Brocker.Org: How a 30-something real estate investor who lives off passive income was able to move his family to Ecuador for a year

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Real estate investor Chad
Carson typically works just 3 to 5 hours a week managing his 90
rental properties.

Courtesy of Chad
Carson


It’s not uncommon to dream of escaping work for a while to
immerse yourself in the culture of a far-off country.

For Chad Carson, a 37-year-old who lives entirely off passive
rental income, that’s reality.

On a recent
episode of the Mad Fientist podcast
, Carson, who recently
moved to Ecuador with his wife and two young daughters, explained
how he was able to build wealth and create passive income after
starting with just $1,000 in savings after graduating college in
2003.

He used “house-hacking” and “live-and-flips”
to increase savings and maximize earnings
, and by 2007 he and
his business partner owned 50 rental properties. Save for a few
setbacks during the financial crisis, Carson continued growing
his portfolio over the past decade, and today he manages 90
rental properties, mostly in and around his hometown in Clemson,
South Carolina.

“Rental properties are wonderful for building wealth … [but]
they’re not going to produce a lot of income on the front-end —
at least not consistently — because you might make $200 a month
on a rental property, but then what happens if a year and a half
from now, the heating and the air system goes out on that rental
property? That’s a $4,000 to $5,000 hit,” Carson said. “And so
really, the rental property game, as opposed to flipping
properties, is all about generating big chunks of cash that you
can use to pay your bills, and hopefully, to save money.”

For his part, Carson was able to take the money he earned from
house-hacking and flipping and use it for down payments on rental
properties and to build up his nest egg.

Now after several years of hustling, Carson lives entirely off
rental income from his properties. With a little help from his
business partner and bookkeeper back home, Carson spends just
three to five hours in a typical week — the occasional “high
weeks” are more like 15 to 20 hours — managing his rental
portfolio, he said.

“In my mind, the game of rental properties is eventually getting
it free and clear of debt, so that you have a very low risk, high
income investment that allows you to go to Ecuador and do
whatever else you’re going to do with your life — leave your job
or have a little independence to do other things,” he said.

Before their move, Carson said they spent six months decluttering
their home and selling off old belongings to make it suitable for
renters.

“Part of our preparation to leave for Ecuador last year was to
get our primary residence rented out. We’re kind of up in the air
… we can move back into that house afterwards if it made sense.
But we’re also open to the fact that we can just own 100% of our
properties as investments, and then spend a lot of time just
renting properties,” Carson said.

But despite his success in real estate, Carson isn’t interested
in dipping into the market in Ecuador. “[T]here’s no way I want
to buy anything anywhere in a foreign country. I’m totally a
local investor. I like to look at it and understand the market. I
can’t understand enough here — the political system, everything
else — about buying. Some people do, but it’s just not my thing,”
he said.

Rather, the family’s motivation for spending a year living in a
foreign country came from a favorite book of Carson’s called
Vagabonding: An Uncommon Guide
to the Art of World Travel
.”

“It’s about long-term travel, but not travel in terms of just
like going and seeing some sights, and checking them off your
list and doing everything really fast. But more like in a really
slow, enriching way. You might not make it past one city or
another country. You just go to one place, and you’re really
going to soak it in and travel slowly,” Carson said, adding that
the family of four will hopefully leave Ecuador fluent in
Spanish.

Check out CoachCarson.com for more of
Carson’s tips creating passive income in real estate investing.

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