From a $200K Duplex to Replacing His 6-Figure Salary with Rental Properties

Henry Washington (0:00)

Real estate is not a get-rich-quick kind of game, but it is a get-rich-for-sure game. Keep at it, and it will eventually make you wealthy. Most investors get out too early, usually right before the big payoff. For 15 years, investor Philip Henry felt like he was treading water. He was doing all the right things, buying multifamily property every year, renovating the units, raising the ramps, and then rolling his equity into the next deal. On paper, he was building wealth, but it was not showing up in his bank account. The stress was mounting, and the workload was taking a toll on his health, and his relationships were suffering. But that's exactly when the breakthrough came. A real estate deal that would single-handedly change his life. Philip bought it with none of his own money, and then he created enough value and cash flow to replace his six-figure salary. Today, he's going to pull back the curtain on that deal and the strategies behind it, plus the patience and persistence it takes to win in real estate.

What's going on, everybody? I'm Henry Washington, co-host of the BiggerPockets Podcast. And today, we're bringing you an investor story with Philip Henry. So let's bring him on.

Mr. Philip Henry, welcome to the BiggerPockets Podcast.

Philip Henry (1:13)

Well, thank you so much, Henry. Appreciate it. Appreciate you having me on.

Henry Washington (1:16)

Why don't you go ahead and give us a little background. What got you into real estate investing in the first? What were you doing before that?

Philip Henry (1:22)

Wow. Well, originally from Canada, I went to chemical engineering and then moved to the US in 2001 with my wife. And at the time, we had a new baby and started doing engineering work in Boston. And then just started reading books about real estate. You drive by a golf course, it's like noon on a Wednesday and someone's in there with a nice car and golfing. And my dad always was working at that time. So I was like, something's different about what they're doing versus what my dad did. So anyway, that's how it started. And I bought a two unit. That was how I got off the ground.

Henry Washington (1:57)

How long ago was that?

Philip Henry (1:58)

That was in 2003, I think.

Henry Washington (2:01)

Oh, man. So you got a long investing history.

Philip Henry (2:05)

Yes.

Henry Washington (2:05)

I know it was a while ago, but it was your first rodeo in the real estate game. So why don't you tell us a little bit about that deal? What did you buy? How did it go? And then how did that propel your investing career?

Philip Henry (2:15)

So a lot of the new engineers, new families started, I would get a single family home in Boston, and then their mortgage pour and I just, I was broke. I had no money, started out salary with like 40 grand or something like that. And $200,000 price point, two unit, we bought it. I think it was an FHA.

I would come home from engineering school, go up into the second unit, San Flores Paint, rented that out for 800 bucks. So my costs went from 900 in an apartment to 450 and I owned the place. And then a year later, I sold it and left the closing table with a check and it said like 50 grand on it. Yeah. I was like, I paid off my student loans and that's when I was hooked. I was like, there's no way I just made a year salary by living in a house.

Henry Washington (3:05)

So you did house hacking before it was cool, before it was a fancy name for it.

Philip Henry (3:10)

You got it.

Henry Washington (3:11)

How did that change or shape what you ended up doing next?

Philip Henry (3:16)

Well, I think the first thing is it increased my belief. So like my belief that I actually could be a real estate investor. That was huge for me. And then I got transferred up to Bangor and I bought a four unit right out of the gate. Same way, FHA, three and a half percent down.

The seller carried closing costs, so I had very little in it.

And I started with that. That was my next acquisition. Okay.

Henry Washington (3:40)

So you house hacked that one as well. The first one, it sounded like you had some renovation to do. You were doing some of the sweat equity. Were you doing the same thing on the next one or was it more of a turnkey deal?

Philip Henry (3:49)

It was a little bit more ready to go, but it still needed a fair amount of love. So it was like you come home from the end of the day, pick up some supplies and grab your hockey buddy and tell them there's a six pack waiting for them and off I went.