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Investing for cash flow: How Clint Galliano plans to retire through real estate

Stessa Investor Profile - How to retire using real estate as a vehicle
by Brad Cartier, posted in Investor Stories

Real estate investor Clint Galliano and his wife currently own 3 single-family rental houses in Louisiana. Clint works full time in the oil and gas industry but is tired of the ups and downs in the business caused by the changing price of oil.

A few years ago, he realized that of all the other career options he’d investigated, investing in real estate held the most promise for replacing his income.

1. Tell us about your real estate background – why you started investing in real estate, how long you’ve been doing it, and how it fits your lifestyle.

Answer: When I was a kid, my grandparents owned a few rental houses and a couple of commercial buildings. I grew up around real estate, and always liked the idea of monthly rental income. But it wasn’t until a few years ago that my wife and I got serious about investing in real estate. And when we did, it was almost by accident.

My wife didn’t want to sell the home she grew up in, so we turned it into a rental property. That was our first experience as real estate investors, and we probably made every mistake in the book. From choosing scam contractors and renting to bad tenants, you name it we did it. But we quickly learned how to find good people, and at the end of the day everything turned out fine.

Around the same time, we were getting tired of the fluctuations in the oil and gas industry, which impacts my day job. I spent a lot of time looking at other job options before I realized that the best choice was staring us right in the face. We decided that investing in rental real estate would be the best way to replace normal W-2 income. It also offers the perfect exit strategy when you’re ready to retire.

For about a year, I learned everything I could about real estate investing. I read books, listened to podcasts, went to real estate investing forums, and attended our local REIA meetings.

When the time was right, we purchased our second single-family rental home. We’re now very systematic in our approach, so managing the rentals takes very little time while providing great cash flow. I still have my full time job, but by scaling up our rental property portfolio we’ll have the safety net in place so I can stop working when we’re ready.

2. What does your real estate portfolio consist of today?

Answer: Our real estate investment portfolio is made up of three single-family rentals with an average market value of $125,000.

Investing for cash flow: How Clint Galliano plans to retire through real estate

3. What’s your investment strategy?

Answer: We like properties with “good bones”. Louisiana can get hot and humid, so houses built with wooden floor joists and beams can rot pretty quickly. All of the rental homes we have now are 3-bedroom brick homes on concrete slab foundations that are perfect for our market and climate.

We consider ourselves professional real estate investors and are always on the lookout for deals that make sense. Our preferred market is a university town about thirty minutes from where we live. It’s a great rental market and not too far from home, which is important because we self-manage our investment portfolio.

4. Why did you start using Stessa?

Answer: Probably like most beginning real estate investors, I was using a basic spreadsheet for my accounting—It quickly got out of control. It took forever to get the property income and expense categories set up, and even then, I couldn’t generate reports to give to my accountant at tax time.

I saw an ad for Stessa and added a single property to take Stessa for a test-drive. After seeing how easy the system was to use, I added our entire portfolio. Today, I use Stessa as my system of record.

5. How do you use Stessa to track and manage properties?

Answer: Right now, I mainly use Stessa to track income and expenses and generate financial performance reports across my entire portfolio. As Stessa continues to offer more features, I can see myself using Stessa as a full-blown asset management platform.

Investing for cash flow: How Clint Galliano plans to retire through real estate

6. What’s been your biggest success with real estate investing so far?

Answer: Our biggest success so far has been our most recent property, which we acquired by “accident’.” Our agent showed us a property with an extremely motivated seller, but honestly, we initially weren’t that excited about it because of the potential rehab work needed.

We made a low-ball offer and, after one counter-offer, eventually got into contract on an all cash purchase at 77% of the asking price. Three weeks later we closed. Less than a month after that we fixed it up, found a great tenant, and it’s now cash flowing with an annual NOI of just over 70%.

7. What’s the biggest mistake you’ve made and what did you learn from it?

Answer: Investing in a joint venture without conducting due diligence on our other partners’ skills and abilities. We invested with some former colleagues and all of us, except for one individual, had full time jobs. The plan was for the one with time on his hands to run the business.

Unfortunately, we found out the hard way that he knew virtually nothing about running a business and refused to take our advice. Eventually we might get a return on our investment, but we’re not holding our breath.

8. Looking back, what’s the one thing you wish you’d known when you first started investing in real estate?

Answer:How to analyze deals and do enough due diligence. It’s very easy to fall into the trap of being too optimistic when you invest in real estate. If you’re not careful, properties can turn cash flow negative almost in the blink of an eye.

9. What’s your favorite book on real estate investing?

Answer:Long Distance Real Estate Investing by David Green. The book is a great blueprint for investing in real estate whether it’s in your home town or completely across the country.

10. What’s your favorite thing about Stessa?

Answer: Being able to automatically upload and import our financial transactions into Stessa. That makes self-managing and doing our own rental property bookkeeping extremely easy.

Investing in real estate for the cash flow

Professional real estate investor Clint Galliano and his wife focus on cash flow by investing in affordable single-family rental homes that are easy to rent and maintain. By using Stessa’s rental property financial management system, they spend a minimum amount of time on their portfolio while enjoying solid cash flow.

  • Rental real estate can be great to replace normal W-2 income
  • Single-family homes built specifically to withstand the hot and humid weather in Louisiana are easier to rent and maintain
  • Scouring a nearby university town is the perfect way to prospect for future rental property investments
  • Analyzing potential investments and conducting thorough due diligence is important to real estate investing success
  • Tracking income and expense transactions in Stessa makes rental property bookkeeping and management extremely easy for Clint and his wife
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