When Tom Brickman, 39, bought his first rental home, it was 2004 and he was just 21 years old and making $8.50 per hour working at The Gap.
The property was a $90,000 two-unit home in Ohio, which public records confirm. He inherited a tenant in the downstairs unit, who was paying $600 a month in rent. Brickman lived in the upstairs unit himself, which allowed him to buy the property as a primary residence with just a 10% down payment at a 6.875% interest rate.
He didn’t have much to spare making only $8.50 an hour in retail, but he was enrolled in a stock purchase program with the Gap, which eventually led to him accumulating about $9,000 in equity. Brickman liquidated his Gap stocks and used it to make his down payment.
“The stars really aligned at that moment,” Brickman said. “That was one of the benefits of working with them.”
In the 18 years since then, Brickman has purchased 20 more rentals between Dallas, Texas and Toledo, Ohio. He talks about his real estate investing journey online under the moniker of The Frugal Gay, instructing other aspiring real estate investors as to how he built up his portfolio.
After working at The Gap, Brickman got a job at a movie theater, where he worked for almost 16 years before deciding to retire from 9-to-5 work this past January.
“I always try to stress that I had a very average salary while I was buying these homes,” Brickman said. “I started at $32,000 per year at the movie theater and right before I left my salary was in the high 70s. I never made above $100,000 a year from the theater, or anything like that.”
The reason why Brickman wanted to quit his job is that he felt that he had become so busy with other obligations in his life — like his real estate portfolio he’s building up and his side hustle of selling things on eBay — that he didn’t see how his 9-to-5 fit into his life anymore.
“I’m filling up my calendar with things that are important to me,” Brickman said. “I can go hang out with my grandma for a week in the middle of the summer during the busiest time at the movies, and I could never do that before.”
Brickman has said that some readers of his online content have pointed out to him that he’s not really “retired” if he’s still busy with his businesses and earning income from that, but he has said that more importantly, he’s “shifted my priorities to what matters.
“I don’t have a boss breathing down my neck, and the unnecessary drama that follows with it,” he added. “I’m not working nights and weekends at a movie theater.”
Being in the real estate space is something that Brickman actively enjoys.
“I like growing my wealth this way. I also have favorite tenants that I like,” Brickman said. “One of my cash tenants gives me vegetables from her garden every time I come for [rent] pickup. I like being in this space; I see the advantages of building wealth this way.”
Brickman said that as his portfolio grows, he is going to look into ways to give back in the future, including turning one of his properties into a hospice for LGBT seniors that have no place else to go at the end of their lives.
“It’s this really big old grand house,” Brickman said. “That’s been on my vision board for a while.”
One of the things that Brickman really stresses about his story is that his growth in real estate was sustainable, and that it took him 18 years to accumulate the 21 properties that he currently has.
He said that he knows that there are other investors out there who were able to build much larger portfolios at a much quicker rate, but that he prefers to keep his liabilities low and invests in “fixer upper” properties that he sees long-term potential in.
That said, several of his property purchases were just made within the last year, and as of the time of publishing this story, Brickman is currently collecting rents from 17 properties.
According to documents reviewed by Insider, he makes about $15,700 per month in rents and averages about $7,400 in profit per month — excluding earnings from one property which is a short-term rental listed on Airbnb and has a more seasonal gross revenue.
There are four things he shared with Insider that he said helped him get to the position that he is in today.
Brickman’s introduction to real estate came from learning the trade from his father, who owned one rental property when Brickman was growing up in Ohio.
“I used to go over there and collect rent with him,” Brickman said. “We would also go over there on weekends and paint together. But he didn’t have a huge portfolio at the time.”
Brickman’s father was the one who encouraged him to buy his first property with his Gap stock when he was just 21 years old.
“I just did not want to keep paying rent at the time,” Brickman said. “It was 2004, and I was paying between $400 and $600 a month at the time.”
His dad convinced him that he should buy a duplex in order to house himself and use the rent from the other unit in order to pay for the mortgage.
Brickman’s grandmother is also a realtor and used to accompany him when he was looking at new properties to buy as well.
Brickman almost exclusively focuses on fixer uppers, and said that he hates buying “move-in ready” places.
“I really like transforming [my properties],” Brickman said, adding that his “hardest project” was the former home of a hoarder.
“It was also my most successful project,” Brickman said. “It’s a 4-bedroom, 2-bathroom home right outside of Dallas, and it was hoarded to the ceiling.”
According to Brickman, the project required 11 dumpsters to empty the house, and that it took him 6 months in total between buying the property and getting a tenant moved in.
“It was exhausting, but it was also very exciting,” Brickman said. In addition to helping him feel fulfilled, this also helps Brickman save a lot of money.
“I was buying a lot of stuff that other investors were ignoring — I started with the ugly condos,” Brickman said, referring to some purchases he made in Texas about 12 years ago. “I bought one condo for $14,000 cash. The cheapest was $9,000.”
While it’s normally unheard of for a condo to be worth $9,000, Brickman said that the property was a foreclosure that he paid for in cash.
“I don’t think I’d ever do that again,” Brickman said. “But it was a wild experience.”
After Brickman fixes up the properties, he can rent them out for a lot more than their original value.
Especially because he focuses so much on repairing fixer uppers, Brickman said that it’s really important to have a team of people that you can rely on in order to continue growing his real estate portfolio.
In Brickman’s case, he relies on having the help of plumbers and electricians when it comes to fixing up his properties.
“Having a network of people that you know are going to be able to do the work for you and not disappear with your money is huge,” Brickman said, adding that this is why he won’t buy properties in locales that he doesn’t have connections in. “I need to have some systems set up.”
In addition to contractors, Brickman also said that it’s important to have really good relationships with realtors.
“I’m not realtor-loyal in either Ohio or Texas, but I have a couple of really good ones,” Brickman said, adding that the realtors he has relationships with will often call him personally and ask him if he wants to see certain properties before they’re placed on the market.
When it comes to being a real estate investor, Brickman also said that it’s really important to have financial systems set up and that he greatly prefers using a credit union over going to a big bank.
“I’ve formed good relationships in both states with credit unions and find them to be so much easier to work with,” Brickman said, adding that these credit unions often save his documents so he doesn’t have to re-upload everything during each instance in which he is trying to buy a new property.
Brickman also said that at credit unions, you’re more likely to form an actual relationship with the creditor, and that the process of applying for new places can be a little easier than going to a big bank where there is less attention paid to individual applicants and buyers. A local lender may be more likely to pick up the phone and return calls in a timely manner versus national-level lenders and mortgage originators.
The importance of having a good relationship with your creditors was made clear to Brickman after he attempted to buy his fourth property in 2009 right after the housing market had crashed during the Great Recession.
“I’ll never forget an underwriter asking me why I spent $59 at the 99-cent store,” Brickman said. “When I went through the process in 2004 and 2005, it was like: ‘Sign this piece of paper, here’s your keys, enjoy!’ — and then in 2009 it was so different.”
He also makes sure not to over-leverage himself. Brickman has built his portfolio up slowly over the last 18 years, and according to documents reviewed by Insider, he currently has much more in assets than he does in liabilities.
“I actually only have two mortgages on all my 21 doors,” Brickman said. “I remember at the beginning of COVID, I had those two mortgages and was like: ‘Okay, if I collect rent from three people, I’ll be okay.’ I know that I grow slower than a lot of other investors, but that’s where my comfort level has been.”
Keep reading
For you
About Author
