After decades of working full-time for a software company while building a 100-plus unit real estate portfolio on the side, one New Hampshire-based investor quit his job in early 2024 and is now retired at 46.
Matt, who goes by “The Lumberjack Landlord” for privacy reasons, purchased his first property in 2001 and has predominantly bought long-term rentals ever since.
With the newfound time, “I’ve thrown myself back into the real estate company,” the early retiree told Business Insider.
His most recent acquisition was a former jail that he plans to turn into housing for disabled veterans. According to a tax card viewed by Business Insider, he purchased the $205,000 property in September 2023.
The project, which he expects to be completed in September 2024, is part of his broader mission to give back to his community in New Hampshire, where he, his wife, and four kids reside. His strategy is to find undervalued properties and repurpose them to impact the lives of people in the area.
He doesn’t want to be “just another investor who buys another building,” he said. “I’m focusing on, what can we afford to give back — because I have to stay in business.”
That’s the major challenge.
Taking on a project like this one costs more, he said: “It costs me time and attorney fees and city fees, which are extremely expensive. In the end, is it easier to ‘vanilla the space’ and just make it so any retailer can use it? Yeah, that’s easy. But what if we could use that space to give two disabled vets their lives back?”
While Matt can afford to take on larger projects right now, he wasn’t always a seasoned, financially independent investor. He understands the importance of cash flow but is also convinced that investors at earlier stages in their careers can give back to their communities while also turning a profit.
“The key is getting investors to understand that they don’t have to wait until they have 100 units to do it. They can do it now,” he said. “It’s all just percentages: You don’t have to give out 90% of your units for affordable housing, but you can do one. You can do two, and that rising tide lifts all boats. That’s what makes the impact.”
How to give back as a real-estate investor at any level
As a landlord, you have control over who you rent to, emphasized Matt.
“Even if you’re buying that very first property, look at all your different avenues: Is there workforce housing available where you’re doing your purchase? Is Section 8 available or are they out of vouchers? Are there not-for-profits that will rent it? Are there businesses that are bringing in people from different places around the country and you have to be able to provide them adequate housing?”
If you own property near a college or university, can you rent to college students? In Matt’s area, for example, students are “paying 14,000 bucks to live on campus for eight months,” he said. “Well, with a high-density unit like a four-bedroom, two-bath unit, we can easily house those students and we can do it for a fraction of the cost.”
Renting to different types of tenants is smart from a risk standpoint, he added: “The thing that I would tell the new investor is, be diversified. The mistake that I made in ’07 that almost cost me my business was the fact that I rented to all construction people. In three months, I went from eight people paying their rent to three people paying their rent to one person paying their rent. Well, that doesn’t work for anybody, so be diversified.”
San Diego-based investor Kent He has similar mission-based goals but took a slightly different approach: He focused on producing the most cash flow at the beginning of his investing career by operating two Airbnb properties. When the cash flow from his short-term rentals was enough to cover his family’s expenses, he quit his day job to pursue his lofty goal of creating the largest affordable housing investment community in the US.
He purchased his first affordable housing unit — a single-family home in Fairfield, Alabama that he’ll rent on a long-term basis to a Section 8 tenant — in 2023.
It won’t cash flow as much as his Airbnb properties, he said, but it allows him to diversify his portfolio. Plus, he knows this rental income will be consistent, whereas short-term rental income can fluctuate.
As a Section 8 landlord, you can collect rent reliably, he explained: “Even if the Section 8 tenant loses their job, the government will come in and pay the rest of the rent. That is what I’m calling a recession-proof investment because the government will always pay their rent on time for your voucher holders.”
His long-term goal is to continue growing his Airbnb business, which he believes is the most effective way to produce cash flow and use the profits to fund 1,000 affordable housing units, specifically for social workers and EMTs.
Another strategy Matt started employing as he grew his portfolio and became more experienced was changing the makeup of a unit to make it more affordable. For example, “very often you can have this large spacious two-bedroom unit,” he said. “Well, you could turn it into a three-bedroom, and that may mean that a single mom with kids can actually afford it.”
Now, “she’s getting something under market. That’s a win. It doesn’t have to be a zero-sum game. It doesn’t have to be, somebody wins and somebody loses. Everybody can win in that situation.”
Government programs also offer funding for landlords who rent to Section 8 tenants or agree to keep the unit at fair market rent for a period of time, he said. For example, the LACDA’s Homeless Incentive Program (HIP) offers monetary incentives if landlords rent their available units to homeless applicants.
“If you’re not giving back it’s largely because you haven’t tried,” said Matt. “There’s an opportunity and a way to invest that can absolutely give back to your community and not necessarily have to cost you a fortune to do so.”
