Darrin Gross has a great podcast that I was recently interviewed on, The Commercial Real Estate Pro Network show. Darrin is an exceptional host, a fellow Kansas State grad, and has a great story on how he became a successful real estate investor, which is why I have asked him to share his story with you today.
He is a shining example of what it looks like to have a W-2 job and still be involved in projects on the side to build up your portfolio. And, of course, he does it with a team.
Darrin’s path is one you can follow, too.
Without further adieu, here’s Darrin…
All About Darrin
The J is for John, but my parents always called me Darrin. So the only time I am called John is the first day of school, if I get pulled over, or when dealing with the TSA. So, please call me Darrin.
I am a husband, father, insurance broker, real estate investor and podcast host.
Since 1993 I have been employed as an insurance broker based in Portland, Oregon. Insurance has allowed me to provide for my family with some fun along the way.
I fully participate in my employer sponsored 401k, but have recently realized this is merely a savings account with interest. The value will be taxed upon withdrawal, unless you have it converted to a Roth. However, when compared to the accumulated equity in my rental properties, my 401k does not compare.
Inspiration to Invest
One of my earliest insurance clients was and is a real estate investor. At the time, he was actively growing his portfolio. He focused on properties with seller financing, and called me almost weekly to add another property to his policy. This early activity provided me with a policy that was growing and a mentor who taught me multiple lessons about the power of leveraged real estate for building wealth.
From this initial real estate client, my insurance and investing career was set.
He explained to me how on every property he purchased, he was making a minimum of $100 / month in cash flow. The tenants were paying down his mortgage, and it was all good. At the time, all I wanted was enough for a new car payment.
My real estate investing career started when my client / mentor sold me a rough duplex on a contract. For the down payment, I borrowed $10,000 against a line of credit. The seller carried the mortgage, and I was a landlord.
Seven months later, this property turned into an accidental flip when another insurance client wanted to buy it. The $25,000 profit I made from that sale was all it took for me to get hooked on real estate.
Since then, my wife and I have slowly acquired six single family houses and a 12-unit apartment building. The first four single family properties were purchased with an equity strategy. The tenants’ rent paid the mortgage, taxes and insurance. If nothing broke, I would not lose money.
Real Estate Investing Really Is Possible
Originally I thought real estate was only an equity play. A single family property that produced positive cash flow was a fantasy, or something that only happened after you owned the property for a long time.
That all changed on our fifth property. We built a single family home and rented it to a company that used it as an adult foster care home. This one house has produced passive cash flow, year in and year out, equal to my wife’s former salary. This one cash flowing property provided us the ability to accumulate substantial savings and grow our real estate portfolio even more.
Finally, we had passive income!
Since building that house, we paid off our first rental house, and purchased a second adult foster care home for cash. The cash flow paid for properties and gave us the ability to purchase our first multifamily property, a 12-unit property in Florida.
Actively Investing While Working
Today, we continue to hunt for additional cash flowing properties to create additional passive income. I continue to work as an insurance broker. I primarily work with real estate investors, contractors and professionals. While I am based in Portland, OR, my clients have properties throughout the continental U.S.
My clients include: investors, landlords, private money lenders, property managers, flippers and syndicators. The types of properties they control include: multifamily, office, retail, warehouse, creative industrial, self storage, and schedules of single family homes.
In 2015, I created my podcast, CREPN Radio. It is a vehicle I use to create more value for my real estate clients, and connect with like-minded investors. Weekly, we feature interviews with real estate investors and professionals who share their experience to help me and my listeners grow our portfolios.
New for 2019, I am asking all my guests, “What is the BIGGEST RISK you face?” As an insurance broker, I am constantly evaluating risk, and working with my clients to manage their risk. While I admit the question sounds insurance-related, I am really looking for answers beyond those that can be satisfied by purchasing a policy.
I invite you to check out CREPN Radio to hear and learn from guests for ideas to help you grow your portfolio.
As for insurance, if you have any property insurance questions, I welcome the opportunity to do what I can to help. Sometimes, just the opportunity to talk through your situation with someone else about what you are doing can be reassuring. And sometimes, we uncover some issues that need to be addressed, either by your current agent, or if you would like, I am happy to see what I can do to help.
Learn more or connect with me below:
Email: darrin@jdarringross.com
Podcast: CREPN Radio
Thank you, Darrin, for contributing to our blog. Your example of working with teams on real estate investments, even while in the workforce, is an inspiration to our SAO team and our readers!
As always, if you are thinking of investing in real estate, we’re here when you’re ready.