Real Estate Investing… What I’ve Learned So Far

Rachael Phillips
8 min readSep 14, 2022

Since February 28, 2018, I have owned my condo in Scottsdale, Arizona. I bought it as my first home and decided that when I moved out someday, I would rent it out as a rental property.

Okay, maybe it doesn’t look like the one above, but it is a cute condo in Scottsdale that was affordable and a decent size.

Renting it out first started when I was staying at my ex-boyfriend’s house all the time and therefore was losing money. We had discussed me moving in with him and it made a lot of sense. I found a property manager and they called the next day asking if I could rent out my condo within a week. I rented it out for 4 months and then when my relationship ended, I moved back in.

Jump to February 2020 and I refinanced my home from a 5.375% interest rate, 30 year mortgage to a 2.75% interest rate, 15 year mortgage through a wholesaler and saved myself a total of 13 years of payments and A LOT of money for only about 50 dollars more a month than what I was currently paying. I jumped on board quick and closed the refinance in March 2020.

At the end of 2020, I decided to move back to California (where I am originally from) to buy a house for my dad. I rented out my condo and took what I could with me. My dad had gotten about $25k from my grandma’s mobile home after she passed in 2016 and he had given me a family owned property in my hometown that my grandparents had given him. My dad and I decided to use $20k of his money and I would purchase the rest of a manufactured home to put on the property.

September 2021, I found a single wide 2 bedroom, 1 bathroom almost 700 square feet home that I could afford to buy my dad and use his $20k towards. I moved in with my mom, who lives 10 minutes from him and have been saving up money and paid off all my debt except for my AZ condo.

So, that brings us to today, September 14, 2022! Permits were just given to us days ago to start building the home. After the home is built and I get my dad settled in, I am going to get a HELOC on my AZ property, then purchase a multi-family property and live in one unit while renting out the other unit(s) to offset some of my cash flow.

Since I started getting into this whole real estate investing business, I have read several articles, books, joined bigger pockets, talked to other investors, real estate agents, CPAs to build my real estate investing empire…. and here is what I have learned so far:

  • What a HELOC is
  • What a 1031 Exchange is
  • Why building a house from scratch takes forever
  • What house hacking is
  • Having an abundant mindset

What a HELOC is:

A HELOC is a Home Equity Line of Credit, which means you can leverage the equity you have built in your home to borrow a certain amount of money if needed.

There are a few things about it that make it flexible.

  • You can pay on interest only for a specific amount of time and then pay off the entire credit line.
  • You can choose a fixed or variable interest rate.
  • You only pay for what you borrow

Most lenders do 80–90% of the equity you have built. So, if you have a house that would appraise for $350k and your HELOC is 90%, then you would have $315 as your credit line, but then they subtract out what you owe. So, if you owe $100k, then you would be able to get a line of credit that is $215k dollars. This of course gives you a lot of buying power and raises your capital significantly. The terms are usually around 10–15 years for the credit line and you can borrow whenever you would like in that timeframe.

There are other terms of course and I don’t know all the details, but this is the general idea.

What a 1031 Exchange is:

These are essentially tax exemptions if you decide to sell your investment home and buy a bigger and more expensive investment home. It will prevent you from having to pay the capital gains on the property that you are selling because you are putting the money you gained into something more expensive of the same type (real estate investment home). Again, there are more details on this as well I’m sure, however, this is what I know of it so far.

Why building a house from scratch takes forever:

Now, this is probably only from my experience, but purchasing a manufactured home and putting it on my property has taken a significant amount of time compared to buying a home that is already built. I moved back to my hometown in November 2020 and it is now September 2022 and it is still not done. Granted, it did take 10 months for me to find the best house for my situation, however, I signed the paperwork to purchase it in September 2021 and it is still unfinished. Luckily, a few days ago, September 9, 2022, I got an email that they are finally giving me the permits!!!

My suggestion on this… think twice before you either build a house from scratch or purchase any kind of manufactured, mobile, etc. and put it on your property. It may be more of a headache than you want to deal with.

What house hacking is:

House hacking is living in a home but you use the rest of your home as an investment by renting it out. This is a great way to live for free and possibly make a profit! If you can do it that is….

The reason that I mention this is because I met a couple of house hackers in the Sacramento, CA area recently. They live in a 6 bedroom home where they have a master bedroom and bathroom and rent out all of the other 5 rooms to 6 people… now that is a lot of people living in one house. They said that by doing this, they were able to save up money to buy an AirBnB in Joshua Tree, CA and not only pay for their rent but make an extra profit of $4400 a month!!! That is very impressive! They said that now they are saving for their 3rd home where they will house hack again with 5 or 6 other roommates, while they keep the home they have now and just rent out their master bedroom. This will continue for them… until when, I’m not sure, but it is a great plan and works well!

Now this may not be something that you or you and your partner can do… I totally get that. In fact after college I decided that I could no longer live with roommates ever again and I meant that. So for some of us, it is not an option to house hack like that, however there are other ways to do this also.

For me, I am in the process of finding a multi-family property so that I can have a unit to myself and rent out the one or more of the other ones! This is a great plan for me because I can’t live with roommates anymore and it will offset some of my cashflow! This way I have my own space and I am able to be close to my rentals also if anything happens to them.

I am a strong advocate for doing things like this because you are going to expedite your goals in real estate investing ten-fold if you are able to live like this for a while for a MUCH bigger gain! This is not for everyone, depending on where your life is at in the moment, but it is something to consider when you are looking into REALLY getting into real estate investing.

Having an abundant mindset:

What’s the one thing that you need when doing real estate investing…. you guessed it, MONEY!!!

Most people assume that you need to have a “high paying job” to invest in real estate, but that is simply not true. There are several methods to attaining private capital. This includes options like leveraging equity from someone you know that has their home paid off, getting business partners who have more liquid cash and capital than yourself, etc.

You can read more about this by reading a book called Raising Private Capital: How to Find Private Money Lenders by Matt Faircloth. He is a real estate investor who founded the DeRosa Group. Getting educated about where you can find money will bring you that much closer to achieving your real estate investing goals and I highly recommend this book if you want to get started!

Building the abundant mindset muscle can be a challenge since most of us have been taught that we have what we have with money and can’t do much better…. this is wrong and there is money EVERYWHERE, you just have to go out and find it. You might have to have some difficult conversations or build new relationships, but knowing that the money is out there and that you are capable of getting a hold of it, will provide you with what you need to make it happen.


Since last year 2021, I have been educating myself, building new networks and relationships with other investors, agents and CPAs, I have been able to start building myself up for lots of passive income.

My real estate investing goal is to own many rentals so that I have lots of passive income and will be able to choose what I would like to do during the rest of my time. I am planning on achieving this goal by the time I am 40… that gives me 9 years.

As for you, I hope that you were able to learn something about the SEVERAL ins and outs of real estate investing enough to either continue what you have already started or get started yourself. I am also fairly new to this process and will give more insight as time goes on.

Just remember, you can do this and to keep in mind some, if not all, the things that I mentioned above: what a HELOC is, what a 1031 Exchange is, building a house from scratch takes forever and it is much faster to buy a house that is already built, what house hacking is and having an abundant mindset.