He Quit His Job and Built Nearly $2M by Age 32

Early Financial Beginnings [00:00:00]

• Kevin's interest in personal finance began in high school with side hustles and a desire for passionate work.
• His father's 40-year career as a trader influenced his pursuit of early retirement and financial independence.
• He explored various jobs and internships, always looking for ways to generate passive income.

  "So I would say that's what initially sparked, you know, the interest in personal finance, and ultimately led me to, you know, learn more about real estate."

First Real Estate Exploration [00:01:35]

• At 18, Kevin earned $6,000 in a month from a technology YouTube channel, sparking an interest in real estate.
• He was initially approved for a mortgage of only $70,000 due to unconventional online income.
• His deep dive into real estate research began in 2017-2018 after discovering BiggerPockets and listening to hundreds of podcast episodes.

  "But ultimately, I think I only got approved for like 70,000. I had interest at that point."

W-2 Income and Mortgage Approval [00:02:40]

• After graduating in 2017, Kevin started his W-2 career at Deloitte in valuations, earning $63,000.
• His YouTube income was more stable at $1,000-$2,000 per month, supplemented by other side hustles.
• By late 2018/early 2019, with his W-2 income, he was approved for a mortgage of approximately $500,000.

  "So I think at that time, it was like anywhere from 1000 to 2000 a month off YouTube income."

Acquiring the First House Hack [00:04:10]

• Kevin focused on finding 2-4 unit properties in Chicago, a market with good supply for small multifamily units.
• He found a value-add three-unit property in Logan Square for $445,000.
• He utilized a special program allowing 5% down for those earning below $70,000, which he qualified for.

  "And then I started working in the big four at Deloitte valuations that I had my W-2, my real job back then."

Defining "Value Add" [00:05:20]

• For Kevin, "value add" meant cosmetic renovations and essential maintenance like HVAC, avoiding major structural work.
• The goal was to increase rents after renovations to improve the property's financial performance.
• He took over a duplex-up unit, while the previous owner's family occupied the unit below.

  "So try to keep it as minimal as possible. That way I knew I could increase rents after I renovated everything and then make the numbers work."

Market Sentiment and Initial Fears [00:06:15]

• Chicago's real estate market in 2019 had a bearish sentiment, with stagnation in prices and rents compared to other areas.
• Kevin felt excited but also overwhelmed, realizing the scale of his investment, which was multiple times his annual income.
• Colleagues involved in valuations expressed concerns about buying at a market high.

  "On a scale of one to 10, how terrified were you going into this investment, deploying what is multiple times your annual income into this this three flat in a city that maybe didn't have the best outlook at that particular time for a lot of people nationwide?"

Renovation and Financial Buffer [00:08:00]

• Kevin analyzed hundreds of properties and created detailed financial projections in Excel, adding a 30% buffer for unexpected costs.
• He spent around $82,000 on renovating two units, which was close to his budget with the buffer.
• At one point during renovations, his checking and savings account balance dropped to $1,500, highlighting the financial risk.

  "But yeah, I think at the time, I would have to look at my my numbers, but I think I spent around $82,000 on renovating two of the units."

Home Depot Adventures [00:09:45]

• Kevin frequently made trips to Home Depot and Lowe's, sometimes multiple times for the same project.
• He didn't own a car at the time and would bike to the store, a mile away, carrying supplies in a basket and backpack.

  "So if it was something minor, I can just toss it in there. But yeah, a lot of trips to Home Depot and Lowe's, that's for sure."

Learning on the Job [00:10:40]

• Renovating the units was a learning process, including dealing with contractors and understanding different materials.
• He finished renovations in October, realizing it was a slow rental period in Chicago.
• His duplex-up apartment remained vacant for three months before being rented in January.

  "So dealing with contractors, kind of learned on the job. There's so much behind the scenes of like different types of paint, how to what tile to put in a bathroom or kitchen."

Tenant Selection and House Hack Benefits [00:12:00]

• Kevin prioritized thorough tenant screening, including social media checks, as he was living in the building.
• His first tenants were a great family who paid rent on time.
• The house hack reduced his largest expense (housing), provided positive cash flow, built equity, and appreciated in value, significantly increasing his net worth.

  "But yeah, they were great. They're very friendly, paid money on time. And from all the bigger pockets like podcasts, they always say tenants can make or break a deal."

Strategic Cash Hoarding [00:14:00]

• To fund the house hack and renovations, Kevin prioritized hoarding cash over investing in retirement accounts like HSA, Roth, or 401k.
• He felt this aggressive approach was justified for an early-career individual aiming for a house hack.
• This strategy involved opportunity costs of not investing that cash in the market.

  "So I think, yeah, before I was contributing to it and then when I was renovating, I really didn't know how much I was going to spend."

Net Worth Growth and Investment Strategy [00:15:40]

• Kevin meticulously tracked his net worth, which grew from $128,000 at age 24 to $379,000 two years later, and $451,000 by age 28.
• He kept his equity estimations conservative, based on acquisition and renovation costs.
• He saved aggressively in a high-yield savings account, planning to buy multiple multifamily properties, and was once under contract for a second property.

  "So I actually see here that back when I was 24 in 2019, my total net worth was like $128,000."

Career Progression and Increased Income [00:18:30]

• After four years at Deloitte, Kevin moved to a startup in business development, increasing his salary from $72,000 to $100,000.
• This role was riskier due to the company's unprofitability but offered higher pay and a more interesting career path.
• He continued to save aggressively, aiming to purchase a second multifamily property.

  "So I was able to increase my salary, I think from 72, 73,000 at Deloitte to then 100,000."

Transition to Entrepreneurship [00:22:00]

• Kevin transitioned to a finance role at a larger company but found himself less passionate compared to his online side hustles.
• He realized his side hustles were more engaging and potentially lucrative than his W-2 job.
• His decision to leave his corporate job was driven by a desire to pursue his passions and a realization that the opportunity to do so might become more difficult later in life.

  "So this is what I thought was so interesting when we chatted in prep for this interview here is the headline, I think, in your story is you left your job basically to pursue side hustles."

Side Hustle Income Streams [00:24:00]

• Kevin's side hustles included short-term rentals (Airbnb) and various online ventures like Amazon review videos.
• Amazon review videos, set up initially, continued to generate passive income ($400-$700/month) even after he stopped creating them.
• His Airbnb income from a garden unit was substantial, earning $57,000 in one year.

  "So I guess I could break down like side hustles was like several different buckets. Not only did I house hack, but also I did short term rentals."

Leaving the W-2 Job [00:27:00]

• Kevin left his W-2 job in September 2023, setting a goal to replace his salary with side hustle income.
• He bet on himself, knowing he could return to W-2 employment if needed.
• His YouTube channel alone was on track to generate over $85,000 in 2024, with total income from various ventures reaching $145,000 in 2024.

  "So I think for me, I always wanted to do something for myself, even throughout high school and college, always having the idea in the back of my mind."

Financial Progress Post-Corporate [00:30:00]

• Kevin's combined household income for 2024 was projected to be around $271,000, exceeding his previous W-2 salary.
• He was on track to earn $145,000 in 2024 from YouTube, real estate commissions, and short-term rentals.
• He works more hours than a W-2 job but finds enjoyment and lacks the "Sunday scares."

  "So altogether this year already made 145,000, which would have been, you know, even better than if I were to stayed at like the W2 job then."

Marriage and New Beginnings [00:32:00]

• Kevin married in September 2023, and his wife, who works in data analytics, was initially concerned about his transition to entrepreneurship.
• Sharing his financial data and tracking systems helped her understand the viability of his income streams.
• They moved out of the house hack property and purchased a primary residence in the Western suburbs of Chicago.

  "When you tell people, especially YouTube, I think they have a wide spectrum. Either you're making like $200 or $2 million."

Selling the House Hack [00:34:00]

• Kevin sold his three-unit property in May for over $1 million, significantly exceeding his purchase price and renovation costs.
• The sale occurred during a high-interest rate environment, but the property appreciated substantially over seven years.
• He is now considering options for the proceeds, including buying a business, investing in the stock market, or paying off his primary residence mortgage.

  "So I ended up selling for a million, 50,000. Wow. Wait, what? You were 527-ish all into this property and you sold it for a million dollars?"

Deciding the Next Financial Move [00:37:00]

• Kevin's net worth is approximately $1.98 million, with $1.48 million in taxable accounts and $187,000 in retirement accounts.
• He is leaning towards paying off his primary residence mortgage (6.625% rate) and investing the rest, rather than starting a new business, especially with a baby on the way.
• The decision involves balancing risk tolerance, family needs, and market conditions.

  "So right now it's mostly just sitting in one to three month treasury bills and it's, yeah. Kind of like another exciting chapter right now, there's three kind of like main buckets. I'm kind of deciding what to do next."

Financial Independence and Parenthood [00:41:00]

• Kevin considers himself Coast FIRE, with enough invested to fund retirement by age 65, but continues to generate income through side hustles.
• The impending arrival of their first child adds a new layer to financial planning, influencing decisions about work hours and expenses.
• He acknowledges the challenge of balancing entrepreneurship with new parenthood and the potential need to simplify his financial strategy.

  "I think on top of it too, it's a combination of, yeah, I think, like you said, where I'm at in life, how much risk I want to take."

Mortgage Payoff vs. Market Investment [00:44:00]

• The decision between paying off the 6.625% mortgage and investing is complex, with tax implications.
• Kevin's marginal tax rate makes the after-tax cost of the mortgage interest higher than the headline rate.
• For entrepreneurs with lumpier income streams, paying down debt can provide valuable financial stability and headroom.

  "So that mortgage interest is much more like a 30% lift on that, 28.9% lift. So what is that? 6.6 times 1.28. You're looking at something that's more like an 8.4% interest rate in terms of tax treatment."

Real Estate Agent Aspirations [00:48:00]

• Kevin recently obtained his real estate license and has already closed four deals.
• He is exploring strategies to generate business as an agent, including open houses and leveraging platforms like BiggerPockets.
• The podcast hosts offer advice on becoming an investor-friendly agent and generating leads.

  "And then also I got my real estate license and I closed four deals this year and then still had income coming in with the short term rentals for the first half of the year and then other little side hustles."

Was Leaving Corporate Worth It? [00:52:00]

• Kevin definitively states that leaving his corporate job was worth it, despite new challenges.
• He feels more passionate about his work and has experienced the happiest years of his life since making the transition.
• The reduction in stress and increase in passion have significantly improved his overall well-being.

  "Ultimately, I would say yes, without a doubt. But I would also put a little asterisk to it."

Maximizing the Present [00:54:00]

• With a baby due in March, Kevin is advised to capitalize on the current time to grow his ventures before the demands of parenthood increase.
• The transition to parenthood will likely bring increased expenses, including potential daycare costs and a second car.
• He acknowledges the need to review their budget and prepare for these upcoming financial shifts.

  "I think that the next five months between now and March are a great time to make hay while the sun is shining in there because it might be a little bit of time before you're able to do that again."

Kevin's Online Presence [00:56:00]

• Kevin Financial Tutor is Kevin's YouTube channel, focusing on helping people save and make money through side hustles, real estate, and investing.
• He shares his personal financial journey and experiments with different investment strategies.
• He is available for real estate inquiries in the Western suburbs of Chicago.

  "Yeah, I think the biggest one is on YouTube, Kevin Financial Tutor. Definitely a lot of videos to help you, like I said, save money and make money."

Final Thoughts on Buying and Investing [00:58:00]

• The hosts emphasize that now is an excellent time to buy real estate, as motivated sellers are on the market before the spring season.
• They advise against falling in love with a specific house and encourage focusing on finding a property that works.
• Kevin's journey exemplifies the power of strategic financial decisions, hard work, and pursuing passions.

  "And now is an excellent time to buy because there are houses on the market that if your house is on the market right now, you need to sell it."