In this edition of Real Estate Makes The Millionaire, Mike Hills joins Nicole Rueth of Fairway Independent Mortgage Company to discuss real estate investment and the ways it has changed his life. Mike Hills, who turned his first investment of $8,000 after graduating college into over $200,000 in profit after 20 years if he sold today. Mike also talks about how he’s using his experience to influence how others see real estate and what it can do for them long-term.
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(by YouTube Transcript)
Thank you for joining me this month I am so excited to have Mike Hills kick off a whole month talking to folks that are building wealth of real estate. The folks that are doing it and primarily doing it for the first time so I’m not talking to a ton of experienced investors except for Mike who is above me on but you’re so real about it. So Mike I wanted to introduce him to you first because he’s the one that changed he was the second man that came into my life and Peter wasn’t the first person that showed me the way that you can use real estate to completely change your retirement your goals your lifestyle right but he didn’t do it for me. Yes he did support us and buying some investments he did it for my kids so I sat down with Mike at a lunch we bought all three kids yep and he talked to them from this outsider’s perspective. They weren’t listening to mom and dad and they were hearing about how real estate can absolutely change their lives and after that our first child bought his first house at age 20 with Mike. Yes. So Mike I want you to share your story because it’s phenomenal how did you get started? So for me when I was growing up I grew up in Northern California and I had two two men in my life, one was my father who was a financial planner and until this day his advice that goes in my head and then my best friend’s dad owned rental properties lived across the street still best buddies with Mark. And the funny thing is I watched his father when we were I was in high school and in my first couple years of college and what his dad was doing was selling off rentals. He had acquired about eight rentals in various states with mortgage a lot about that folder mortgage I just knew that he had done those basically my knowledge and he sold them off and when all was said and done right about my junior year of college he had designed and built his own house in a little town called Auburn which is sort of like Evergreen as to Sacramento. Mountain town. He had sold to rental properties, bought the land and with cash sold a couple other rental properties paid the taxes, designed his house, sold the rest of them, built his house, owned it outright and had about half a million dollars in the bank. Right but he did the rental thing was sort of by accident because he was acquiring them somebody would pass away the inherited house he buy a house living it couldn’t sell it so we turn it into a rental. So I thought to myself like you know if I take this same philosophy and apply some pressure to it and do it differently than everybody else. Most of the people in my life, when I started buying rental in 2001, everybody in my life was like what are you doing? This is insane, nobody does this, you’re way too young. Which was, you know one of those things I was like well you know what, I don’t have anything anyway, so if I lose it all what do I have to risk. That to my life is a big game of Monopoly. What do you own and pays you? Right. Go play a game of Monopoly and think of life the exact same way. This is what I did I graduated DU 2 9 2001 with the gift money from my mom. If I sold today, I walked with a little probably $200,000 in profit now. After 18 years, but there’s only an 8 thousand dollar investment. You know time has a funny thing of working, where it’s really slow when you’re looking forward and it’s really fast looking back. You recovered from two downturns. It’s still worth two hundred thousand lost money days after I bought it right economy recovery 2005 2008 crashes again and the people in my life that was closest to me were like what are you doing, you’re gonna lose everything. You get paid because over time properties appreciate you get paid because you get the positive cash flow from the rental, you get paid because every time you pay that mortgage payment where tenants are buying you a little bit more of the house. three debt reduction in the last two are some tax things with those first three those are the ones you are sleeping it is fantastic and the fact that you started so young I think was the story that clinched it for my kids because here they are 20 years old 21 years old now they have time alright that’s the gift they don’t have to hurry up and pay down the mortgages they don’t have to strategize they just buy it slowly over the next 10 15 years I look I fast forward I was telling Caleb I said if you just buy three four-plexes by the time you’re 55 and you don’t even accelerate the payments you’ll be worth over two and a half million. You know over eighteen thousand dollars a month in rental income and this is easily he could be moving into each one of those as owner occupied because you can’t use out any kids yet yes. Which is how you kind of got started, you’d bought your first four before you got married. First 5 first five before you got married. And here’s the funny funny part about that story. Those first two roommates that moved in with me one of them started buying rental properties today he probably owns 18 -19 doors something like that. The other guy still rents from me! I’m not even kind of kidding one guy property owner, one guy still rents. And the guy that rents drives a $65,000 BMW- he drives a car with way nicer than my car right but that is all he has, and it’s a depreciating asset. I’m gonna have the opinion and by appreciating asset. If you’re not doing this, what are your rules you can do this everybody can do this and it’s a way to make you rich it will work what we like to tell people is you come to us you have one comment in your name do this for long enough and you’ll have to comedy and you know what to comes in your name means you’re worth seven digits which is right. Well thank you for joining us thank you and Rockstar now so we’ll be back next week with another guest. Looking forward to chatting with you. Nicole Rueth, the Rueth Fairway Mortgage.