Jabbar Adisana and his kind of amazing, wonderful, fabulous story. And by the way, I want to remind everybody, he's 22. He did all of this stuff by age 22. I cannot wait to see what he has by age 23. What did you think of the show, Scott? Oh, just just a fantastic human being an individual. I mean, look at the energy and excitement he brings to his business. I mean, this guy, you can, you know,

he's somehow getting by with four or five hours asleep, building a million dollar net worth, didn't go to college, enlisted in the military out of high school, made 18 grand a year, didn't even qualify for the actual benefits you get in the military like BAH and BAS that make life a lot easier for the first couple of years. Stowe bought his first couple of properties. Again, this self-imposed discipline. This is not a guy who's going out and spending like a sailor, even though he's in the Marines. I love using that joke. This is a guy who's really frugal, really and directs his energy and the best part of his attention to building a life for himself. And he's going to come out of the military at the same age, most people graduate college, not only with no

student debt or things holding him back, but with a multimillion dollar potentially net worth and a thriving business and a reputation for, you know, discipline, industry, frugality, all of the things that you can want. The future, the world's his oyster in a way that it isn't for a lot of folks. And he did it, you know, the hard way without any advantages backing him up. So just total admiration for Jabbar. Let's be like Jabbar. Let's be like Jabbar. If you did not catch his first episode, please go back and listen to episode 257 of the Bigger Pockets Money podcast where Jabbar tells his beginning story and then go back and listen to this one again so you can catch all of his excitement because he really is so in love with life and so excited at all the opportunities that he has available to him. And, you know, his superpower is his creativity and his.

and his willingness to learn the rules and learn how to work within the rules to creatively, to be able to make the most money he can make by investing in cash flowing assets and doing what other people aren't doing and really just knocking it out of the park. I love Javar. I love his story. And I can't wait to talk to him in a few years and see what he's doing that. And one thing I also call it is, you know, in that enthusiasm and passion, there's also wisdom, right? You know, I'm hearing parts of it and I'm like, oh, boy, how, how leveraged are we here?

What's the relative, you know, risk that we're taking in this business relative to position? But when you think about it, he's not that leveraged. He's bought two house hacks and he's bought one subject to deal. Everything else has been with a partner or inside of this, this large business. He's building up his cash reserves. He's learned lessons that some people don't learn for decades longer. And I'm not going to say that his position isn't without risk. He has serious risk in his portfolio. But he's also got a very reasonable debt to equity position. He likely has most of his portfolio financed with long-term debt outside of the short-term projects that he's working on. And he's respectful of the risks that he's taking here. He can lose, but he's also got such a good

chance to win. And I wouldn't bet against him. I would definitely not bet against him. All right, Scott, should we get out of here? Let's do it. wraps up this fantastic episode of the Bigger Pockets Money podcast. He is Scott Trench, and I am Mindy Jensen saying, Tudaloo, caribou. If you enjoyed today's episode, please give us a five-star review on Spotify or Apple. And if you're looking for even more money content, feel free to visit our YouTube channel at YouTube.com slash Bigger Pockets Money. Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Kaelin Bennett, editing by Exodus Media, copywriting by Nate Weintra.

Lastly, a big thank you to the Bigger Pockets team for making this show possible.