Karl and Mindy Jensen have tried 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 together over the past decade: They've built up a net worth of $5 million, according to screenshots of their investment accounts viewed by Business Insider, and consider themselves financially independent. Carl left his job as a software engineer in 2017, and Mindy works part-time as a podcast host for BiggerPockets.
In real estate, the Jensens have had great success flipping homes, specifically buying a home, renovating it while living in it, and then reselling it.
“The beauty of this strategy is that we need a place to live,” Karl says. “If we had to buy another home and flip it as quickly as possible, we would have been in a much riskier situation because we'd be putting money into it, whereas we're just paying a mortgage on our main home.”
The Colorado couple is finishing up their eighth live-in property flip, and estimate they've made just over $1 million on their first seven flips.
Live-in flipping can be lucrative, but there are two big trade-offs. One is that you'll be living on a construction site. “It's a pretty tough life. There have been some tough times,” Karl says.
It's also a time-consuming, labor-intensive job: Karl recalls working 80-hour weeks while flipping houses as a DIY project while also working a full-time job. “It made me wealthy, but I'd never do it again,” he admits.
Now in their early 50s, the Jensens have moved away from flipping property.
“We're always keeping an eye on the real estate market,” says Mindy, who is also a real estate agent, “I'm always looking for the next good deal, but we're not planning on re-living in the house again as it would be a lot of work as we're getting older.”
Moving to a more passive real estate strategy: private lending
The Jensens began experimenting with private lending in 2016, and it's now one of their favorite investment strategies because it generates relatively passive, high returns.
For example, you could lend money to other real estate investors to renovate their homes and earn interest on the loans.
“We set the rates, and there are some rules to it,” Karl points out. “For example, the rate can't be extremely low, or the IRS will consider it a gift.”
Previously, the fee was 10%, but due to rising interest rates, it is now 12%.
“Private financing can produce great returns, so it's hard to say, 'No, I don't want easy money, let's do live-in flips again,'” Mindy says. “But I'm in a much different financial situation now than I was when I first started live-in flipping, and I think that's an important point. You can still make money with live-in flips, and if you have more time than money, it can be a really great way to turn a home into an investment.”
To start private lending, you need capital and a network.
Karl and Mindy Jensen standing in front of the Wall Street Bull in New York. Karl and Mindy Jensen
The Jensens are using their retirement savings to make these deals.
“We were able to roll all of our past 401(k) funds into a self-directed solo 401(k), which allowed us to take out loans through the 401(k) and invest in real estate, which isn't an option for everyone; you need self-employment income,” Mindy explains, “but because we'd been investing for so many years, we had quite a bit of cash saved up in our 401(k).”
The first borrower they worked with was one of Mindy's coworkers at the time.
“He reached out and said, 'Hey, I need X amount of dollars for three months, and I'll lend it to you at 10% interest,'” she says. “He paid it back within the specified time frame, then did it again. It turned out we had other friends who were investing in real estate and needed financing right away, so we let our real estate investor friends know we had the money to lend them.”
The company said it had lent $658,000 across two loans as of April 2024. The company is being careful about who it does business with.
“We lend to them as much as we trade,” Mindy says. “If a stranger emails us and says, 'Hey, can I borrow some money?' the answer is simple: no, because we don't know you.”
They have confidence in the people they lend to, “and that's the most important part of lending money: lending to people who will pay you back.”