Savage Builds Real Estate Portfolio with Limited Savings and Modest Salary

A former firefighter has revealed how he built a real estate portfolio despite having limited savings and a modest salary as a young adult.

Mike Savage's financial journey began after working in sales roles in his 20s, before becoming a firefighter and EMT. His wife was also working as a teacher at the time. The couple had to be frugal with their finances, but they still managed to buy their first home in Massachusetts in 2010 using a USDA rural housing loan that allowed for a 0% down payment.

The loan also came with an $8,000 first-time homebuyer credit, which was available at the time amid the housing crisis. The couple later converted this home into a rental property and bought another primary residence in Mount Pleasant, South Carolina, when work brought them to the region about three years later.

As Savage's family grew, he began questioning whether their combined incomes would be enough to cover education costs, save for retirement, and build the life they wanted. This prompted him to explore alternative ways of building wealth beyond his day job, including investing in rental real estate.

Savage's financial situation at the time of his move to Charleston was precarious, with "nothing in the bank" after tapping retirement funds for relocation expenses.

To address this issue, he leveraged an asset that was fully paid off, his truck, to secure a loan worth around $10,000. This loan served as a down payment on a new property, allowing Savage to enter the market sooner than if he had waited to save up a cash deposit.

Borrowing against a paid-off vehicle can provide quick access to funds but also puts the asset at risk if loan repayments are not made on time. For Savage, this strategy was seen as a low-risk option given his financial circumstances and desire to invest in real estate.

The truck loan marked the beginning of Savage's property portfolio expansion, which would later involve tapping into the equity of his primary residence through a home equity line of credit (HELOC). This move enabled him to access additional funds for further investments.

Homeowners can tap into their home equity through a HELOC, which provides a revolving line of credit that can be accessed as needed during a set draw period.

This financing option allowed Savage to access additional capital for his investments, providing another source of funds beyond the initial truck loan. With more money available, he was able to expand his portfolio and explore new investment opportunities. By leveraging their home equity in this way, the couple was able to grow their financial resources and increase their purchasing power.

To further accelerate his acquisitions, Savage began attending local real-estate groups and investor meetups around 2018. At these events, he learned about alternative financing options that can be used for property investments. One such option is hard-money lending, which allows investors to access funds without requiring a large down payment.

Property-tax records confirm that Savage owns several properties, as reported by Business Insider in their review of public documents.

The fire department's pay structure change had a profound impact on Savage's financial outlook. He initially viewed real estate as a way to supplement his retirement savings, but the reduced compensation made him feel helpless about his family's financial future.

Savage's experience as an Airbnb host led him to cofound SynergyStays, a short-term rental revenue management business that has grown significantly since its inception. This growth has influenced his investment strategy, shifting from accumulating multiple units to maximizing income from each unit.

This year, Savage sold four long-term rentals and used the $450,000 in cash generated from those sales to pay down debt. He plans to invest approximately $350,000 in a single short-term rental property that he believes will produce more income than the four properties combined had been generating.

His goal is clear: achieve more with less. Savage's financial strategy has allowed him to amass a net worth of approximately $2 million.

In 2021, his final full year as a firefighter, he took home around $40,000. The following year, one rental property - an accessory dwelling unit in his own backyard - generated nearly the same amount: $35,000 in gross income from rentals and SynergyStays combined make up roughly half of his total income.

Having diversified his income streams, Savage felt secure enough to leave his job with the fire department. Now he works hard, but on his own terms.