Carl and Mindy Jensen have experimented with a variety of investment strategies, from picking stocks and buying index funds to investing in mobile home communities and distilleries.
They've made a lot of money over the past decade. They built his $5 million net worth and consider himself financially independent, according to screenshots seen by Business Insider showing details of their investment accounts. Carl quit her software engineering job in 2017, and Mindy works part-time as the host of her BiggerPockets podcast.
In the real estate industry, the Jensens have had much success with residential conversions, specifically “live-in conversions,” where people buy a home, renovate it while living in it, and then resell it.
“The good thing about this strategy is that you need a place to live,” Carl says. “If we had bought another house, we would have been in a much more dangerous situation because you're just putting money into it, whereas we're just paying the mortgage on the main house. So.”
The Colorado-based couple is completing their eighth live-in relationship. They estimate that during his first seven flips he made a profit of just over $1 million.
Relocating can be lucrative, but there are two major trade-offs. One is that you live in a construction zone. “It's a pretty tough way to live,” Carl said. “We've had some bad times.”
It also takes time and effort. Carl recalls that when he was doing DIY house flipping, he was putting in 80 hours a week while he worked full time. “It made us rich, but I don't want to do it again,” he admitted.
Now that the Jensens are in their early 50s, they are generally moving away from flipping.
“We always keep an eye on the real estate market,” said Mindy, who is also a real estate agent. “I'm always looking for the next bargain, but I don't have any plans for the next live-in property because we're older and it's a lot of work.”
Moving to a more passive real estate strategy: private lending
The Jensens began experimenting with private financing in 2016. Currently, this is one of their favorite investment strategies because it is relatively passive and generates high returns.
They lend money to other real estate investors, for example to repair homes, and earn interest on those loans.
“We set the rates, and there are some rules to it,” Karl said. “For example, you can't charge super low prices or the IRS will consider it a gift.”
There used to be a 10% fee, but due to price increases, there is now a 12% fee.
“Private loans produce such good returns that it's hard to say, 'No, I don't want to take the easy money. Let's start all over again as a live-in,'” Mindy said. “But we also think it’s important to keep in mind that the economic climate is very different now than when we started doing live-in flips, which means you can still make money with a live-in flip. If you have more time than money, it can be a very great way to turn your home into an investment.
Starting a personal loan requires capital and a network.
Carl Jensen and Mindy Jensen stand in front of the bullring on Wall Street in New York. carl and mindy jensen
The Jensens are using their retirement funds to make these deals.
“We were able to roll all of our 401(k) funds from our past 401(k) into a self-directed standalone 401(k), which allows us to make these loans through the 401(k). or invest in real estate. Not everyone can do that without self-employment income,” Mindy explained. “But we've been investing for a long time, so we had quite a pile of cash in our 401(k).”
The first borrower they worked with was one of Mindy's colleagues at the time.
“He reached out and said, 'I'm looking for X amount of dollars in three months, so I'll give you 10 percent interest,'” she said. “He paid it back within the set deadline and then did it again. Tell your friends who are real estate investors that we have money they can lend you. ”
They said as of April 2024, they owed $658,000 in two separate loans. They are careful about who they work with.
“We loan the person as much as the deal,” Mindy said. “If a stranger emails me and says, 'Can you lend me some money?'” The answer is simply no, because I don't know you. ”
They have confidence in the person they are lending money to, saying, “That's the most important thing in lending money: lending money to someone who will repay you.''
