A Software Engineer Who Invests in Real Estate

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Young Money

Tina is a software engineer in Seattle, WA. Graduating from college with a combination of a Masters Degree in Computer Science, she was able to land a mid-level position with some negotiating. While she felt some imposter syndrome at first, she now feels she is more than qualified for her position.

The ability to be financially independent motivates her. From her parent’s influence, she hopes to create intergenerational wealth for her future children. To achieve that, she’s taken upon real estate investing and hopes to have 30 properties by the time she's 30 (she’s 24 now!).

*Name is altered to protect identity.

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Interview with Tina:

How have you changed from when you were first hired to now?

I'm a mid-level software engineer in Seattle, WA. I'm 24 years old and this is my first job out of college. I was able to land a mid-level position immediately after graduation due to a combination of a Masters degree in Computer Science and negotiating. When I first got hired, my starting salary was $128.5k, signing bonus of $20k, and $140k in RSUs vested over 4 years. I currently make $137k and my last bonus was $18k in cash and $13k in stocks. I'm really grateful that I'm in a field that I enjoy, that I am good at, and that provides me an opportunity to make an impact in the world. I definitely had imposter syndrome when I first started out because I was coming in at a different level than my peers. I thought I was just lucky. However, since coming on full time and having a different manager from the one who hired me still praise me, I now fully believe that I am more than qualified for my position.

You managed to negotiate your first job’s starting salary and title. How did you manage that?

I had two job offers for my first job out of college, both from places I’ve previously interned before. The first offer was from a smaller company and I was able to negotiate a title change after finding out I was offered the same position as someone with less experience. This first offer ended up being $115k for a mid-level software engineering title. I leveraged this offer to negotiate with the second employer.

The second employer’s initial offer was $116k for an entry level position, also in a HCOL area. The salaries were too close for me to decide, so I asked if it would be possible to increase to $120k. Being a large company, they had very specific salary bands for each position so they could not increase my salary. I pushed back and said that the other offer was more attractive because of the mid-level title. Instead of giving me a raise, they gave me a promotion to mid-level engineer, allowing them to offer a higher salary of $128.5k.

How did you learn these negotiation skills?

I'm the first child of immigrant parents from Southeast Asia. My dad has worked my whole life as a cable technician and my mom worked on and off, taking breaks to take care of me and my two younger brothers. Despite our family having only one steady income, we were very comfortable. My parents were conservative with their money; they always paid for our cars in cash and never had credit card debt. The words "interest" and "fees" were dirty words in our household and it was commonplace for my mom to call and dispute charges. My parents are also great negotiators. I remember when I was young, I was embarrassed at how long my parents took to decide on large purchases. I wished they didn't have to bargain with the poor salesperson for hours, going back and forth between different locations to get the best deal. I now see the value in that and wish I had their tenacity! They’ve also always expected me and my siblings to surpass them in education and wealth, and they’ve laid the groundwork for us to do so. I want my future children to pick up where I left off and create that intergenerational wealth.

Do you have any tips for people who want to negotiate their salaries?

  1. Always have multiple offers and be willing to walk away. I knew I would have been happy at either place and they were both good offers.
  2. You don’t always have to use a competing offer’s salary to negotiate. Consider using title, location, bonuses, or even benefits.
  3. Be truthful, but do not reveal all of your cards. When the second company asked me what the first company was offering, I simply said that they were similar. If I had revealed it was actually $1k less, then I doubt I would have been able to negotiate further.
  4. Maintain a good relationship with your team. I wouldn’t have been able to get a promotion before even starting the job if I hadn’t done a great job during my internship and built a positive relationship with my manager, who ended up vouching for me.
  5. Of course, always be grateful. You are not entitled to a specific job or salary. Negotiate, but back it up with facts

What do you want to do with your money?

I have so many passions outside of work that I struggle to find time for all of them. I know I am in an extremely privileged position because I was able to graduate with no student loans thanks to my parents. I also have a high paying job that contributes to my 401(k). However, what is most important to me is that I need to feel that my work means something and will make an impact, and sometimes that can’t be found in my regular day job. When I’m financially independent, I’d like to volunteer my tech skills for good and continue educating others about personal finance. Most importantly, I’d like to spend as much time with my family as possible without worrying about work.

How will you reach financial independence?

Aside from my regular retirement investing through a Roth IRA and 401(k), I’d like to build up monthly cash flow with rental properties. I’ve grown up loving real estate because my parents were always remodeling our home, so houses have always excited me. I currently have one rental property out of state that I bought in cash using vested stocks. My plan is to rehab it and refinance it to recover my money as quickly as possible. I hope to have 30 units by the time I’m 30 years old (it just sounds cool). For me to be comfortable leaving my job, I’d need 20 units cash flowing at $500 a month.

I’ve also explored more active side hustles such as financial coaching, but ultimately, I prefer the more passive income that comes from rentals.

How did you get into real estate investing?

I joined a real estate investing club at work where we had monthly meetups to learn from each other's experiences. This really catapulted my real estate investing journey because I saw that there were people in my exact position who were doing it, so I had no excuses not to try myself. In terms of finding a mentor, there is no substitute for meeting up with real estate investors in your area for support, guidance, and accountability.

Since you chose to invest in rental property, how do you view real estate vs. more liquid investments like stocks and bonds?
  1. You can really make use of leverage (i.e. debt) to accelerate your investing. This is not necessarily the case with stocks - I can't get a loan to buy stocks and only put 20% down. 
  2. I have a lot more control over the results - I can choose the market, the tenants, the type of rehab to perform, and all of this directly contributes to my return on investment. Stocks are a lot more passive and are at the mercy of a lot of other variables I have no control over. Also, I've been thinking a lot about the ethics of investing in companies that use slave and prison labor. I plan to be a socially responsible rental property owner who provides clean, safe, and affordable housing for her tenants. 
  3. The cash flow from a rental property is leagues beyond the cash flow from stocks and bonds. As an example, my current investment property will be bringing in $400/month in cash flow (this is after mortgage, interest, property management, taxes, AND saving for repairs) on an initial investment of $54k (purchase price + rehab). After doing a cash-out refinance, I will break even and the property would cost me $0. That is the beauty of the BRRRR strategy, and this isn't even a best case scenario! 

Very often, people will actually get back more money than they put in when they do a cash-out refinance and they also get to collect the rent every single month. You would be hard-pressed to find a stock that pays you $400/month with a $54k investment. Of course, there is a lot more upfront work with real estate investing. Still, I prefer it because it gives me the cash flow to live my life now, rather than waiting until I'm at retirement age or investing hundreds of thousands of dollars just to get a few hundred dollars in dividends a month. I'm willing to do this because I enjoy real estate - you shouldn't jump into it if you have no interest, because it will be a much more emotional ride than just investing in index funds. There are many ways to financial freedom!

What was your first exposure to real estate investing?

My very first exposure to real estate investing was through the podcast Afford Anything by Paula Pant. She doesn't talk about it exclusively on her podcast, but she did give me a very good introduction to how real estate investing can bring you closer to financial independence. 

Next up was the Bigger Pockets podcast which is exclusively real estate investing, and that's where I learned about the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat). At first, I had no idea what any of the guests were talking about, but as I listened to more episodes, the strategies became more familiar. A recurring theme in each of the episodes is that the #1 thing that separates successful real estate investors from those who are not is not trying at all or giving up too early. That really resonates with me, which is why I jump headfirst and take mistakes as learning opportunities.

Do you recommend any books for real estate investing?

For more diversity on how to invest in real estate, I also highly recommend the book "Investing in Rental Properties for Beginners" by Lisa Phillips. It discusses how to buy more affordable properties at lower price points ($30-$40k) and makes real estate a lot more accessible to those who are not making six figures a year and don't have a lot of disposable income.

Another book that I really enjoyed was One Rental at a Time by Michael Zuber. While reading it, it felt like I was listening to a mentor who was talking through his entire real estate journey and going through the numbers on his properties. It also taught me that a portfolio of 150+ properties begins with one rental at a time.


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