- Quentin D’Souza had a modest salary as a school teacher.
- But it didn’t stop him from being able to build up a real estate portfolio with only $5,000.
- He broke down how he acquired 400 units and achieved financial independence.
Quentin D’Souza wanted three things that being a school teacher wasn’t able to give him: financial freedom, more free time, and more freedom of thought.
So in the late 2000’s, even though he was on the path to becoming an administrator, he decided to get into real estate investing.
But with two kids and a modest salary, he needed a way to get started without a lot of cash.
So he and his wife Laura took out a secure line of credit on the equity they had built up in their own home in the Greater Toronto Area. A secure line of credit is borrowing money against an asset — if the debt isn’t repaid, the lender keeps the given amount of equity in the asset. On the other hand, if the debt is repaid, the lender can keep borrowing from it.
Using this money — they had access to CAD100,000, which currently equates to about $80,000 — D’Souza then bought a property, fixed it up, and resold it for more, taking a profit and repaying his debt. They contributed only CAD5,000 in cash to the property, or around $4,000, he said on a recent episode of the Rental Income Podcast.
Seeing the money they’d made, Laura encouraged him to keep going. So he continued to build his portfolio using what is known today as the BRRRR method: Buy, Rehab, Rent, Refinance, Repeat.
In this strategy, investors buy a property, fix it up, find a renter for it, take out a line of credit on it which is repaid by the renters over time (building back the equity for the homeowner), and then use that cash to purchase another home and repeat the process. In D’Souza’s particular case, he refinanced the properties, used that cash to pay back his secured line of credit, and then drew again on the line of credit to purchase another home.
D’Souza says he used this strategy to buy his first six properties. He then partnered with friends and family, who would put their money into deals in exchange for a piece of equity in the property, or simply in exchange for interest on their capital.
Once he reached a portfolio of 30 units, he said had achieved a cash flow of $5,000 a month, enough to live off of and quit his job. But he kept working for about another year as a precaution because he had young children. He then left his job in 2014 when he was 40-years-old.
Now D’Souza has a portfolio of 371 units across 41 buildings in the US and Canada, according to property records viewed by Insider, and runs a real-estate business buying apartment complexes. His business works only with accredited investors.
D’Souza’s advice for first-time investors in today’s market
Prices for homes are significantly higher today than they were when D’Souza started, making it tougher to break into real estate investing, he said.
But he gave two tips to those looking to buy their first rental property.
First, find a good network of investors, he said. This will allow you to find out which properties are working with the BRRRR strategy in a given area. He said in the Toronto area today, for example, people using the BRRRR strategy are buying single-family homes in rough shape and adding more units to them, which wasn’t necessarily the case when he started.
He said to find someone in your area who has successfully executed the strategy and try to follow their path.
“”Maybe it’s townhouses, maybe it’s duplex conversions, maybe it’s small apartment buildings,” he told Insider in a phone interview. “Whatever it is, find out from people who are actually successful…and then follow the path that’s already laid out for you instead of trying to make your own. It’s a lot easier to follow somebody else’s path that’s successful than to try to do something totally different.”
Second, he said to get started instead of being paralyzed by fear or apprehension.
“You can only read books and watch videos for so long. You’ve got to get out there and you’ve got to do it,” he said. “If you’re stuck and you want to learn how to do it, find somebody who’s doing it right now and then ask them: How can I work with you?”