hey guys it's Brian with retired at 40 it's been a crazy last month between
the Covid 19 coronavirus pandemic and we're about two weeks from listing our
house because we're retiring also my channel hit fifty thousand subscribers
and four million total views which I never thought was even possible I wasn't
really ever trying to make a thing of this YouTube thing when I started doing
it three years ago but big shout out to all of you who helped me achieve that
I'm also sitting in a moving truck with 80 to 90% of my my life belongings that
I have acquired through life because I'm getting ready to move two states away so
I figured now is as good a time as any to give you an update on the retired at
40 story and one of the biggest steps that we were able to do to achieve
retiring at the age of 40 was making $400,000 tax-free and I'm gonna show you
how you can make $400,000 tax-free as long as you're an American citizen you
live in America anyone can do it so if you haven't figured it out today today
we're talking about real estate there's no other way to make that much money
tax-free besides real estate so I'm gonna give you our story and how we did
it and just given the way things are going lately we might hit another mini
recession or maybe a full-blown recession and you might have a chance to
do it again so let me give you a little background on this house right here
we've lived here for about 13 years when we bought it it was 2008 and the market
was absolutely terrible so terrible in fact with this house sat on the market
for about six months and we put in several offers on it we went back and
forth with the bank quite a bit their asking price was 350 at the time which
sound sounded pretty outrageous but we ended up getting it after going back and
forth going back and forth we ended up getting four three hundred and twelve
thousand dollars
the house was built in 1978 and it needed a lot of work it was completely
overgrown
completely stripped the inside because it was so disgusting
which ended up being a huge positive for us because we had a blank slate we could
just go in and do what we wanted it's sits on just over 2 acres and it's
really close into town so you get the the country feeling but we're in the
city still which is great it's real hard to come by that those types of
properties now so that was 2008 fast forward to we've probably spent
about sixty to seventy thousand dollars on this house which sounds like a whole
bunch of money but the the scale of what we have done to this house it's actually
pretty inexpensive that's sixty to seventy thousand dollars in materials
and then my labor was of course free and then we did have to hire some
subcontractors for things that I can't legally do like electrical plumbing the
panel things like that on the plus side we got this house for a
great deal even at the time when the economy was terrible the market was
completely crap people in Denver area were not willing to spend $350,000
especially for a house that needed everything and when I say this needed
everything I mean it needed everything every single part of this house at least
one time the kitchen we redid all the bathrooms
we redid the roof the windows all the floors put in an air conditioner we put
in a furnace we put in a water heater we poured a patio in the back there was no
landscaping to speak of and we put all the landscaping in the driveway was
gravel when we moved in we put an asphalt driveway in I could go on and on
even with the three hundred and twelve thousand dollar purchase price back in
2008 even with the sixty to seventy thousand dollars in materials and even
with paying subcontractors the estimated value of this house when it's all said
and done is about seven hundred and seventy five thousand dollars
so what in the heck makes this thing worth seven hundred and seventy five
thousand dollars well first off the Denver market has just completely
exploded in the last five years and stuff has just gone through the roof for
values the second reason this house is valued at what it is is that it's a very
unique property being that it's country feeling on an acreage but it's very
close to the city and suburbia number three is this was built in the late 70s
and most houses that were built back then are very chopped up they're very
almost unusable without doing a whole bunch of work and between what we have
done in this house and the way that it was laid out you would never know that
this house is as old as it is the other thing that makes this house so valuable
is it has pretty incredible outdoor space over my shoulder is about an 1,800
acre lot that is completely undeveloped it also
has unobstructed views to downtown and unobstructed views of the mountains all
along the Front Range
the reason why we're doing the floors in this house it's kind of the last piece
of the puzzle to this house and as the clock is ticking and we're getting
closer to listing this house in order to retire and move this is kind of our last
hurdle and we want to be able to get the maximum amount of money out of this
house and this house is so unique because of
where it is and the type of property that it is that certain little tweaks
here and there could really boost our value so I've been pulling loads and
loads and loads of tile out of here it's probably going to be it's probably end
up being four or five tons of tile so the house is an extremely huge mess
right now because basically like 75% of this house is tile let me show you how
much tile is in this house entryway is tile kitchen is all tile dining room
I've already ripped out it was tile as well that's all coming out laminate it's
coming out bathroom is all tile so it was the shower my wife didn't know I was
tearing this out today she'll probably get over it when she sees there's a new
pretty shower in here though if you're ever curious how strong your marriage is
tear apart about 75% of your house and start remodeling and then rip apart your
wife's bathroom this lower living room is all laminate and I just put this in
like three years ago guess what it's coming out started the laundry room it's
coming out as well let's see what's downstairs you guessed it tile so if I
had to guess I would say there's probably about 2,300 square feet of tile
and laminate that need to come out the tile I can't salvage and use somewhere
else but the laminate I will actually use in one of our rentals
so I'm getting ready to tear this tile out in the entryway and I'm trying to
teach the kids the value of a dollar and the harder you work the more money you
can make so I told them for each tile that they carry out to the dumpster that
would give them five cents and possibly array is at the end of the day so we're
gonna see how long they can do this for
I changed it to ten cents because I feel bad for them. They're working really hard
all right well I got the kitchen torn out the entry is torn out the dining
room has torn out so the last thing that needs to happen is the laundry room and
then I just need to clean up the basement floor and all the demo is done
and it seems like it has been forever it's taken me about three and a half
days so far so just to kind of recap we bought the house for three hundred
twelve thousand dollars we paid seventy thousand dollars in labor materials
subcontractors all the stuff to get this house up to the place it's at right now
so we're also gonna have about twenty one thousand dollars in realtor fees and
the reason why it's only twenty one thousand is because my wife is a
realtor so normally it would be twice that so in Colorado it's two point eight
percent of the sales price for each side the buyers the buyer's agent and the
selling agent and then we'll have a small probably around $1,500 title fee
for title insurance so that brings us to three hundred and seventy thousand five
hundred dollars just pretty pretty close to four hundred thousand I mean no one
wants to watch a video that says how to make three hundred seventy thousand five
hundred dollars we'll go with four hundred okay so you've got three hundred
and seventy thousand five hundred dollars now you've just opened yourself
up to this massive capital gains tax right no in America if you own a home
for two years or more or you've lived in home for two out of the last five years
so if you have a rental that you've run it for three years but you but you've
also lived in it for two years your capital gains are basically just wiped
out completely tax-free and that includes profits that you've made on a
home up to a huge amount and for most of us you're never gonna make that much
profit on a house unless you bought a house in California like in 1950 or
something so our house is free and clear and it's
been free and clear for a while because we've always taken our profits and we've
put it back into our real estate which most of our profits have always been
from real estate so we just roll the profits into the next property which is
which has definitely allowed us to retire at 40 so the next question is
what are we gonna do with that money well we're buying in another house so
we've already agreed to a purchase price in a house that we're moving into the
price on the new house will be 425 thousand so what are we gonna do with
the extra money well in order to find that out you're gonna have to stick
around for some more retired at forty vlogs in the meantime this is retired at
40 remember to live life simple we'll catch you next week