Financial Freedom BEFORE 30: How Rentals Made Me a Millionaire by 29

At 20 years old, Jefferson Simmons was kicked out of his frat house. The entire property was getting remodeled and so he and 47 other college kids needed a place to live. After being discouraged by the rentals he saw in his area, he switched his Zillow tab from rent to buy and saw a $250,000 house for sale. But he was a sophomore in college, could he really buy his first house? Thankfully, he had been saving up since high school. He pitched his parents to Cosign. And next thing you know, he was renovating a basement to put as many frat friends in there as possible. Suddenly, he was cash flowing $300 a month as a college kid. And now, just 9 years later, Jefferson is financially free with a rental portfolio of 17 properties, cash flowing $20,000 a month. He even ditched law school to go all in on rentals, he built partnerships on a low salary, and he did everything he could to scale. Today, we're going to get the full story with exact numbers, strategies, and techniques that Jefferson used to become a rental millionaire before 30 years old. And he's not done yet. Jefferson, welcome to the BiggerPockets podcast. Thanks so much for being here. Dave, thanks for having me. This has been a long time dream of mine. Well, we're excited to hear about your story. This should be a lot of fun. So start by just telling us a little bit about yourself. How'd you get involved in real estate in the first place? Yeah, I'm a 29-year-old Manhattan, Kansas-based real estate investor. I got involved in real estate kind of just by accident in college. When I was 20 years old, I was in a fraternity here, and we had a really generous donor that came in and did a nice renovation through our whole house, but everyone had to move out while that was being done. And so I started looking around town for some places for my buddies and I to live, because we had to figure it out for one year. And let me guess, no landlord wanted to rent to a bunch of frat guys. It was slim pickings out there. And then the ones that were excited to rent to us, I'm not a high-maintenance guy, but they were not great options. So I don't know what prompted me to do it, but one day I was looking for rentals on Zillow, and for whatever reason, I just switched that little toggle from for rent to buy. And I found this house that I could see it was being mis-marketed. It was listed as a three-bed, three-bath, but it was like 2,700 square feet. I was like, that doesn't really make sense, and saw that it had three non-conforming bedrooms in the basement. And I was like, well, I could get a lot of guys in there. And the extent of my underwriting at the time was the little Zillow estimated payment versus I knew what landlords were trying to charge us in rent. And I was like, well, I can make a lot of money if I got a bunch of my buddies in here. And so launched into my real estate career with that one, which it was pretty unconventional. Well, the numbers must've been pretty compelling. How much did it say the estimated payment was on this house? And what was the purchase price? We ended up going back and forth, countering like seven times. And I put the house under contract at $178,000. Wow. Had it been sitting for a while? Yeah, about 60 days. And the thing is, so many times realtors will tell you way too much information. And the listing agent told me, she was like, yeah, this guy bought this house for his son. They live out of state. The son was on the baseball team here. Now he's gone. They just need to get rid of it. So I knew it was a highly motivated seller. I negotiated so aggressively, largely out of necessity as well, because I had little to no money. It was, this is literally what I can afford to pay for it. And there's no working me up because there was no more money. Well, I mean, I was going to ask you that because very admirable that you decided to do this in college. But even if I had had that thought, I did not have any money when I was in college. Working for minimum wage, did you have money or was this kind of like, I'll find a deal and hopefully figure it out later? I had a small nest egg. So I had planned to, my deal with my parents was to pay for half of my education on my own. And so through high school, I cut and sold firewood. I was heavy into 4-H and FFA. I did livestock projects up on the farm. And then April, right before I graduated high school, I got a letter in the mail that I was going to get a full academic scholarship to K-State. Oh my God. Good for you. That's awesome. And so that was a blessing. And then I ended up going to school with a little bit of money in my pocket and it was enough to cover a down payment, but I was working at a restaurant in college. And so no bank was going to loan me or give me a mortgage when I was making 200 bucks a week. I could imagine that. And I went home and just full disclosure, I pitched it to mom and dad. I was like, I made my Excel spreadsheet and a little pro forma for the next 10 years. I was like, you know, if I raise rents and it's actually amazing, now nine years later, how accurate that first document has been. It's been a great, great asset. That's awesome. Good for you. Well, I guess an econ major got you something there. That's great. That's right. What were you planning to charge for rent to your buddies? My payment's still the same. So my mortgage every month is about 1300 bucks. That's with everything? Insurance and taxes too? Yep. It's been a great house. You know, still own it today. And you know, that first year I rented it for 1600 and just been steadily increasing that rent over the years. And I have it rented right now through July of 2027 at 3,100 a month now. Wow. That's awesome, man. Must be making serious cash flow there. Do you do it with a master lease or are you doing the co-living model where you're signing a bunch of leases right now? I do one group and they all put their names on the lease. And then it's followed by a provision that says jointly and severally liable. If one of them leaves, the roommates are on the hook for the rent. I found that they don't care if they bounce in the middle of the night, if I'm mad at them, but if their buddies are irritated at them and saying, we got to cover your rent, they're a lot more likely to get current. Well, that's a great way to do it. And congrats. I love the just hustle spirit, like just figuring it out because you had to, you had nowhere to live. So did you do anything else while you were in college, real estate wise? Yeah. So I closed on that house in May. I immediately took off and had an internship in Washington, DC that summer. And that's when I stumbled on the Bigger Pockets podcast. I was sitting there in my office and everyone was at their desks with headphones in. I was like, what are you guys listening to at work? They were like, Oh, you got to get to listen to podcasts. And I had never listened to anything. And I was like, well, what are they about? And they're like, anything that you're interested in. I'm like, well, I just bought a house. And so I searched real estate podcasts and I've been listening to the show for a long time. And at that point, were you thinking about wanting to be in real estate full time? Or like, what were your intentions to do with your econ degree? So I was econ and I was pre-law here at K-State. That's where I was headed. And then I came home. And then that junior year, actually the house right next door to the one that I bought, I was over there working on some stuff. And I lived on that street as well. The rental that I was renting was there. And there was a sign that went in the yard and it was a duplex and it was going to go on a bank foreclosure auction. And I got very, very excited when I saw that, but I had no money. Absolutely nothing at that point. I mean, I was as broke as you could be. And so that's where this uncle comes into play. He had a bunch of C-class homes in a different city and he was an attorney. He was a big mentor of mine growing up. He was selling his portfolio at the time, really looking at retirement. And so I hit him up. I said, Hey, there's this property that's right next door to mine. It's going to go on an auction. I have no money. What do you think if we partnered on it? And he was really receptive. He was like, Hey, I'm trying to get out of the business, but if you need a money partner, we can work something out. Yeah, for sure. He came into town. We looked at it together. We couldn't go in the house. So we're peeking in the window best we can see. And it was in pretty rough shape. We went to coffee and we sat down and we were doing as much underwriting as we could. This is what a kitchen is going to cost. It needs a new roof. And he was going to go on an international trip during the time that it was going to sell. And so he told me, he's like, Hey, you're not going to be able to talk to me. I think we can afford to spend up to $140,000 on this after we finished our underwriting. He's like, but it's up to you. I'm not going to be reachable. It's a lot of trust. Yeah. So I will not ever forget it. I remember I had a little 125 CC motorcycle in college. So I get done with class. I'm riding home on my motorcycle and I open up my laptop and it's time to try to buy a house. And I ran that thing up to about a hundred thousand and the listing agent reached out to me a few days later and said, Hey, even though it did not meet the bank's reserve, they wanted to get really, Oh yeah. You know, it sounds like both of these deals. First one, you did kind of opportunistic that you just kind of born out of necessity. Second one, you just saw a sign, right. And did that, but you were also listening to the podcast at that point. Did you have a goal of what you were trying to accomplish with real estate? Or at this point, you're just kind of taking things as they came. Yeah. At that point, listening to bigger pockets, I realized that this could be an Avenue, you know, to really have a different type of lifestyle. And so, yeah, I was, I was really inspired early on. And then, you know, also at the time those deals were cash flowing. And so I was like, okay, what are my bottlenecks deals then money? So I was just, I was really trying to learn as much as I could and then grow as fast as I could after that. Jefferson want to hear about the second deal and how you've grown since then, but we do have to take a quick break. We'll be right back as a host. The last thing I want to do or have time for is play accountant and banker, but that's what I was doing every weekend flipping between a bunch of apps, bank statements, and receipts, trying to sort it all out by property and figuring out if I was actually making any money. Then I found baseline and it takes all of that off my plate. It's bigger pockets, official banking platform that automatically sorts my transactions matches receipts and shows me cashflow for every property. My tax prep is done and my weekends are mine again. Plus I'm saving a ton of money on banking fees and apps that I don't need anymore. Get a hundred dollar bonus. When you sign up today at baseline.com slash BP bigger pockets pro members also get a free upgrade to baseline smart. That's packed with advanced automations and features to save you even more time. Welcome back to the bigger pockets podcast. I'm Dave Meyer here with investor Jefferson Simmons, talking about how he fell into his first property, started to scale with a partnership. How'd that second deal go for you? It went well. We did a full renovation on this duplex and it turned out beautiful. We scraped it down to the studs and really had a blank canvas to put this thing back together. And it was a real learning experience for me because I did a light rehab on my first one, but to go all in and do a full scale renovation on my second deal just grew me up really quickly. I found there was a building materials liquidation auction. And so went to an auction. You're like, I won one auction. I'm just going to keep, keep bidding that stuff. Well, you know, a new set of cabinets at home Depot was 15 grand. And so I went to this place and you know, it was, you know, the whole set, it wasn't custom cabinets, but they were brand new, never used. And so I bought two sets of cabinets there for three grand each and little things like that. Just always trying to find an edge to save some money. And that property turned out beautifully. Renovating a duplex, probably one of the best ways to make cashflow right now, you know, find something that's not great or add, you know, buy a single family, turn it into a duplex, but it can be intimidating, especially if you've never done this before. So maybe share with us some things you learned or some things you would have, you do differently if you were just doing this for the first time. Yeah, we, we hired a general contractor for this project and it was good that he was there because I did not know what I was doing, but I was there every day, you know, trying to save money where I could, you know, putting door handles on, or if I could paint something, but I got to know a lot of the subcontractors through that project. And that was a turning point. I've done several rehabs since then and never used a general contractor since just really. Okay. Yeah. So I just GC all my own projects, but Manhattan's a town of 50,000 people. There's three different companies that do tile. There's, you know, a handful of different painters. I know everyone by on a first name basis. And so that was, that was really the biggest turning point of that and allowed me to do large rehabs for a lot better price moving forward. Absolutely. Yeah. Running your own subs is going to save you money if you're good at it. There's like a big caveat there. Like if you're not just pay the GC, but yeah, if you're going to commit yourself to this and know how to do it, it's a great way to save some money on a rehab. And I assume it worked. You cashflowed it. It cashflowed. And same thing on that one. I was, I was renting it for about 2,800 a month. And now it rents for like 35, 3,600 a month. That's awesome. Yeah. So at this point where you like screw law school, I'm not going to law school what were you thinking? Yeah, that's this part of the story. So shortly thereafter I graduate my undergrad and I do take off for law school and you know, I was fortunate to graduate with my scholarship. I had no student loan debt coming out. And I remember sitting in, you know, my, my first class down there in law school and they were talking about the bell curve of law school graduates, you know, where you graduated would determine what you're making. And I started thinking, I was like, I am not the smartest guy in this room. And I'm going to leave here with a hundred thousand plus of student loan debt. I'd much rather have another mortgage that's going to be paying me back. Yeah. At least it's good debt. Yeah. That was a big decision and a big pride pill to swallow because a lot of everyone in my orbit thought I flunked out, but I was like, I'm going to go home and chase this real estate dream. And so I left after one semester. Wow. I was pretty confident, you know, I done two deals. I had the proof of concept. I was sure the path that I wanted to go down at that point. What was your plan for living though? Cause you know, cashflow great. Right. But you're sounds like you're making a couple hundred bucks at most, right? Probably not enough to cover your living expenses. So how, you know, were you going to wholesale or flip or how did you plan to survive? I did graduate my undergrad. So I had a bachelor's degree. And so I was like, you know what? Now I'm done with school. It's time to go get a job. So I worked as an underwriter at an insurance company for a couple of years. But when I was doing that though, I was always looking at deals and decided to go ahead and get my real estate license at the same time. Nice. Okay. And so during my second year there, I was showing houses on nights and weekends as well. And so, you know, at my insurance job, I was only making $42,000 a year. So two sides of that coin wasn't a lot of money to deploy into real estate, but at the same time, it didn't take that many deals to replace my income. What kind of deals were you looking for at that point for yourself, for your personal portfolio? You know, I would, I had big dreams. I would see apartment complexes that were, you know, six plex or 12 plex come up for sale. And that was bigger than anything even, you know, my mentor, my uncle had done at that point. And so I really didn't have anyone to lean on for something like that. So really just drilled into the single family homes. And that's what I did for several years and got to be really good at that. I had been walking up and down that street all the time doing that second rehab. And one day the woman that lived across the street from me just knocked on my door and said, Hey, my husband and I are moving to California to be closer to our kids. Do you fix up houses? And I was like, yeah, I do. I do. I'm a real estate investor. And so she goes, why don't you come over and tell me what you give me for my house? So I walked over there. I looked at it and I offered her 150. And she said, I have a friend that's a realtor. And they told me it's worth at least 200. So they listed it for, I think, 210. And it sat there for six months. They dropped the price, dropped the price. And I remember I would come home from work and I would sit in my living room. I had big windows right there. And I would just pull the curtains and look to see if people were coming to do showings. And finally they lowered the price down to like 168. And I could see that we're starting to get more traffic on that street. So I approached her again. And if you think, they've been sitting on it for six months, still paying the property taxes. They weren't there anymore. So I reached out to her. I just said, Hey, my offer of 150 is still good as is. And they took that. Nice. That's great. Well, I think this is a really good example and lesson about how to operate in the market today, because we're going to see more and more of this. They might not take that deal right away. No one who thinks their house is worth 210 is going to accept the 150 day one. It's just not going to happen. Sometimes a dose of reality is required because it sounds like you were pretty close on with your, your first underwriting of what it's worth. Sellers aren't always going to be there right away. And it takes a little time of things sitting on a market. And so if you make these kinds of offers and you feel confident that you're not trying to take advantage of someone, but you're offering a fair price for what you need to buy it for, you're going to have to be patient, but things will come around. Like that's the benefit of making these offers now, because you might not get one for three months or four months, but six months from now, you might get a call. And then nine months from now, you might get another call. And I just think that this is a really important skill for everyone who wants to be buying right now in 2026 to be working on. So how'd that one work out? That one, when I look back, everyone likes to romanticize, you know, how hard they worked and everything, but that one, I was doing a lot of it myself and the rehab took me a little over six months. And so at that point, when I was still early in my career, it wasn't like I was rolling in cashflow. I was, I remember every single paycheck I got was just going towards funding, you know, the mortgage for an empty house or my rehab. Cause I, I funded that with my own cash. And so looking back, you know, that one is really sweet. Now it rents great. It, you know, I have 200,000 all into it and it rents for 2,600 a month now. Amazing. So, yeah. And it sounds like it sort of became a template for you. Is that right? Something you're like, I can do this. I can repeat this model. I fell into what I think a lot of investors do, which is, I was like, I'm going to buy one house every single year and, you know, just keep saving up for the next down payment, next down payment. Then I realized that's really a limiting belief. I ended up finding a private money partner down the road, which really allowed me to exponentially expand my portfolio after that. Well, good for you, Jefferson. Sounds like you positioned yourself where you can start to scale and really start to go after your bigger real estate goals. So tell us how you went from, you know, one, one deal a year, you know, partnering, doing a lot of things yourself into scaling a bigger portfolio. So I mentioned, I was working two jobs, being a realtor and working at the insurance company, as well as, you know, I was doing these projects on my own. And then I started to help my uncle with some of his portfolio. He in 2019 bought a 12 unit. It was our first venture into multiplexes together. And he let me sweat in. I got to sweat in 10%. I helped him renovate the entire thing. We went in and did new kitchens and everything, new floors, new paint. And that was a big deal and really allowed me to start making a little bit more money without coming up with a lot of my own money. And that was a three-year rehab. But at that point, I was starting to make a little bit of money and, you know, get into 2020 COVID, the stock market crashed and I was realizing, Hey, I love this real estate angle, but there's an opportunity to make some good money in the market right now. And so at that point, changed course for, you know, several months and started funneling some cash into the market. Were you buying individual stocks? Yeah. I have a high risk tolerance. So I was buying a lot of individual stocks. Retraining options. Yeah. I was, I was, I was very speculative. So that was actually when Elon was going to buy Twitter, I think Tesla fell down to like $105 a share. And I thought that was absolutely ridiculous. I bought a bunch of Tesla call options and the stock like doubled in the next six weeks. But I had ridden that wave a little bit at that point. And I was like, you know, this is those numbers on screen can just disappear. And so right after that trade, I took all my profits out on that. And I bought two single family houses cash. I love it. With those proceeds. Yeah. Yeah. I invested in the stock market. It's great, but you're right. Like it's just so volatile. I love the idea of just taking profit when you know you had a big win and then putting it into something a little bit more stable. And were you still working at that time? I left the insurance company and I was all in on building my real estate portfolio there for a little while because I was doing a couple active rehabs. I was trying to still source deals and it was a lot at once. And I took, oh, maybe about a 10 month hiatus. And then I ended up going back to work at the university. I was raising money for the local university here for a few years. Oh, cool. Nice. Yeah. And you're still doing that? No, I just, I just left that at the end of last year and now I'm running my portfolio again, full-time. Back full-time. Yeah. Calls you back. That's right. Yeah. So what does your portfolio look like today? Yeah. I have now 17 different properties or 17 parcels. That's 39 doors. I own a hundred percent of that except for I'm a minority partner on a 15 unit with a few buddies and all in all it's around $20,000 a month in cashflow. That's amazing. So when you got a goal and you started thinking, you know, I want to live this life of abundance, like how close are you to reaching that? Or are you just going to keep scaling? Well, I'm a single guy. I have enough for myself right now. I hope that my life situation will change at some point, but I'm also, I'm an ambitious person. I don't want to just sit around and lay on the couch all day either. I love being out in the community, meeting neighbors, potential future deals, talking to people about maybe funding future deals. I just, I'm a very social person. I'm an ambitious person and I see no reason to stop. Yeah. Good for you. That's great. I mean, you just seem to love it. Like I think that's, everyone has different goals. That's what we talk about on the show all the time. You want to do real estate to buy two properties to supplement your income. Great. Do you want to go into a full-time because you really enjoy it? Awesome. Like that's what's so cool about it is that there's just so much flexibility. What are the deals that get you excited right now? Like what are you really looking forward to doing in the next year? One thing that I ought to mention really helped me accelerate after that one summer that I bought a lot. I just had a lot more confidence as an investor. I had done several rehabs. I was managing a lot of tenants and I really got the confidence where I was like, I feel like I can ask people for money now. And so I was an agent. I was helping a client in Texas that he wanted a house for football games here in the fall. And it was when the market was so hot. I remember opening Zillow thinking Zillow was broken because every single listing you'd click on said pending. Things were selling over market same day. It was absolute craziness. And this client, he wanted me to basically walk a property that might come up and vet it for him. And then he wanted to get on a plane and come see it if it was a good option. And things were just moving way too fast for that to work. And so we went through this for a few months and I could sense he was getting frustrated. And just the way things ended up, I had a house that I had just purchased 10 months before with the stock proceeds that I felt like I had gotten a great deal on. And I had a young couple that I put in there and they reached out to me and they said, hey, we just found our forever home. Is there any chance you'd let us out of our lease early and we can go buy this house? And I mean, this is a small town, your reputation's worth a lot. I didn't want to hold them hostage in a house they didn't want to be in. So I just told him, I'm like, yeah, hey, you guys cover the utilities till I find a new tenant? Absolutely. That's fine. So I have this now vacant house and I knew my client was going to be a cash buyer. And so I just had this idea and asked him, I said, hey, when's the next time you're coming to town? We set up a meeting when he was there and I took him to dinner and I said, hey, I want to pitch you on something kind of unconventional. I have this house that I feel like I got a great deal on 10 months ago. I think it would fit basically exactly what you're looking for in your price point. I'm trying to be in growth mode right now, not sell mode, but I have this idea. I will either sell it to you for $25,000 more than I bought it for and say, that's a great 10 months rent I collected for that. But this is also less than a year. I'm going to short-term capital gains on that. Or I said, I'll sell it to you for exactly what I bought it for and not make any money on you. But would you consider writing me a $200,000 line of credit? Whoa, I like that. Yeah. So he kind of chuckled. He goes, wow, you're very direct. And he said, why don't we get coffee in the morning and go look at the house and I'll call my wife. We went and got coffee. He FaceTimed his wife. They walked through the house and I just waited outside on the driveway and he came outside and he shook my hand. He's like, hey, we'll do it. And so that was great. I will have that. That was incredible. That's such a creative, awesome way of creating, again, a win-win situation, right? Exactly. Didn't try and get both. You weren't trying to get a profit and the line of credit. You figured out something that your client wanted, asked for something you wanted in return, and it works for both of you. It's been a great partnership. So three months later, I found this little house for $171,000 and he wired the entire balance the day of closing. So no appraisals, all those bank fees and things like that. And I do pay him seven and a quarter, but that's great. It's more than he's getting on T-bills. It's less than I'd probably be paying at the bank. And at that point I was like, okay, I bought a $171,000 house. I had the $200,000 line of credit. Is that done? And about a year went by and he called me one day and he said, hey, you seen anything in Manhattan? I'm like, yeah, I got two houses that I'm looking at right now. He said, if you need any help on those, holler at me. And so we've done a few more deals together since then. Yeah, that's been a great partnership. And we're friends as well. I love the way that you're approaching partnerships and just trying to find these win-win things. Not only does it get you what you want, but it's fun. It's fun working with people, I think, and just figuring out these ways to get creative and help not just yourself, but someone else reach their financial goals at the same time. That's just one of the more rewarding things that you can do in this industry. Right. Well, thank you so much for being here, Jefferson. This has been a lot of fun. Last question for you. How would you say BiggerPockets has contributed to your growth, if it has at all? It's been extremely instrumental. I was so oblivious when I first started out. I remember as I had a few houses, I was writing leases for full 365 days. And so I was at nine o'clock on July 31st, I had to go in there and clean, do paint touch-ups for my August 1st move-ins the very next day. So just little things like knowing to get tenants out three days in advance or making sure that they hire professional cleaning company. So that way I don't have to be in there recruiting my mom and my cousins and little things like that. I was using a Cozy at the time, was bought by apartments.com, do all my rent collection online now, no more arguing back and forth with tenants. Hey, the check was in the mail. I don't have to pay the late fee. It either was or wasn't there on the online portal on the fourth. So those just little tips and tricks there have been incredible. Awesome. Well, thank you so much for Jefferson for being here. Congratulations on all your success and best of luck to you. We really appreciate your time. Thanks, Dave. Appreciate it. And thank you all so much for watching this episode of the Bigger Pockets podcast. We'll see y'all next time.