David Pere joined the Marines in August 2008 and served for more than 13 years on active duty. In 2021, he transferred to the Marine Corps Reserve. When a friend urged him to listen to the audiobook “Rich Dad Poor Dad” by Robert Kiyosaki in 2015, the “lightbulb finally went off” in relation to passive income and real estate investing. He’s also the host of “The Military Millionaire Podcast” alongside fellow veteran Alex Felice.
Where did your interest in finance come from?
My parents were consistent envelope budgeters and tried to instill a basic knowledge of finances, but I always found it a little boring as a kid. When I first joined the military, I knew enough to contribute 8% to 10% of my paycheck into the Thrift Savings Plan, but not enough to understand proper fund allocations based on my age and actual risk tolerance.
It wasn’t until a friend got me to listen to the audiobook “Rich Dad Poor Dad” by Robert Kiyosaki in 2015 that the lightbulb finally went off regarding passive income, real estate investing, and the opportunities they could afford me!
You got started in real estate investing in 2015 through “house-hacking” a duplex with an FHA loan. What was that process like for you?
In my opinion House Hacking is the single greatest way to jump into real estate investing! This is a strategy where you buy a duplex, triplex, or four-plex and live in one of the units while renting out the additional units to tenants. Done correctly, the rent from these tenants will cover the mortgage, and almost—if not all—of the additional costs of homeownership.
In a single eliminate your largest living expense (rent/mortgage), and simultaneously begin learning how to landlord while benefiting from depreciation, appreciation, cash flow, and having your tenants pay off your mortgage for you!
Also, don’t let somebody talk you into using the FHA loan over the VA loan like they did me, the VA loan is the best primary residence mortgage product on the market!
The process was great honestly. My 2/1 apartment cost $550/mo and the least was up Dec 31st. I found a duplex that made sense, and purchased it for $79,900 with a closing date of Dec 28, 2015. My monthly mortgage was $585/mo and the duplex had a tenant paying $475/mo when I moved in. Now, I was only paying $110/mo to own a 2/1 duplex plus utilities on my side, and any maintenance.
I just sold this duplex for $168,600 in April, and it cash flowed positively all but one year that I owned it, and that year was because I renovated a kitchen between tenants.
Why do you believe that expenses, rather than income, are the main issue when it comes to achieving financial freedom?
A few reasons actually:
- Until you have control of your expenses (i.e. spending habits), it won’t matter if you make more money, because you’ll end up spending it. There are people earning $250k/yr that live paycheck to paycheck.
- If you earn an extra dollar you get to keep around $0.70 after taxes, but if you save an extra dollar you get to keep 100% of it, because your expenses were paid with post-tax dollars.
- Being disciplined with your expenses is scalable through all businesses and investments. The better you are at managing money, the more of it you will have.
How do you define financial freedom?
The ability to do what I want, when I want, where I want, because I want to. Sometimes my local friends will take a random weekday off to go floating on a river, just to remind ourselves that we can. Last year I spent over a month in South America without having to ask permission or worry about work.
How has your military background helped you in real estate investing?
There are three main ways the military has set me up for success as an investor:
- The military helped me develop Discipline – Probably don’t need to elaborate here. It’s no secret that the military instills discipline in our nasty little bodies when we join. That discipline makes us excel at anything we set our minds to, including real estate investing.
- The Marine Corps breeds Decisiveness – “Any decision is better than no decision” is a common phrase in the military. You need to be able to make fast decisions on the battlefield. This speed to act in the business and investing worlds can make all the difference when it comes to getting your offer accepted on a potential deal.
- Lessons learned from Hurry up and wait, and being “voluntold” for duty…seriously – in the military we often find ourselves sitting around trying to occupy ourselves while we wait on the next evolution, or working extra hours without extra pay. Let’s be real, how often did you only work 40 hours in a work week? Exactly. Well, when you first start a business, you’re going to be working a lot of hours in what I like to call the BMW phase…(below minimum wage). A lot of businesses fail because the owners give up before they get off the ground. Service members have the tenacity to remain consistent and push on through those rough first months. In fact, a lot of service members are even capable of doing what I did and launching businesses on the side before the sunrise, after sunset, and on weekends, and still make it work…after enough hurry/wait, and duty, working extra hours without pay for yourself, and your own dreams doesn’t seem so bad!
What was the biggest concern you saw from service members while serving as a command financial specialist?
The most common issues that I had service members come speak to me about were when they realized how small their financial runway was going to be when they left active duty in a few months, questions regarding how getting married/divorced would affect their finances, and the best ways to finance the new car they wanted to buy.
What’s the worst piece of financial advice you’ve heard within the military community that you’ve had to correct when helping others?
I’ve heard a lot of interesting ones over the years, and there are some recurring themes… but to boil it all down to one, I would have to say the worst financial advice is any advice you follow blindly. Unfortunately, there is a lot of information passed down through the ranks, that is simply poor advice. I’m a big fan of telling people to pause, and figure out what their personal long-term investing goals are, and what their risk-tolerance is, and then spend time researching and educating themselves on finances and investment strategies, before actually investing. Don’t just blindly listen to what others are telling you to do. Especially not if they haven’t achieved financial freedom yet.
Is there anything else you would like to add?
The single fastest way to achieve success with any goal you have in life is to surround yourself with people who have already achieved that goal, and people who are striving to achieve similar goals. If you worked out with Arnold Schwarzenegger every day, you would get stronger. Similarly, if you spend time with, and learn from, successful investors, you will become a successful investor.
The opposite is true too. Don’t surround yourself with deadbeats, and if you need to cut some bad influences out of your sphere of influence, do so.Read comments