How Dylan Quit His High-Paying W2 and Built His Real Estate Business

Dylan Koch: [0:00] What's going on, everybody? I'm doing the Friday focus for today. And I will just give the most transparent and honest, you know, journey of how I got to our financial success. I wouldn't consider it financial freedom quite yet. But I'll walk you through kind of the numbers, the journey, and hopefully, this can help you with some hopefully bits of wisdom kind of mixed in the middle of everything. To make a long story short, I am from a very, I would consider small town, middle class family. Both of my parents worked factory jobs their entire lives. And it was a very stereotypical, rich dad, poor dad, where education was supposed to be my ticket, you know, out of the blue collar jobs that my parents had. So they stressed education at a very early age. Both my parents are very hard workers and never felt like we were, you know, missing out on anything. They provided very well. From that, I think I even got, you know, a very strong work ethic that I have today from my parents. We weren't rolling in it, know, we we still ate at home. We never really got to eat steaks and going out were special occasions. They always stress the importance of money. In fact, my mom would sit at the kitchen table and like balance, like physically balance a checkbook. But it was very much reduce your expenses, live below your means, be a good worker, work for the man, or, you know, try to work your way at the corporate ladder. So that's kind of how it was ingrained to me throughout high school. I got good grades, decided to pursue pharmacy as a career, simply for the fact that it was a medical profession that made good money that I didn't have to spend twelve years. Went to University of Cincinnati, but I also had gotten a job as a pharmacy technician during the time.

Dylan Koch: [1:43] And the only reason why I say this is because even throughout pharmacy school, I worked twenty, thirty hours a week, which a lot of my colleagues and peers did not. Yeah. I don't consider myself naturally intelligent. I was waitlisted to get into pharmacy school. I was number one on the waitlist and eventually got accepted. But, you know, the the plan was never to give up, to try something else. It was okay. I take another year, you know, I boost my GPA. I do some few more extracurriculars, and then I'll get in that way. Luckily, that didn't happen. So I got in, made some of my best friends in pharmacy school. And during that time, I was working for Kroger. To fast forward a little bit, at the end of of pharmacy school, I graduated with about negative $72,000 in net worth, and I graduated in 2017. In contrast to that, my peers, like, according to the American Pharmacy Association, the average when I graduated was, a 150,000 in student loans. So all this being equal, you know, I have about half of what the my peers and colleagues had simply for the fact that, one, I worked a shit ton. I took out the least amount of student loans possible. And I also got a few scholarships with my employer. As long as I promised them some employment post school, they paid for a little bit of my tuition as well. As a pharmacist, I started out at age 24, making a $117,728 a year. And I thought I was on top of the world.

Dylan Koch: [3:04] My only debt was was the student loans. So I continued to live with roommates. I think I had five roommates. The year after college, I drove a 2001 Dodge Stratus that barely kept going, and I paid aggressively off of those student loans. And I think the minimum was 3,000 a month, but I would try to get that up, I eventually paid off those student loans a year and a half just from working overtime too. So there are days where I work thirteen hour days, I pick up overnight shifts. I would travel around to different divisions or different stores that needed me or different stores within the same division that needed me that day. And the premise was simply, I'm going to make a decent amount of money, or I am making a decent amount of money. I should know what to do with it other than just save it. Because I was living so well below my means, I just didn't stockpile cash. I knew investing was a good idea. I just didn't know what to invest in. I got hooked with a buddy of mine at the end of pharmacy school who got us onto We Study Billionaires. It's a podcast by Preston Pysh and Stig Brodersen. And it was basically Warren Buffett's value investing, intrinsic value, doing discount cash flow models on on businesses, essentially is what it was.

Dylan Koch: [4:14] And so that was my first introduction to like investing, and also simultaneously listening to Dave Ramsey. And because of my upbringing, I think I really resonated with his baby steps, which was like an emergency fund, pay off all debt, start investing into your traditional retirement accounts, pay off your house, which I didn't have. So I was like, cool. But then you start doing, you know, these these compound calculators, retirement calculators. I mean, you do the max allocations every year for four years, yeah, you have a couple million bucks, but it's at 65. I think the life average in The United States, like, 7, 78. And I was like, well, that kind of sucks. And I think I have somewhat of a addictive personality. Whereas I when I latch on to something, I try to go deep down into it. So that was a pharmacy when I was in it. Did, you know, health and fitness at CrossFit for a while. So investing became another quote unquote obsession. But the problem is like, the rabbit hole never ends. There's so many different styles. There's the value investing, there's real estate, there's momentum, there's quants. I did options trading for a while. So there's all those different kinds of stuff that you can do. And as I kept listening and kept learning, I eventually listened to Rich Dad Poor Dad as one of those drives to a pharmacy, I think it was north of me. It was the only book I've turned around and re listened to immediately again. Because I almost felt kind of pissed off or gypped.

Dylan Koch: [5:41] Was like, why did I not know any of this ever existed? There's a better way to live life. I didn't know entrepreneurship was even a a thing that I could consider. Investing in real estate, you know, it crossed my mind when I was in college because I was like, my landlord's got to make a shit ton of money. But I was like, okay, you get 2,000 a month for $200,000 house. It's a long time to get your money back, not even considering, you know, leverage and debt, and all this kind of stuff. So as I kept learning, as I kept going, I got on the bigger pocket screen and eventually bought my first house hack in a decent neighborhood of in in Cincinnati in June 2018. So it's about a year post graduation. And at that point, I was dating my my future wife. She actually moved in with me. And yes, I I did charge her a very small amount of rent. I think it like $300 a month. But I rent out the other side for 1,500 a month, and I was basically living for free, still driving that paid off car, and still working a shit ton of overtime. So I was stockpiling money. And then that buddy I mentioned to that got me on the podcast, were like, dude, this real estate thing, it outperforms everything because of the five ways, you know, real estate can pay you.

Dylan Koch: [6:49] And so we decided to partner up. And so we bought a duplex, a similar neighborhood in, I think it was September 2017. And then we bought another duplex in January of the following year. And that was the plan. Those were 25% down. You know, we didn't really know any better, didn't know about the BRRRR method. And eventually, we brought on a third partner, also a pharmacist colleague of ours, who's still a close friend today. And we got to like 13 units. Those run out amongst the three of us. We really weren't getting too far. We thought we were gonna, you know, have all these single family rentals that were gonna cash flow. We successfully burned some properties, but the needle wasn't moving quite like we thought. And as this is kind of happening, pharmacy, you know, I'm kind of getting burned out. And for retail pharmacies, particularly, it is a tough gig. I won't get into that here, but it's harder than you probably think it is. Well, I got promoted to a pharmacy manager job at age 25, so like around the same time we were kind of building this portfolio. But I was having these two different thoughts, like, you know, the FIRE movement of I can do what I want when I want with whoever I want versus like climbing this corporate ladder. It's almost like an identity crisis of some kind, like which one do I really want? And I was 25 years old at this point, making almost 130,000 with my manager position. And I had paid off all my student loans at this point.

Dylan Koch: [8:06] And so I could have just, you know, kept on going, climbed the corporate ladder, stockpiled a shit ton of money, probably bought some more rentals and kept going that way. But there's almost like, like I said, an identity crisis, I didn't know what to do. So I eventually left the pharmacy job, and I took a mail order position. I was still working full time, but I wasn't working fifty, sixty hours a week. Was just, I showed up, I did my job, and then all their time was dedicated to this real estate business. Around that same time, twenty eighteen-twenty nineteen, we stumbled, we being the three partners, some of what's called residential assisted living, where basically it was a mix of business, real estate, and a little bit of a medical background because of it was essentially an assisted living facility. And we went to the best ever conference in Denver, Colorado. That year, we met someone who was like, you know, the leading expert on it at that time, we're like, we're gonna do this. And so that's what we did. We basically dropped all of the real estate stuff. And we started searching for houses in around Cincinnati that could do it. We've actually found a plot of land, we signed a $25,000 lease option. We started meeting with architects because we're going to build this thing. We're going to raise money. We started doing the syndication and pitch decks.

Dylan Koch: [9:10] We did all this stuff. I actually think we would have done it. But then as we were kind of going through this process, we had one problem with this specific jurisdiction that won't let us do it. That delayed us a little bit. And by the time that we got the okay, COVID happened. And no one was willing to give us money for residential assisted living to three young 20 year olds during the middle of a pandemic, especially for something that was drastically affecting the elderly more so than the rest of the general population. At that point, we kind of the partnership kind of deteriorated, we were kind of all like, oh, what the hell? We started to have different visions for I think what we wanted everyone wanted wanted to do. So then we split, we sold all of our properties over the next couple years, went kind of back doing the pharmacy thing for a while, not not really have much investments. But I had also met my wife. My wife and I got married in May 2022. And now now our income's really solid. She's a pharmacy full time pharmacist. I'm a full time pharmacist, you know, we're making 200,000 plus a year. And we don't have any kids. We're still relatively young. Think I was 28. And the male would have like, you know, no sense of fulfillment. I was like, I really like this this investing stuff. I'm good at it.

Dylan Koch: [10:21] At least I thought I was good at it. And so we basically had a conversation like, we have some savings. Let me leave my w two and give it a shot. And if it doesn't work in three to six months, then at least I could say I could try. I wouldn't have that burning feeling that was like always the what if, you know, that people kind of talk about. At least I could say I tried. So I did it, pulled the plug, gave my two weeks notice to work, and joined Ryan Dossi's CCF program to kind of kick start the direct mail. And that was strictly to find rentals, know, to get us to that $5,000 a month in passive cash flow that no one seems to talk about. I definitely had a feeling of imposter syndrome that I think a lot of people struggle with. Here here I was, was a, you know, white collar worker, leaving what would seem to be a cushy job. And the biggest motivator at that point in time was probably fear. Fear of having to go back to work. Failure of failure. And that was really my driving motivation. And I would continue that same work ethic, you know, that I had with pharmacy, you know, growing up when I was mowing lawns, lifeguard, all that kind of stuff. And I took all the courses, ran through them super quick, sent out the direct mail. As I was driving to other appointments, you know, you're calling other leads, going to foreclosure, auctions, all this kind of stuff. Well, I joined that in, I think it was October 2021. And I didn't get my first deal until March 2022. After, like, $30,000 of ad spend, or at least money spent to start the business.

Dylan Koch: [11:45] And I was like, fuck. You know, what did I do? And that first deal I did was only, like, I think it was $5,500. So I was still deeply in the red. But then they started to kind of stockpile each other. And I think we finished 2022 with a 375,000 in top line revenue. A lot of that had some startup costs. So I don't know what the net bring home was, but it really wasn't all that much. During that that kind of build up phase, I'd said I had an addictive personality. I was an over consumer of content, where I would pick up a book or listen to a podcast, listen to an audiobook, and immediately go to the next one. And it wasn't until going to some of these meetups and stuff where I felt like I knew more than most people. And for like, very nature and abstract things like taxes, or insurance, or things that really didn't move the needle on being in us starting out investing. It was kind of like, wow, these guys can do it. I guess I could do it. And I think that's related to people who transition from a white collar job, because engineering or medicine, like everything has to be right. Or if it's not, you really fuck up. And then in business investing, that's not necessarily the case. It's keep moving forward, keep making mistakes, learning from those mistakes. At least someone's not dying when you make a mistake in real estate or business. At least you hope not.

Dylan Koch: [12:55] So I kept on going with it. And that's actually how I met. Mike and Dan was through CCF. 2023 was the first full year investing. We did 585,000 in top line. And again, you know, go back to the beginning, I didn't have any rentals. And I think we added 15 or sixteen, fifteen to 20 in that along with that income. That's what I wanted to begin with. I wanted the passive income. Some of those are seller finance, some mostly burs. And now I'm going to fast forward a little bit to today, where we'll do just over 600,000, maybe 650,000 this year, depending how quarter four goes. And now married, married, but have a kid now. And we're up to 43 units, about $4,500,000 in real estate with about 3,000,000 in debt. Our net worth, like I said, from the beginning, I'm not all real estate, actually. In fact, only about 50% of the net worth is in real estate. But what I learned throughout all this is what rich people do is they take asymmetric bets. What can you invest, you know, $10,000 in that's going to pay off 100,000, not just your standard 7% compounded interest. So I took some shots. I got lucky and right on some of them on as far as like the equities and crypto is concerned. And the other thing is, most people don't have a investing problem, they have an income problem.

Dylan Koch: [14:13] And some of the reason why our net net worth is what it is today is because I was able to invest hundreds of thousands of dollars at different points in time. So like the first 12 unit deal that I did, I started to bring $100,000 down to the table. And so people just don't have the $100,000 to invest. So the first thing, you know, I think budding entrepreneurs or real estate investors should do is figure out how to make a lot of money really quickly, which is why I kind of resonate with Mike and Dan and their massive income, instead of passive income to an extent. You know, I'm still a fan of rentals, I still buy rentals. And my plan is own 100 rentals, you know, 100 units, maybe eventually pay those off, live a very comfortable life. But the goalposts always change. And that's another thing is, you know, I've kind of hit some of the goals that I've set for myself, but I feel like it's important as a human being to have goals that you continue to set for yourself and still be content with the journey. But once you get there, you know, just not the feeling of euphoria that you get quickly fades away, just like with most things, just like buying a new car, for example. There's no secrets to this other than it's just simple, hard work, you know, in the beginning, before the baby was here, and I didn't have much hobbies outside of that.

Dylan Koch: [15:28] And I'm not saying this is right. But I don't do CrossFit anymore. You know, my health isn't what it used to be. I'm the one say I'm unfit, but it depends on what your priorities are. And something else steal from I think it was Brandon Turner. It's not work life balance. It's work life balancing. And it's always one side is always heavier than the other. And it just kind of depends on the season of life that you're in. Don't want to hustle and grind forever. I've dealt with burnout. But if you just simply don't give up and you get around people who are doing what you're doing and you can level up yourself, I promise you, you will be somewhat successful. Okay, guys. That's it For now, I guess going going forward, you know, to keep myself publicly accountable, it's 10/21/2024. Next year, I hope to do a million dollars in top line revenue. I might have hired an assistant, I'm going to hire an acquisitions person and maybe one other person. But I think with that small team based here in Cincinnati, increasing our our marketing spend, mostly with direct mail, I think that's easily possible. So cheers to 2025, and I hope this at least resonates with some of you. Feel free to reach out. I'm Dylan Does Deals on Instagram.

Dylan Koch: [16:35] Just DM me, and I hope I hope to talk to you there. Thanks, guys.