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Bryce Stewart shares his inspiring journey from a sixth-grade teacher to a successful real estate investor who retired at 35. Discover how strategic property investments, passive income, and smart networking can transform your financial future.
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Bryce Stewart (00:00)
So your goal is not doors, your goal is take home pay, profitability from the investments that you own. So in my approach to, just purchased a month ago, not even a month ago, a couple of weeks ago, a duplex. Now that’s relatively small, but it’s in a market that I know.I’m gonna be able to make it a profitable investment. It’s gonna put more money in my pocket every month.
Scott Bursey (01:58)
Hi everybody and welcome to the Real Estate Pros Podcast. I’m your host Scott Bursey and today I’m joined by someone I’ve been really looking forward to speaking with. Bryce Stewart, who’s been making serious moves in the real estate space. Bryce, glad to have you here, man.Bryce Stewart (02:19)
Thanks so much for having me, I appreciate it.Scott Bursey (02:21)
I think our audience is really going to take something away from how you were able to retire from your W-2 job at age 35. Let’s dive in, shall we? So first off, Bryce, for people who may not be familiar with your world, give us the short version. What’s your main focus these days?Bryce Stewart (02:32)
Yes, for sure.So I’ll give you ⁓ the origin story and lead into that’ll give you good idea of where my current focus is. ⁓ I was a sixth grade public school teacher for 10 years. ⁓ And nine of those were in Bethlehem, Pennsylvania, which is where I currently live. Bethlehem is part of what’s called the Lehigh Valley. It’s about an hour north of Philadelphia, an hour and change west of New York City. It’s the third largest metro area in Pennsylvania.
And I was a sixth grade public school teacher here. I realized very quickly as my wife and I started having kids that my teacher’s salary was really not gonna cut it if I wanted for my wife to remain at home with my kids and not be obliged to do W-2 work. And really for myself, I realized that the ceiling of compensation was pretty low for a sixth grade public school teacher with four daughters. We have four kids.
I four daughters. So I found myself ⁓ stuck kind of in that situation where I couldn’t ⁓ boost my teacher income meaningfully to get to the place that I wanted to be economically. And so I had to begin looking at other avenues. ⁓ And for me, I mean, it got dire. I’ll tell you what, 2008, my wife and I were pregnant with our second and we were renting an apartment.
and we were trying to figure out how we were going to afford to have a second kid, which that was the point at which my wife really was going to have to leave her W-2 job. We were making it work with one kid and just it really wasn’t going to work with two small children. And so I went back in my, let’s call it back in my memory to when I was 23, before I met my wife, I was working a job fresh out of college. I was living with my parents at age 23.
And I was paying rent to my dad to live in my high school bedroom at my parents’ house. 300 bucks a month, because that’s the deal. I had a college degree and my dad wanted me to do that. And I worked with a guy at this job who was also 23. When I asked him where he lived, he told me that he and his college roommate had bought a four unit apartment building and that they were rooming in one of the apartments and renting out the other three apartments.
And I’ll tell you what, Scott, I didn’t even understand that that was possible as a 23 year old. I I pestered the guy and said, what do mean? You guys actually own the building? He said, yeah, we own it. I said, well, isn’t there a big mortgage? Isn’t there real estate taxes and aren’t there utilities and insurance and all that stuff? He said, yeah, man, we we pay for that stuff with the rents that we get from the other three units.
and I was astounded. I said, so wait, you guys are just living there for free? He said, yeah. And I said, well, I’m paying $300 a month to live in my high school bedroom and you guys are living for free? He said, well, almost. It also puts a little spending money in our pockets every month. And that, Scott, was like a light bulb going off in my brain. It was the first time I realized you could make money from something besides your job.
Before that, you see, I thought, well, I’m a teacher. The only money I’ll ever make will be from my salary. And people who make a lot of money, well, it’s people who have really high paying jobs. That’s the way that you make a lot of money. And I sort of figured, well, I majored in education in college, and that means I’m never gonna be a high earner. So when this guy told me that he was doing that, and he didn’t seem a whole lot smarter than me, it was a revelation to me that this was a way that you could make money in your life besides your W-2 job.
So, okay, now fast forward, I’m pregnant, you know, my wife’s pregnant with our second child. We’re renting an apartment and I’m thinking, boy, if anybody ever needed to live somewhere for free, it’s us. We need to figure out how to do what this guy did ⁓ when I was, you know, my friend and I was 23 years old. So my wife and I bought a duplex in Bethlehem, Pennsylvania. And for your listeners, by duplex, I mean a two unit building. We lived in one apartment.
with our two daughters and we rented out the other apartment. And I’ll even give you the numbers. The cost to own the principal interest taxes and insurance was about 1200 bucks a month. And the rent we were getting from the apartment downstairs was 700 bucks a month. So we only had to kick in $500 a month at a time when I think our rent before that was 850. So really for us, it was like a savings.
to move into this duplex and it actually was a nicer apartment than we had been renting. So that was really, I know that seems like a small deal and it was a small deal, but to us at the time it was a big deal and it was the first opportunity that I had to begin making money from something besides my job. And really I say making money, really it defrayed the cost of the mortgage, it didn’t make us a ton of money outside of that, but it was a good primer on.
on real estate and ultimately when you boil it down, those are the same basic levers that are in play in real estate everywhere from the smallest of deals to the largest of deals. So fast forward, we lived in that place, we used an FHA loan to buy it, which is a 3.5 % down payment loan that was all we could afford at the time. In fact, we scraping together all of our pennies just to make the 3.5 % down payment.
Fast forward, we did that a number of times where we lived in it and rented out the other small multi-families. And now to bring that to the present, eventually we stopped living in our rentals, but I kept shopping for the same kind of inventory in my local market. So small multi-family, ⁓ mostly residential assets in Bethlehem, Pennsylvania. So fast forward by 2015.
I retired from my day job. My wife, had already managed to retire. ⁓ Our income from our rents more than paid for our monthly budget. And then from 2015 until the present, I’ve been trying to build the portfolio and make it throw off more income, more and more income to really give us a better and better lifestyle and more and more comfortable margin. And then in the last few years, I’ve branched out and started doing some stuff. ⁓
with varying degrees of success outside of this local market. So that’s the origin story in brief to the present and that’s where I am at present.
Scott Bursey (10:26)
Love it. Love it, Bryce. What caught my attention about you was the way you’ve been able to designate more time with your family. know, Coach LaCrosse, which we haven’t discussed yet, and volunteer at church youth groups. That’s not easy, especially in today’s climate.Bryce Stewart (10:38)
For sure.Yeah, I’ll jump in my motivation from the beginning It changed a little at first it was survival, right? So that first duplex it was like how do we even survive given that my wife was gonna stop working? And once we figured out how to survive with her staying at home with my daughters that was probably in our second rental that we that I displaced her take-home pay through through rents and then
Scott Bursey (11:23)
⁓Bryce Stewart (11:52)
You know, after I retired my wife, I started realizing, well, maybe if I keep doing this, I could retire myself, which I did. And I went from, let’s say, you know, 40 to 45 hours a week as a teacher to when I moved into just managing our real estate, it was maybe, if I wasn’t involved in an active renovation, it was maybe 10 hours a week, 10 to 12 hours a week of active management.The problem with doing that when you’re self-managing your portfolio is you never know which 10 or 12 hours it’s going to be. It could be two in the morning. It could be ⁓ when you’re trying to go on vacation. And so even the 10 to 12 hours of self-management can feel a lot like being on call 24-7. And so I began to realize that not long after I retired. that’s when I started desiring to have
let’s call it complete or flexible time freedom to be able to continue to get income from the portfolio, but not be obliged to be the janitor, the handyman, the rental agent, et cetera. And so I started desiring more and more passivity out of this portfolio without it killing the income. So 2022,
I believe I negotiated with a property management company to begin running the day-to-day show with all of my units. Now I had self-managed for a while, so I was able to hand them over a pretty well-organized and well-oiled machine with, know, that they were, in fact, that’s what they said. They said, is the most organized portfolio we’ve ever taken over. I retained…
my own advertising and I retained my own showings and tenant selection because my entire portfolio currently is within about three mile radius of my house. So some of that is maybe foolhardy. I probably could have bought more and seen greater appreciation if I had gone outside of my own market, but the deals were good enough and my desire to have an easily manageable portfolio was strong enough that I managed to piece it all together inside of
the Bethlehem, Pennsylvania market, which means I don’t have to really drive very far if I need to check on the manager or anything like that.
Scott Bursey (14:23)
That is awesome. And it’s impressive that you’ve reached that level of autonomy where there’s a specific, was there a specific moment or a particular deal where you realized, okay, you know, this is actually working.Bryce Stewart (14:42)
Yeah, well, it came in little ⁓ bits, right? So to your audience who’s listening, maybe they have aspirations for real estate investment, real estate ownership. Maybe they’re already a real estate professional and they’re figuring out how to optimize. I think there are some lessons at each level that repeat themselves at each level. So for me, the first lesson was this.I alluded to it before, I didn’t understand that you can make money from something besides your job. And I saw wealth as being, for me, behind a brick wall. I didn’t know how to get there. I knew other people who were rich. I knew doctors were rich. knew maybe, you know, attorneys were rich. I didn’t know any teachers that were rich. And it felt like they’re all on the other side of this wall. I don’t know how to get there. There’s a brick wall in front of me.
And when my wife and I bought that first duplex and started making rent from the first floor and it successfully defrayed part of our mortgage, it felt to me like somebody pushed one of the bricks out of that big wall and a ray of sunshine came through and hit me in the eyes and I saw, you know what, this kind of worked. It was like a test case and a proof case for me.
that it worked. Now that was an incremental step, you know, there was no huge aspiration at that point, it was just survival. But that little bit of success taught me, you know what, I bet I could knock a few more of those bricks out and maybe do this again. And so we did. the first thing that it was a proof case that we could do something aside from just kind of the standard W-2 job. And when I ended up retiring from my W-2 job, that was another
sort of proof cases. Like I saw people who were, you today we would call them Instagram influencers or whatever, but I saw people who could travel at a whim, could vacation wherever they wanted to in the world and were free from the constraints of, you know, having to run a business or be employed by a business. And it always seemed like that was other people. They know how to do it. I’ll never be able to get that degree of freedom, even the success I’ve already had.
has obliged me to always be present for my portfolio. How could I ever get to that next stage? Well, you begin realizing that you can do it with varying degrees of success. I started interviewing property managers. I began developing this possible vision that I could pursue.
Scott Bursey (18:02)
Now Bryce, every operator I know has a moment where things got real, if you will. Maybe a deal that went sideways or a time they had to pivot fast. You mind sharing one of those moments with us?Bryce Stewart (18:20)
Sure, well there’s been plenty of ⁓ minor ones in the building of my own portfolio, which they don’t seem minor when you’re going through them ⁓ in the moment. ⁓ You know, there’s, gosh, my wife and I got sued by a contractor on one of our jobs because he was carrying inadequate insurance.I didn’t bother to check his insurance or get the additional insured certificate that you need to get with every contractor who’s working for you. He injured himself and he filed a slip and fall claim ⁓ with us as the responsible parties. Even though he was there doing work himself and he slipped, it was his own fault that he slipped. He found a highly creative attorney.
to pursue us for the damages and I was beside myself emotionally because we were getting sued. It ended up getting taken care of with my insurance company. The liability that was our portion was not really all that substantial even though the initial lawsuit was hefty. ⁓ But I let that emotionally freeze me for a while ⁓ and really kind of slow me down. There was COVID.
Of course, which forced everyone to pivot and try to figure out is my business going to last? I thought there was going to be a rental Armageddon and that my properties were going to, you know, head the opposite direction in value. Of course, they didn’t do that. did the opposite. you know, rents went through the roof. I have a, I target probably a higher demographic. And so most, if not all of my tenant base.
continued to pay throughout COVID. They were employed by employers who managed to figure out ways to keep them remotely, you know, employed and earning a paycheck. So we had no substantial sideways hits during COVID. ⁓ And then I shared with you before we got on here, I invested, I wanted to get really smart and start investing in large multifamily syndications. So I did that as an LP, a limited partner in 2022.
in an investment that in retrospect I really should not have invested in. It had variable debt. ⁓ It seemed like a big, shiny, successful project. In reality, they had no rate cap on their debt. There was a preferred equity tranche in the capital stack, which ended up proving fatal for all of the common equity investors. ⁓ And that was a bad deal. It was my first LP placement.
And I had never lost money on a deal that I had done personally in my local market. So I figured maybe this won’t perform hugely for me. Maybe they won’t meet the IRR that they’re advertising. What I didn’t realize was that I was going to lose 99 % of my invested capital. So that was a hard one to take.
Scott Bursey (21:20)
Yes, understandably so. Looking at your business today, what tripwire or system have you built specifically so that exact misfortune can never happen to you again?Bryce Stewart (21:34)
Yeah, that’s a great question. So if I was, if I could go back in time, hop in the time machine and go talk to my 2022 self, what I would say is become a part of a network of investors ⁓ or other people who you’re not necessarily investing with, but who you trust to bring a deal to, to have them kick it around, to take a look at it. I had access to people even in 2022, who, when I was considering investing in this big LP deal, I should have brought themthe PPM, should have brought them the offering memorandum, I should have let them beat it up and tell me, here’s why this is not going to work. I had people who would have known that and I didn’t utilize them. So now if I’m gonna do it, I am doing deep Google searches on all of the general partners. I’m taking the actual language of the actual offering to a personal attorney as well as seasoned investors and saying,
Tell me everything that could go wrong here. And I would say this for other investors out there, given the current debt offering environment, in other words, what you can make in interest off of treasuries or off of even a high yield savings account, you need to find if you’re make an equity investment, something that is close to guaranteed or is compensating you in an outsized way for the extra risk that you’re taking.
for investing in something. So I wasn’t thinking that at the time. I was thinking, hey, they’re advertising a 16 % IRR and a three year hold and maybe I’ll double my equity in the midst of it. And that just did not pan out investing in this large syndication. And in 2022, there’s not a ton of deals that have gone successfully from 2022 through have exited successfully, even if it didn’t fall apart the way that mine did.
A lot of large multifamily deals like this, they didn’t anticipate the headwinds that they have in the current market because they can’t sell at their anticipated cap rate ⁓ because money is still expensive for their would-be buyer.
Scott Bursey (23:49)
Absolutely, and that’s the kind of stuff, Bryce, people don’t talk about enough. And honestly, it’s what separates the folks who just dabble from the ones who stay in the game long term. Let me ask you this. What are you most focused on solving or scaling next?Bryce Stewart (24:10)
So in real estate, oftentimes people get caught up, I think, on the wrong metric. Maybe they think about doors under management ⁓ or they boast that they have X number of doors. That’s always seemed silly to me ⁓ because you can own doors that are taking money out of your pocket. You can own unprofitable doors. Or if you’re making 25 cents per door per month,you need thousands of doors to give you a level of income that allows you to leave your W-2, which was my goal initially.
So your goal is not doors, your goal is take home pay, profitability from the investments that you own. So in my approach to, just purchased a month ago, not even a month ago, a couple of weeks ago, a duplex. Now that’s relatively small, but it’s in a market that I know.
I’m gonna be able to make it a profitable investment. It’s gonna put more money in my pocket every month.
And I have a system where I can plug and play that duplex with my existing portfolio and not increase my own chores, monthly chores, meaningfully in any way. The game, as I see it, unless you’re obsessed with just working, the game is to figure out how do you drive up the income that you’re getting from either the same amount of time
or from decreasing your amount of time. I’m not saying work isn’t good and sometimes you jump back in and wanna do work. There’s a rewarding aspect to doing good work. But if you’re in the investment game, what you want is return on investment that you’re making. And if it takes up more of your time incrementally, pretty soon you run out of your own time. So what you want is something that’s gonna give you an outsized return for the amount of time that you’re dedicating to it.
And that can take time to build up, but I’ve gotten to the point now where I have 40 units in Bethlehem. It throws off, I would say, north of $25,000 a month in, quote unquote, passive income with my somewhat involvement here and there and affords me flexibility to do what I wanna do, to spend time with my girls, to volunteer, so what you were alluding to.
It’s afforded me that level of income, which as a teacher I never dreamed I’d be able to get to that point.
Scott Bursey (26:36)
We see it, and to your point here, people chase doors or revenue all the time. For you, is that goal the destination, or is it just the fuel that allows you to do something even bigger?Bryce Stewart (26:52)
I don’t want to discount the metrics because they can be important. ⁓ If you’re in an inflationary environment and you grab a whole lot of doors, chances are good you’re going to see some appreciation ⁓ multiplied by the number of doors that you own. So it can be a meaningful metric. then revenues, yeah, top line revenues, they mean something. ⁓ You should look for higher ways to increase your revenue or to securestreams of revenue that are high, but ultimately, yeah, what you want is profitability, not just doors and not just revenue. So you have to keep that metric in mind while keeping the other metric in mind. And then, yeah, like you said, the larger things that I’m pursuing are actually the smaller things. ⁓ This morning, I made breakfast for my 12th grader and my 10th grader. They wanted scrambled eggs. I was present and able to do that. ⁓
I have a daughter who’s playing lacrosse this year and I’m gonna be one of the coaches for her lacrosse team. I gotta be ready to do that at 4.30, five o’clock in the afternoon, ready to help her out with that. I volunteer at the church that we go to at our youth group where my daughters attend. These are small things that to me are big things.
If my wife and I hadn’t managed to build a portfolio that delivered us passive or flexible passive income, I wouldn’t have the time in my schedule to do these things that I really find rewarding and that I want to do. So if you’re on a roller coaster where the increase in income is accompanied by an increase in time spent by you, you have to ask yourself, is all of that for?
If you don’t get to do the meaningful things outside of work, that presumably work is intended to finance.
Scott Bursey (28:53)
That’s big. That’s huge. Especially when you’ve already got the resource in place.The next move can either compound things, Bryce, or create chaos, depending on how you play it. Now, I know a lot of our audience is either earlier in their journey or looking to level up. And I think they’d benefit from hearing this. When it comes to building relationships and growing your network, what’s made the biggest difference for you?
Bryce Stewart (29:08)
Yeah.Well, I probably haven’t grown my network as much as I should have or would have if I was more ambitious. I do meet with other local real estate investors and there’s a meetup locally that I go to which has been great. You tend to absorb little ⁓ snippets of wisdom from other investors ⁓ that you interact with. It can be stuff like ⁓ somebody’s got their
their ear to the ground on zoning changes. ⁓ It can be things like like best practices in managing a portfolio. It can be access to a wholesaler who really has a great system and is able to find you ⁓ discounted deals ⁓ compared to what you’ll find on market. But not always, this deal that I just bought recently is I bought it off the MLS.
I managed to negotiate decent terms. was by no means a home run, but I was able to bring an all cash offer on this duplex that I just bought and get a little bit of a discount. But it’s not, I’m not grabbing it at a huge discount. I’m looking at, this is something I wanna own, manage, benefit from the depreciation on, and then the cash flow, which will improve if interest rates drop.
And then ultimately will be something that I can maybe sell to one of my daughters when they are done with college or in their employment career and give them a way to begin to take the same ⁓ path towards building assets that my wife and I did when I was a teacher. So I was looking and I liked it. It was a duplex that I liked. I liked being in it. It looked nice. It’s somewhere I would want to live if I was young and single again. And so it may be something that my daughters will want to own as an asset as well.
Scott Bursey (31:24)
That’s awesome. Everyone says provide value. But when you were starting out and didn’t have a huge bank account or a massive portfolio, what was your currency? How did you actually get the attention of the heavy hitters?Bryce Stewart (31:42)
Gosh. ⁓ Well, I don’t know that I did ever get the attention of the heavy hitters in terms of anything that ended up ⁓ being huge. So like I’ve never developed a gigantic multifamily property. not, I don’t even really know how to do that. ⁓ That hasn’t been my goal necessarily. Maybe it will be in the future. My goal was time freedom first.I’m in a position now where ⁓ if I decide to liquidate some of my portfolio, I have enough equity that I could begin to 1031 exchange and sell into some bigger and bigger assets. But my metric when I look at doing that is going to be the same as the metric that I described before. I have no desire to take more doors that become unprofitable for me or take on more doors that are going to take me away from the things that I want to do with my family.
So I’m in a great spot. could ride my current portfolio into the sunset and be perfectly happy. I don’t need to be regarded as a heavy hitter in my market. Sometimes I don’t want that. That’s undue attention. ⁓ But initially, what I did that was helpful, the currency that you spoke of, is ⁓ I made myself well acquainted with the agreement of sale in Pennsylvania, where I live.
so that the agents I was dealing with knew when I called them and asked them to show me a property, I was going to be somebody who could execute quickly and could make a deal happen. Like I said, my first couple of deals were FHA financing. And so that was, we were able to do that because we were willing to live in our investments. ⁓ So that provided that all we needed was like a 3.5 % down payment.
⁓ I found private money for a couple of our deals, initially family who gave me private money on just great terms. But even the family that extended private money to me had seen the execution on the stuff that we lived in and they saw that I had learned lessons, knew how to be a landlord, knew how to create value in a rental. ⁓ And so I was a good bet.
at the front end and then also paid off ⁓ as it was time to get out of the hard money as we went through it. I would say this too, another way that I got value was I got book recommendations from other real estate professionals. One of the ones that was huge for me early ⁓ was Rich Dad Poor Dad. That was actually the book that was given to me by that 23 year old.
who had lived in his own place. I read that and it opened up my eyes to, yeah, you can get ⁓ income from investments. And then a couple other great books. ⁓ One of them is called The Millionaire Fastlane by M.J. DiMarco. That’s a terrific book to give you perspective on making money in both real estate and other endeavors. He speaks on business generally, but the book is packed solid with great advice.
And then another great book was The E-Myth Revisited. So second edition of The E-Myth, the E stands for entrepreneurial. And that was a book that made me realize I was using all of my own time in my portfolio and that I needed to figure out a way to hire out either to employees or to vendors a way to get my own time back and not be somebody who just owned a job, but someone who owned assets that were delivering income.
Scott Bursey (35:30)
I can certainly appreciate that. Well said. All right, Bryce, before we wrap, if someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing currently, what’s the best way that they can contact you?Bryce Stewart (35:48)
Sure, I’ll give you my personal email. If you’re a listener to this and you’re desiring to get started or you would like to collaborate, especially in my market, which is something I have interest in, I have access to capital at this point that allows me to execute on good deals that are brought to me. So I already have people I’ve talked to who I said, hey, if you have a good deal and you can’t take it down and you need a capital partner, I can be that. A few people have taken advantage of that.But yeah, if that’s you and you can bring me a good deal in my market, awesome. If you have some questions about how to get started yourself, I’ll do my best to get to it. I do have a lot of ⁓ inbound, so sometimes I can’t get to it right away. But I’ll give you that email address. It’s Bryce, which is B-R-Y-C-E W. Stewart, which is S-T-E-W-A-R-T at yahoo.com. Reach out to me if you want to connect. And I’m sure you can put it in the show notes as well.
Scott Bursey (36:43)
Perfect. Well, listen, Bryce, I appreciate your time, your story and your perspective. We need more people in this space who are doing it the right way. Thanks again for being here. And for those of you that are tuning in, if you got value from this, make sure you’re subscribed. We’ve got more conversations coming up with operators just like Bryce, who are out there making businesses thrive.building real businesses and executing. We’ll see you in the next episode, everybody.
