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How We Made $400,000 In Real Estate Profits on Our Financial Independence Journey

Let’s talk real estate investing! But, not just any real estate investing. Let’s talk about how Amon and I turned a $20,000 investment into $400,000!


If you’ve been following our journey then you probably know that investing in real estate has been a big part of our lives. It was an important contributor to our overall investments and our F.I.R.E plan. And it took a lot of creativity on our part. Let’s face it - It’s not everyday that someone can turn a $20,000 real estate investment into $400,000.

With that said, it’s also not as hard as it sounds.


So, in this article, I’m going to take you through all of the steps Amon and I took with our properties to make huge profits. Hopefully, you’ll be able to use some of this information to find your own real estate success.

Step 1: Buy An Owner-Occupied Fixer-Upper

When we first started looking for properties in the San Francisco Bay Area, we focused on run-down properties located in great neighborhoods. We also looked at owner-occupied properties because that allowed us to apply for an FHA loan (meaning we could put down a smaller down payment).

After months of (what seemed like) fruitless searching, we finally found it: A three-bedroom, two-bathroom home that could use a little love. Sure enough, we got the FHA loan and put down 3.5% of the purchase price as a down payment. The asking price was $460,000, and we put down $20,000. Our monthly mortgage came to roughly $2,500 a month, which included the principal on our mortgage, interest, tax, and insurance.

Step 2: Living, Fixing, and Adding Value

The house needed some repairs, so we decided to spend the first three weeks of ownership fixing up the house with all of the spare time we had before we actually moved in. Amon even took those three weeks off from work to renovate the house.

But, before we decided to renovate the home ourselves, we got estimates for certain renovation projects that we wanted done. We found that most of the renovation quotes we got from contractors involved an incredible amount of money simply in labor. Our solution: We renovated the home ourselves, pocketed that labor money, and increased the value of the home through our own sweat equity!

So, the first three weeks after we closed on the house were crucial because we spent a lot of time simply focused on some of those bigger renovation projects in the home. But even after those first three weeks, we still spent that first year renovating the property. It was the first large-scale renovation project we had ever taken on, and it took around $10,000 in that first year for us to demolish the kitchen, design and refurbish a new kitchen layout, add a full bathroom, install new flooring, add crown molding and baseboards, repaint the interior, and fix up the outside of the property. All of that work went into making our new home more valuable for the eventual resell.


Step 3: Refinance

After we completed our renovation, because we purchased a fixer-upper and fixed up the property ourselves, the house had jumped in value because of our own sweat equity. This presented the perfect opportunity for us to refinance the property and take out that sweat equity to purchase another investment property (more on that shortly!).

So we focused on the refinance piece. We knew that all of our work was going to bring the house to the same level as other properties on our street. And sure enough, when we got the home appraised after we renovated the home and during the refinancing process, the property was appraised at $600,000. Minus the $10,00 we had invested in fixing the place, we had made $140,000 of pure profit in less than a year.

But refinancing wasn’t the end of the story! We wanted to use the equity to purchase a new property and extend our real estate portfolio. This brings us to step four. . .


Step 4: Fix, Increase, and Rent Out . . . the Next Property

By refinancing our first property, we were able to take the equity from the first home to use it for a downpayment on a second home: A studio for $245,000.

Although the studio didn’t need nearly as much work as the first property, there were still a few things we wanted to do to increase its value, such as installing a new stove and ceiling fan and doing minor bathroom work. Here are the numbers:

  • Studio Purchase Price: $245,000

  • Down Payment: $45,000

  • Renovation Costs: $2,000

  • Mortgage Payment: $1,500 per month

We were lucky enough to purchase a studio in a very desirable location, so we were able to rent the studio out for $1,950 a month - giving us a positive cash flow each month (minus the mortgage, taxes, and HOA).

As a side note, when we were projecting our profits from renting out the studio, we factored in maintenance costs for the studio. Fortunately, we had no maintenance costs the entire time we held the property. We got lucky. But, if you’re looking to purchase a property, you should always factor in maintenance costs when you’re thinking about your bottom line.

Step 5: Buy Another Property

After we purchased the studio, we thought, “Why stop now?!”

So we decided to keep investing. Rather than refinance our studio and take the money from there, we took the additional money from our first property, our primary residence, and used it to purchase a two-bedroom condo.

This two-bedroom had been on the market for a long time. The owner hadn’t put much effort into making the place look nice to potential buyers, so many people were turned off from purchasing it. We knew straight away that it was a great opportunity. We saw beyond the clutter and outdated furnishings and we knew that once we bought the condo, we could fix it up and make it look as good as new. So that’s what we did!


We bought it for $360,000, paying $80,000 upfront and $5,000 in additional materials to renovate the place. After doing a fairly large rehaul of the interior, it looked amazing.

And that’s when we had another idea: Why not move into the condo, and rent out our newly renovated three-bedroom house? Our home could be rented for significantly more than the condo, so all we had to do was downsize our lives a little and we’d be saving a lot of money. Not only that, but we’d be making a lot of money, too!

Once we were able to list the house on Airbnb and VRBO, we averaged about $7,000 a month in rental income. Subtracting the $2,500 monthly payments on the house, we were cash flowing about $3500 a month - and, again, that’s after we used the rental income to pay our monthly mortgage!


After that, we knew we wanted to set up another AirBnB operation, so we decided to move into a rental ourselves, and rent our condo out. At the same time, the new property we rented had a granny flat in the back, and we were given permission from the owner to list the granny flat on Airbnb. So we had money coming in left and right! Not only were we living rent and mortgage-free, but we were generating huge profits in real estate rentals.

Let’s break down the numbers so you get a better idea:

For the 2-bedroom condo, the mortgage with HOA and maintenance costs equaled $2,000 a month. We were able to rent it out for $2,850 a month, making an extra $850.

This means that with all three properties, we were bringing in around $5800 a month - and that’s after we used the rental income to first pay the monthly mortgages! The numbers were fantastic, and even though Airbnb just isn’t sustainable in the long term (managing an Airbnb is a labor-intensive process), we waited for long enough that we were finally able to sell our real estate for a solid profit.

The house eventually sold for $700,000, so we made $240,000 on that property. We later sold the two-bedroom condo for a profit of $90,000 and finally sold the studio for $70,000 more than the purchase price.

So if you look at the initial $20,000 investment we made into buying our first property, we were able to make more than $400,000 in pure profit. I know that we lucked out by buying and selling in a strong property market, but I really do believe that our investment strategy played a big part in our success. Hopefully, you can take some of these ideas and apply them to your own real estate investment strategy!


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Hello, We’re Amon & Christina

We’re former federal government employees that focused on saving, making, and investing money so that we could grow enough wealth in our investments to never have to work again.

And, guess what? We did it! At the age of 39, we reached financial independence, quit our jobs, and . . . we retired!

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