- Hal Sousa bought his first property at the age of 23.
- He earned minimum wage but saved most of his income to buy property.
- The more rental housing he bought, the more his cash flow grew, which helped him scale faster.
At 32, Hal Sousa already owns 66 rental units.
He bought his first property at the age of 23. Today he continues to develop his portfolio and has also become a real estate agent helping others to do the same. Property records seen by Insider confirmed the size of its portfolio.
His path was neither planned nor laid out. In fact, he told Insider it was a pretty funny accident. He immigrated from Brazil to the United States at the age of 19 and started out as a laborer on a dairy farm. Sousa said he didn’t know a word of English at first.
“I didn’t have any friends. I didn’t go to school here. So I was just working. I took extra hours whenever I could. I actually worked on Sundays, which was my day off, for $ 50 because I just wanted to earn the $ 50, ”Sousa said.
He was a big saver and says he chose to live with his mother and stepfather to cut down on his expenses. At first, his main motivation was to raise enough money to buy a brand new car.
But when he drove to the dealership, Sousa said the manager saw he had $ 35,000 ready to be dropped off on a Chevy Camaro and asked if he had ever considered investing in the car. ‘immovable.
“That year, in 2009, I didn’t hear what this lady said,” Sousa said. “Like it’s literally passed over my head and I’m just pointing at the shiny car I’m buying.”
But a few years later, he had again saved a good amount of money and remembered the manager’s suggestion. So he decided to start searching the websites for properties available in his area. It was then that he realized that the same amount he had put in for a new car, he could have used it for a down payment on a house – one that he could rent.
After using online tools to calculate the amount of monthly mortgage payments on various homes and comparing them to rental rates, he realized there was the potential for profit.
“Here I am, working a whole week to make $ 400, but then I could buy a property and make $ 400 sleeping,” Sousa said.
The first property
He bought his first investment property in 2012 in Visalia, California. He used Zillow for research and then hired a real estate agent to finalize the deal.
His first goal was to focus on a decent part of town and then find properties within his budget. Then it was about choosing the property that had the potential to generate net profits once the expenses were paid. Sousa adds that when he started the prices were much more affordable than today.
Since he had no debt or bad credit, it was easy for him to get approval for his first mortgage. The property also does not need any improvements. All he had to do was find a tenant.
The process was not difficult, and once the money poured in, a light bulb lit in his head and he realized that he could keep saving money and repeating the same process.
Sousa says he continued to work on the dairy farm, but also took other side jobs in restaurants, taking vacation shifts and even mowing lawns. He also hasn’t moved from his parents’ house, a perk he admits has saved him 85-90% of his income.
“I didn’t do anything special. I wasn’t making a lot of money,” Sousa said. “A lot of people who start investing in real estate, they start after getting this big job. I started when I was a minimum wage worker.”
Between his jobs, the cash from his new property, and his savings strategy, he was able to buy his second property in a year.
The second property was a foreclosure, which meant it was below market value. This time the house needed some cosmetic upgrades, such as carpeting. He cut costs by doing some of the work himself.
Getting her second mortgage wasn’t difficult either, as her debt-to-income ratio remained positive. And the first mortgage didn’t weigh it down since it was about cash flow.
Develop your portfolio
At first, Sousa relied on her own judgment and didn’t have much coaching or advice. But by the time he bought the second property, he had established a relationship with his loan officer, who recommended a third property to him.
Although he was in distress, it only cost $ 67,000, an amount he could cover with cash. By the third purchase, Sousa had replaced his salary with his investments. Nonetheless, he told Insider that he continues to work. The only difference now was that the extra cash flow meant he was saving a lot faster.
“At three, I’m addicted to this. I want more because I don’t want to have to work,” Sousa said. “My goal was to work, save and invest.”
As his cash flow began to increase, he set a goal to purchase one or two properties per year.
Eventually Sousa got her real estate license and started helping others to do the same. His career change also drastically increased his income and for the first time he started making six figures.
As his real estate portfolio grew, Sousa’s knowledge in the field also increased. He was finally able to set up a partnership in a business where he could flip homes and lower his taxes.
Today, 47 of the 66 properties are owned by him, while the rest are co-owned with a partner.