The Jensens’ Journey to Financial Independence: From Live-In Flips to Passive Income

Carl and Mindy Jensen’s financial journey is a testament to the power of diverse investment strategies and the importance of adaptability in the ever-changing landscape of personal finance. With a net worth of $5 million, the couple has successfully navigated various investment avenues over the past decade, transitioning from active home flipping to more passive income strategies as they embrace the next chapter of their lives.

The Rise of the Live-In Flip

The Jensens’ foray into real estate began with a strategy known as "live-in flipping." This approach involves purchasing a home, renovating it while living there, and then selling it for a profit. The couple has completed seven live-in flips, netting them an impressive profit of over $1 million.

"The beauty of this strategy is you need a place to live," Carl explains. By living in the property they are renovating, they mitigate the financial risks associated with carrying two mortgages. This strategy allowed them to pay the mortgage on their primary residence while simultaneously investing in their future.

However, the live-in flip strategy is not without its challenges. Living in a construction zone can be stressful and disruptive. "This is a pretty rough way to live. We’ve had some bad moments," Carl admits. The time commitment is also significant; Carl recalls working upwards of 80 hours a week while juggling a full-time job and home renovations. "It made us wealthy, but I wouldn’t do it again," he reflects.

As the Jensens enter their early 50s, they are reevaluating their approach to real estate investment. "We always have our eye on the real-estate market," Mindy, a licensed real estate agent, states. However, the couple has decided to step back from the demanding world of live-in flips, recognizing that the physical and emotional toll is not sustainable as they age.

Transitioning to Passive Income: The Power of Private Lending

In 2016, the Jensens began exploring private lending as a more passive investment strategy. This approach allows them to lend money to other real estate investors for property renovations, earning interest on the loans without the hands-on involvement required in flipping homes.

"We set the rate. There are some rules around it," Carl explains. Initially charging 10% interest, the Jensens have adjusted their rates to 12% in response to rising market conditions. "The private lending generates such a nice return that it’s difficult to be like, ‘No, we don’t want to have the easy money,’" Mindy adds. This shift reflects their evolving financial position and the desire for a more manageable investment strategy.

To successfully engage in private lending, the Jensens emphasize the importance of having both capital and a robust network. They utilize their retirement funds, having rolled over their 401(k) savings into a self-directed solo 401(k), which allows them to make loans and invest in real estate. "It’s not an option for everybody; you have to have self-employment income," Mindy clarifies. However, their long history of investing has provided them with a substantial cash reserve to work with.

Their first private lending experience came from a colleague in the real estate industry, who needed a short-term loan. This initial success opened the door to further lending opportunities, as they began to connect with other real estate investors seeking quick financing solutions. As of April 2024, the Jensens have $658,000 lent out across two loans, carefully selecting borrowers based on trust and reliability. "We lend to the person as much as to the deal," Mindy emphasizes, highlighting the importance of knowing who they are lending to.

Lessons Learned and Future Aspirations

The Jensens’ journey is filled with valuable lessons for aspiring investors. Their success in live-in flipping demonstrates the potential for significant profits through hard work and strategic planning. However, their pivot to private lending underscores the importance of adaptability and the need to reassess investment strategies as life circumstances change.

As they look to the future, Carl and Mindy remain committed to exploring new investment opportunities while prioritizing their well-being. "You could still make money live-in flipping, and if you have more time than money, it can be a really great way to turn your home into an investment," Mindy notes. Yet, they recognize that their current financial independence allows them to pursue less labor-intensive strategies that align with their evolving lifestyle.

In conclusion, Carl and Mindy Jensen’s financial journey is a powerful reminder that success in investing is not solely about the strategies employed but also about the willingness to adapt and grow. Their story inspires others to explore diverse investment avenues, embrace change, and ultimately strive for financial independence.