Challenging the Concept of Traditional Retirement (A Wild Story)
The Story
I was studying abroad in the Netherlands my senior year of college, and I was heavily into trading foreign currency. I was making $300 a day from what is called pure #arbitrage. The strategy involved taking advantage of different overnight interest rates in different countries and hedging positions to be neutral to changes in currency value. I could write an entire article on this topic, but I'll spare you the boredom and save it for another time!
One day, that opportunity disappeared, and I found myself sitting alone on a couch in my Rotterdam apartment with a bag of cash in my bank account, not knowing what to do next.
I began watching a lot of YouTube, and stumbled upon an investment strategy called "rental arbitrage". This article is not about rental arbitrage, but I'll explain it briefly for the story.
Rental Arbitrage
Rental arbitrage is when you lease a property from someone at one rate, and then you rent it out to others for more money. This is usually done on #airbnb where you can get high nightly rates.
I became obsessed and totally neglected my search for a real job. I reasoned that my girlfriend Hana Morrison is from Hawaii so I should also move to Hawaii and give the rental arbitrage a shot...her family thought I was crazy!
I spent weeks searching every website for nice rentals with ocean views. After hundreds of cold calls, I found a nice condo, and the landlord was willing to let me sublease short term. It sounded too good to be true and I quickly transferred him $2k as a security deposit to hold the unit for a few months until I arrived on island.
Meanwhile, I listed the condo on Airbnb with pictures from the Craigslist posting and generated $15k of bookings within a week. I was excited beyond belief.
Not So Fast
Weeks went by and I never heard from the “landlord” again.
I GOT SCAMMED BIG TIME!
I not only lost $2k, but I had to go cancel every single Airbnb reservation and watch $15k disappear from my account. One cancelled guest was particularly angry and gave me the "do you know who I am" speech #karen.
This was embarrassing. I gave up on the Airbnb scheme and even spent a few days applying for normal jobs.
Round 2
A voice in my head kept nagging me to try again. After days of this, I gave in and began furiously searching for new places, even enlisting the help of my roommate Troy Ibarra.
After a few more weeks of cold calling, we finally found another condo that seemed to make sense. I could lease it furnished and month-to-month for $3,200 and then rent it on Airbnb for $300 per night. This meant I would recoup my monthly rent payment in the first 11 nights of occupancy.
To avoid the same trap as last time, I asked my girlfriend's mom to tour the unit. I also made sure not to create the Airbnb listing until I was physically in Hawaii.
shortly after graduating college, I flew to Hawaii, moved in with my girlfriend's parents, and prepared the condo listing.
....and then I RETIRED
My Retirement
I spent 3 months going to the beach almost every day, eating the best food of my life, spending quality time with my girlfriend, and just relaxing. I even went fishing with my condo landlord.
In the 3rd month, I had generated so much revenue that I decided to really maximize my quality of life and found a way nicer condo with incredible views to live in. Although it cost a lot of money, it was an incredible experience.
The End of My Retirement
After 3 months, I got a call from Ryan Gomes, a recruiter who was hiring for a well-known #commercialrealestate company. I really wanted to be a real estate investor, so I saw a great opportunity to learn something that would help me achieve that goal.
Furthermore, the condo association in Hawaii reached out to let me know the bylaws prohibit use of the condo as a hotel. I was lucky to have gotten away with it for 3 months!
So… I finished out the trip with a nice profit and came out of retirement to begin the next chapter.
What It Means to be Retired
Most people think of retirement as permanently leaving a career at 65 years old to live out the last 10-20 years on whatever is saved up in 401K and IRA accounts. Boring!
Better concept:
Retirement is any extended period of time when you are not trading your time for money, and you have the financial means to do whatever you want in the day.
I live in a baseline state of retirement, and I come out of retirement for great opportunities.
You don't need to work 40 hours a week for 40+ years to earn your freedom. Find ways to generate #passiveincome and choose to live in an intermittent state of retirement.
About The Writer
Elijah Brown is a real estate investor, entrepreneur, Army officer, and writer. While working as an investment analyst for Bank of America, and later as an associate and manager for Healthpeak Properties (S&P500 REIT), Elijah developed a love for real estate and began raising private capital to acquire over $100 million of apartment units across the United States. Elijah is the co-founder and managing partner of GoldHawk Capital, a real estate investment firm that raises capital from private investors to acquire multifamily buildings in Arizona.