20-year-old college dropouts explain how they built a 28-unit real estate portfolio with less than $1,000 in savings combined
Chuck Sotelo and Caleb Hommel started investing in real estate in their teens.This story is available exclusively to Insider subscribers.Caleb Hommel and Chuck Sotelo didn't have any savings when they decided to invest in real estate.
They didn't have any savings — except a couple hundred dollars each — nor did they have any experience, so they started going to local real-estate investing meet-up groups to get some direction. It was at one of those events that someone referred them to a mentorship program calledThe program cost about $250 a month at the time, a lot of money for them to shell out as students, but they figured it would be a worthwhile investment.
They young investors have learned that,"the deal always comes first," explained Hommel."Once we found a deal, then we would worry about raising the money." The main reason they wanted to buy a property that was already occupied by tenants was because they wanted positive cash flow from day one. Specifically, they wanted a 10% cash-on-cash return, explained Sotelo:"And if it's not filled [with tenants], it's most likely not going to be hitting that 10% cash-on-cash metric."
They started looking for the money once they were under contract and figured they had about 60 days to come up with the cash. They reached out to friends, family, and other San Diego-based real estate investors and ended up raising it in half that time, they said.
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