Meet The Real Estate Investor who RETIRED at 25 Years Old (Self Made)

To get there, there's only three things you can do: you can spend less, you can earn more, you can maximize your returns. And in that word, like spending less, yeah, is this way more impactful because it allows you to save more, yeah, and it requires you to need less when you retire. Your number you need is even less.

Earning more? Try to pick up a side hustle; there's always a way to earn more in some ways. Yeah, I couldn't get a great motion at work. You could pick something up. If you don’t have to play piano, teach on the side. You know what I mean? Buy a rental property, something. And then maximizing returns becomes more important as you build that slope upwards.

I agree. The exponential growth comes from, you know, each percentage point of return is so important. What's up, you guys? It's Graham here. So I'm here with a good friend of mine, Mike Rosehart, who retired at the age of twenty-five years old by owning nineteen properties that have a combined value of probably just over five million dollars. Now, in the last year, he's cashed out about a million dollars of that in pure profit. He still owns seven properties now, which is an incredible feat for someone who's 25 years old. So I'm gonna let you take over. How did you get started in doing all of this, and how did this come to be?

You know, I didn't come from a very wealthy background. You know, as a kid, we moved around a lot. I grew up in a single-parent family household with, you know, kind of poverty line income, so we really didn't have a lot of money. It was always just surviving paycheck to paycheck. It always felt like, you know, just surviving, always just scraping by. And I didn't like that feeling personally. I wanted to do really well with my life.

So I was thinking, you know, I can climb the corporate ladder, you know, become a CEO, go into business or something that allows me to rise above my current standard of living. I kind of leveraged the fact that growing up poor, I’m accustomed to a lower style of living. So being frugal is super easy for me. It just comes naturally. Growing up really frugally allowed me to, you know, get my first job at 15 and save almost all of that. So saving 90% of that was really huge.

At 17, I went off to university, which is an Ivy League university here in Canada that has a similar program to Harvard in the United States. So I went to a really great school. It was an expensive tuition program. At seventeen, I moved; I never moved back home. I left the city that I grew up in, and at seventeen, my girlfriend, now wife, and I, we just rented a place. She went to college, I went to university, and I studied business for four years. Halfway through that, I bought my first house at 19.

Why did you think real estate at that point? Yeah, it's a good question. You know, I think the big thing for me was that I was investing. I was trading in stocks, and I was doing a little bit of that. When I turned 18, I had some capital from working a good part-time job and whatnot, so I was playing around, not gobbling. I was getting like the market returns. At the end of the day, after a year, I looked at it, and I was like, "A like eight percent return."

What year was this? This must've been 2012. So, I started investing in 2010. I started investing—like I was trading stocks. It's okay, I got. And then in 2011, I got serious about trying to buy a house, and in 2012 actually pulled the trigger and got a bank to back me on a mortgage.

Do you have any income coming in? Like, what did you have? Because you were—yeah, right. So, I had my grocery scholarship income that covered, you know, at least half of my education costs, and then I had good part-time jobs. I had a lot of really good government jobs. I worked at a bank in the summer. I worked really hard to get good jobs, yeah. So a lot of time was spent just building the resume at that point.

Having good jobs and being really frugal allowed me to save enough that we had the 20% down payment we needed, which between Elise and I was about 40,000 for this $200,000 house. It wasn't a great house; it was like a little two-bedroom, you know, cute little house. First of all, being able to save 40 grand between two people at 1500 a month is incredible.

How long did that take you, and what was involved in saving that amount of money? We actually—I used a bit of a cash flow strategy, where I used some of my scholarship money to buy the property in the summer and then got a loan to front some of my tuition. So, as you think, school that worked in, using scholarship again as well to help with that. But yeah, so it's just being frugal, right?

Yeah, we were living in an apartment downtown in London, and I think I found a deal for like 500 bucks for a bachelor. So, swing, that’s 250 each, and it was all-inclusive, so our expenses were very, very low. And yeah, I mean, I picked up every sort of side hustle you could think of. I was tutoring on the side, tutoring math, and doing statistics and business. Nice, thirty bucks an hour, so I would make a little money doing that on the side and things like that that, you know, you just be able to save it up.

My wife worked as an RA (resident advisor), so that helped her get some income too, and we just were able to save up that down payment and made it work. So, what tell us about the first property? What was it like? How much was that? What did you get on rent? What was the plan with that one?

Yeah, so, um, the first property was around 200,000 purchase price. I spent probably fifteen thousand dollars renovating it. My third year of university was when I bought it. So, my third year, I spent a lot of time in the Ivy intensive program we had. We had these 14-hour reports where we were locked in a room for 48 hours to basically solve a business case.

That's awful, okay. It's a very intensive program; it’s meant to train like future leaders of, you know, Canada, right? Yeah, I remember coming off one of those four-hour reports and then spending 15 hours straight renovating, so that a guy can move into the basement—like a tenant move into one of the bedrooms. I just remember being exhausted all of the time.

So, just, you know, you think you can only put in like 60 or 70 hours, but if you really want something and want to be your finding hours, you'll find. Yes, yes, exactly, so I was able to put in, you know, 100-hour weeks through that and still maintain my average and keep my scholarships. So that was sort of just balancing everything—that was really the trick to getting through that.

We created some equity in there in our first house; that was great living for free, helping a lot because we house-hacked. So you were living there than renting out the other bedroom? Yes, so I converted it. I did some bathrooms and bedrooms, put a little basement suite in there. I was able to live for plus 200 a month, so I was making 2,000 a month.

Yeah, we were both living; we had no living costs, so I really don't worry, may we just save it. Yeah, 100% of it. So that really helped us get, you know, over, look like 2012, right? And we're talking May, and then my next property purchase was like January 2015. So there's a three-year gap there where I was finishing school.

Then in 2014, April, I started working full-time and just saving. I got to be heavily when I worked in management consulting, just saving everything I was making, which wasn't, you know, I didn't have a great salary to make, a 50 grand a year out of school, right? But it was enough that, us being so frugal, that goes a long way.

Yeah, especially if you're saving fifty thousand a year. I know people who make four hundred, five hundred thousand dollars a year who would be lucky to save fifteen grand. I want D Cranston to save fifty grand a year and look for free. Essentially, it's amazing. I mean, you could make a million dollars a year, and now you can save fifty grand a year.

Yeah, rents—Saturday, I was having to see. Living expenses are one of your number one expenses. And you know, I was using public transit too. Like, you know, well into 2014 when I have a full-time job, so I was biking to work and then using public transit was another way that I was able to keep transportation costs, you know, near zero.

Yeah, so you're house-hacking, and then when did the second property come up? What did you realize? It was like, I could just replicate this and do it over and over again. So, I guess, you know, I was reading some—I do a bit of journaling and dream boarding, and that was sort of how I could visualize and plan out things.

I'm up here all the time: I'll be embedded between the morning just thinking about what I'm going to be doing next and planning. So I remember at that time looking back in my journal; there was no plan to build a real estate, you know, empire, so to speak, or to reach financial independence and retire early through real estate. It was actually gonna be through, you know, index investing, just hardcore for gala gains.

Yeah, retiring early around 29 was the goal. So, yeah, I remember looking back at the fact that with real estate, you can control the outcome. Yep. When you're vested in a publicly traded company or even a company on the Pink Sheets, it's hard to have that competitive advantage. And so, whatever you do, I think, whether you're in your business or whatever you're doing, look for that competitive edge.

For me, you know, I realized I could renovate these properties. There were a lot of properties wanted that needed renovation, and you can get pretty good deals on properties. So I thought, well, if I can buy a property below market value, that allows me to start with an instant win, and then I'm collecting cash on cash returns of, you know, at least double digits.

Then I discovered on the other house that I could refinance it and pull money out. And then I started Googling; this is before BiggerPockets was a thing. There was a strategy called the BRRRR, and so I was like, well, you can buy, renovate, you know, rent it out, and then refinance and repeat the house, and just start buying properties, right? And use the bank's money to fund your deals.

Yeah, and so sort of where I realized, wow, like I can make 10% index investing and save everything I'm making, or I can save everything I'm making and buy a property. Like I said, the down payment for a property—like nine grand—that got quicker, then I was like, hey, yeah, instead, it’s shorter, sure. And it was like at 3 months I had a down payment again: 30-40 grand a month in rent.

I mean, you could theoretically get a line of credit to float that one month's rent to buy the deposit for the next house. Yeah, I mean, so you get solid cash out of that. Right? That's a lot of what I did until I ran out of, you know, capital negatives from joint venture partnerships to get.

When it wasn't double digits, that’s when I did my first few joint venture partnerships, and that was pretty good too. So yeah, that’s right. How did you get started? Yeah, in real estate, and then that was 19 properties later. Basically, you just kept snowballing. Oh, yeah, one after another, after another, and 19 properties.

And I mean, if you're thinking about it, it wasn't easy. There were a lot of times where I've been working 50-60 hours a week. I'd fly back from Vancouver on a consulting gig on a Friday, and I would go renovate one of these properties with all my sub-trades there. I'd be there all weekend.

Yeah, what do you leave? So Hugh, did the renovations yourself or did you hire it out, or what did you do? So in the beginning, I hired it out, but I worked with really affordable guys—guys who were willing to, like, take cash and really, I’ll show you how to do this. So I've worked alongside the plumber; I worked alongside the electrician, alongside the flooring installer, yeah, drywaller, and just learned how to do pretty much everything.

There was a point where, like, I ran out of money during one of my projects, and it was just me renovating. 'Cause I knew that money, and I had materials in the garage and I’d bring it over. It was just me drywalling because I could write. Let’s say anyone that's crazy. You know, when you're in business, you're doing anything, and you expand too quickly, you know cash flow management is a big, big piece of that.

So there was a time where I got everything myself, and you know, then I got to a point where I had three crews going, working on three projects at once. In 2017, that was a lot. Like, I was working again, hundred-hour weeks. That’s not what it paid off.

So what are the big questions? How did you learn how to do all of this? Because that's one of the things besides subscribing to my channel, obviously, and smashing the like button and clicking the notification bell, YouTube notifies you in time I upload a video. Besides doing that, how could you learn how to buy real estate and do all of these things? How did you learn?

Yeah, I mean, that, you know, you do a lot of reading. You pick up books. You might start with books like Rich Dad Poor Dad and things like that to get you started. You know, there are a lot of, nowadays, like BiggerPockets.com is a huge one. There are a lot of really great YouTube channels like you’re doing videos. I mean, there are a lot of people doing videos out there that can help show you how to do this.

But in the beginning, I didn't know about a lot of these resources, so it was me just trial and error and a lot of just failing and moving forward, right? Like the fail fast-forward technique, where you just fail, you learn from it really quick, you recover as quick as you can. When someone, my tradesman, comes and steals from you, you learn really quick. I had to put in a procedure to stop that.

Right, about that system. So a lot of just, you know, my first renovations weren't leading 'cause I was doing a lot of the work, but there was a lot of wastage. There was a lot of, you know—I mean, just as you learn how to do stuff, um, yeah, you just get more efficient the more you do it.

So for me, it was about just trial and error and how they had resources like people like our channel and BiggerPockets.com. I think I would have been able to, you know, do it faster, did it? Yeah, that makes sense. So maybe you could have had more than 19 properties had you known what to do from the beginning.

You didn't have a mentor or anybody, did you? Because a lot of people, I think, always say like, "I don't have a mentor; I can't do this because there’s no one telling me." But like you, it sounded like you were kind of figuring this out on your own then.

Yeah, I think my first sort of mentors, and they were more peers, were some of the folks I met, you know, here in London, Ontario. I went to a BiggerPockets meetup, and we had a real estate association, and I met a lot of these guys probably in 2016, early 2017. That’s when I doubled it, right from like seven properties to like 15, surrounding myself with a lot of the guys who were just—there's a lot of guys just killing it.

I mean, I would talk about like Matt and keep it, and then, yeah, it’s not multi-room; I don’t know about yet—Jeff, why bro? All those guys. Yeah, killing it here in London, Ontario. And when you're around people like that, you surround yourself with that, you just want to up your own game.

Yeah, just everyone just upping their game; you're like, you know, I can just get one more property. Yeah, you just feed off that. Yes, yeah. And so it’s just think you’re the average of your five people. So that’s when I got the right people in my life, and I kind of made a change on the upward trajectory.

Yeah, and then why did you decide to go from 19 now down to seven? Why did you decide to cash out? Because you have a Shrek over a million dollars in profit. Yeah, this is not imaginary money here where it’s its equity, and people like, “Debt's not real money,” but you actually did; I mean, you showed people that it is actually real money—you mean you’ve got a million dollars in profit.

Yeah, you know, when you’re in the trenches and you've been in the trench since, like, 2012-2017, I grinded hard, like 100-hour weeks constantly, and I remember I quit my job—my full-time job—for three years. I was a manager. I’ve been promoted two times, so I’ve been grinding that career trajectory.

I was like, you know what? This isn’t making me a lot of money. I’m making more in one deal than I’m making all year in the day job. Yeah, so I’m like, this is really just helping get mortgages, but now I’m at a point where I can find other ways to finance my deals.

And so I pulled the trigger on that in March 2017. So it’s been a little over a year now since I quit that job, and at that point, I took on five projects, so I had five renovations going at once, five crews, and I was placing tenants. I bought a property building that had 22 bedrooms and ten bathrooms, so it’s like a rooming house situation.

People were calling me constantly—like at 3 in the morning, I’d be getting calls like, “Oh hey, we broke the plumbing on the sink, and it’s flooding from the second floor! Get over here! Like, your house is ruined!” Yeah, and so you go rush over. There was a lot of that, and my daughter at the time was maybe...you know, we got pregnant in 2015, so she was born in 2016, and in that time, not that would have made me, too, in a big way, right?

And so now I was thinking in 2017, I built this nest egg—I built this F-you money where, you know, I don’t need to ever have a job again. I could just sell everything and invest passively and never have to work again, yeah. And stuff for me was a big safety thing coming from nothing and getting to this point. It was like this was my goal. I’ve reached that first initial goal, which was financial independence.

So it was really at that time, you know, a lot of things were going through my head, and like those bad tenant situations were weighing heavily on my mind. I had to fire a property manager for a number of reasons. A lot of things happened; I had to fire a property management company, and there was a contractor issue that I had.

So just all of these things happened at once, and it was one night my phone’s just ringing constantly. I'm like 80 messages after, like, we went to a movie, came back—80 messages. And that for me was a moment where I was like, “I’m done with this; I just want a break.”

And I couldn’t find any—I didn’t know anyone who could take over the load right away. So, I was like, “I’m gonna sell and cash out like a million dollars with this and move it out of real estate.” I thought, you know, Canada's real estate market is very hot. Very well, it's a good time to cash. I didn’t know they would go even higher.

I mean, you never know. Remember that the top is gonna be impossible. Like you can’t time it, Natalie, who the next day it went down, went down in price, so I cashed out. That’s right; it’s always gonna go up. It’s gonna continue going up after you sell it—almost always.

And so, yeah, I mean, I sold, and I got down to four properties in February, and then I bought three more recently with friends. Yeah, drive Metro partnerships where I’m half-half, and I did that because I want to support some of my friends and work with them, and I enjoy the hunt of real estate.

I really enjoy it, yeah. So that for me is just—it’s more of a bit more of a hobby now than anything else. Oh yeah, do I regret that? I mean, I don’t really regret the decision, but there were things on my mind at that time, you know, twelve thousand a month net cash flow.

Yeah, it’s fantastic, right? That was about what I was generating for my portfolio, and that’s good. What’s about was it gross on that? Probably thirty-three thousand, one—about thirty thousand. That’s what the front of all thousand dollars a day gross rent. That’s incredible, man, yeah.

So, at first, I’m up. It’s a big rush of cash, yeah, which was nice. So what’s your recommendation for everybody watching in terms of like maybe getting started or anything that you feel like really helped you along the way? Then people can imitate and basically copy.

Yeah, I mean, the thing I like about my story, my story of my strategies is that anyone can do it. You don’t have to come from a, you know, rich background or, you know, I mean, so that’s a really nice factor. I think is that anyone can start with their first property and learn how to BRRRR and buy, you know, several properties.

You just need to maintain a full-time job; that really helps you keep a good credit score. There are certain things you need to do to Jack effectively. But if you did that, then anyone can emulate that. And the big thing about real estate that makes it better than the other businesses that I've looked at—and even investing in like public equities or public debt—is that with real estate, you can borrow like eighty percent loan to value, like all day long.

Yeah, right? You can even borrow more than that. You go nice job? Do you want to get really ballsy? You absolutely can go ahead. Yeah, 100% I pay a mortgage insurance—you can borrow so much against real estate. You can’t do that with other businesses.

Right? Most businesses, you can’t even borrow, you know, against half of the assets, right? But they consider, like, the building to be something that’s very, very safe, right? Real estate’s fine. Banks are willing to get the intangible asset, and, yeah, it’s there. People need—they can live in it, right?

And they—it’s appreciating, so people are willing to get behind it. It’s just such an easy way to—you know, some of my properties were triple-digit returns. Like, who’s getting consistent, like, 100% return on the value? I could consistently double my money.

It was like double, double. The devil’s advocate here; Canada has been—you’ve ridden such a bull market. Yes, so I would hate people to potentially see this five years from now, yes, look back and maybe the market tanked, and they're like, "We can’t do it."

Like, you could lose 100% a year. I just like I put in twenty grand down, and now I lost fifty grand. You have capitalized on a very rapidly appreciating. So with us, I mean, we both got in at the very bottom of the market and ridden it up and capitalized on that, yes.

So there is the potential. At the same time, we’ve been in a great position. Yeah, you know, my counter to that, like people who say, you know, “You didn’t do anything yourself; it was all just luck,” right? I mean, the ten properties I was buying were cash cow properties; they weren’t appreciating-style properties.

So I didn’t buy for—it wasn’t a speculator. I was looking to buy cash cows that even if property I was depreciated—when you're making 2000 above the mortgage every month from per property, you can cover, like you can cover all day long faster, all right?

So in a down market, I still would be a millionaire today. Yeah, yeah, I wouldn’t. So I didn’t run the numbers once. If it was just if the real estate market had been flat, and I think I lost five thousand less than I have now, but still that million-threshold, still financial independence, still being able to buy the properties that did—

Even in a flat market because I was buying for cash flow. So you're gonna look to buy properties, and you want a strategy that’s gonna be recession-proof. Look to target like the lower—not lower income, but like the lower threshold in the market. I agree.

Lower house price ones that tend to have, you know, good strong rents. If you’re renting to tech clientele that you know, it’s fixed to like a fixed income—like an in retirement, things like that—you’re really safe. So that’s sort of, you know, real estate is really one of these things that I do really believe is recession-proof in the sense that if you're going for cash flow, to me, it really doesn’t matter what the properties are worth; it’s how much you get every month.

Because I don’t care if the property is worth 1, 2, or 800 grand—if I’m earning the same every month. Unless I’m planning to sell or refinance the property, but after a certain point, you don’t care. I don’t care if the market goes down as long as I get the same amount of rent.

Yeah, so when it comes to buying rental property like that, when the market goes down typically, people aren’t buying as many properties and more people are renting, so just as an effect of that, usually rental properties end up doing better because there’s more competition for renters. There's more people in renting—it's in—that’s right.

And then when the market goes up, all of a sudden, sure, maybe the demand might not be there quite so much for rent, but now the property just went up 20% of value. So you make money on the other side. So like either way, you end up making money in the deal with the market's up or down.

But obviously, I mean, the helps of the markets—so do your homework; that’s the big thing. If you're doing your homework, it's hard to really screw it up in real estate, you know, it's perfectly real estate in general.

Yeah, long as you’re buying smart, and the longer you hold, the less risk there tends to be. If you're trying to buy something and then flip it after six months, the risk is there. You could lose some money; you overspend on the property; the market goes down. There are so many variables that could happen.

But when you plan to hold for like 10, 20, 30, 40, 50 years or just never sell it, I mean, the risk I would say is nearly 0%. It’s not easy. As long as you have the income to store the property or as long as the property cash flows, you just hold it. I mean, that’s really all that comes down to if you want to reach financial independence.

And I think that’s the drive for most people investing in any business, real estate, whatever you’re investing in. At the end of the day, the goal is to reach, I think, financial independence—to have that freedom to do whatever you want with your life, right?

And then find your why. To get there, there’s only three things you can do: you can spend less, you can earn more, you can maximize your returns. And in that word, like spending with us, yeah, is way more impactful because it allows you to save more.

Yeah, and open requires you to need less when you retire, so your number you need is even less. Earning more? Try to pick up a side hustle; there’s always a way to earn more in some way. Yep, good guy, great emotion at work.

You can pick something up. If you don’t have to play piano, teach on the side, you know what I mean? Buy a rental property, something. And then maximizing return becomes more important as you build that slope upwards.

I agree. The exponential growth comes from, you know, each percentage point of return is so important. So yeah, ten percent versus 25% is huge when you've gotten a million dollars and, yeah, versus when you have ten thousand dollars; it doesn't matter, really. Return on investment—this a lot of people say, you know, I need a million percent. If you have ten dollars to invest, it doesn’t really matter—like, go save some money.

Yeah, that’s probably the best way to I think get started: just pick up your frugal roots. Yeah, I agree. Well, thank you so much for being on the channel. You guys have to check out Mike’s channel. I’ll put a link in the description, and I’m sure you’re gonna comment, so I’ll just pin your comments there.

Yeah, check out his channel. He’s putting out videos pretty frequently—amazing, like amazing content. I mean, really good stuff, so check out his channel for sure if you want to see more of him. And we’ll do more videos together, I’m sure, in a future, well, yeah.

As always, you guys, thank you so much for watching. If you guys made it all the way to the very end, just let me know you made it to the very end. I read every single comment, so if you guys want to be a part of that, I’m sure you'll read every single comment too.

So make sure to comment down below. Let us know your thoughts; if you have any questions, we’ll be there answering any questions you have. Also, watch it all the way through. And you haven’t subscribed yet? Make sure you smash the subscribe button; smash the notification bell. But I’m sure they’ve done that already.

Feel free to add me on Snapchat and Instagram—probably Instagram at this point; I don’t really post anymore on Snapchat. I’ll put your Instagram in there as well, the link, so all be—everything is gonna be in—just open up the description; you’ll see it.

So thank you again for watching, and until next time...

A few moments later.

[Music]

And you're walking with a duffel bag, this forty pounds. I'm like beyond announcing a spritely, especially heavy to carry.

[Music]

You think he suspects anything? Not a chance.

[Music]

[Music]

How's it going?

[Music]