How I made $3000 In Passive Income Last Month

how i made $3000 in passive income last month

I have been on a mission to become financially independent for a few years now and I am super excited to see the progress I am making.  I have made big life altering decisions to achieve this and it’s paying off as you will see below.

I finally am settled in enough to see what kind of impact has been made since choosing to uproot my life with my big move.   I  chose to move from Austin, TX to Indianapolis, IN 9 months ago for the sole purpose of being able to reach my financial goals faster.  How you might ask?  Well actually its really simple, Indy’s cost of living is far cheaper than Austin and the real estate prices are super affordable.   My plan is purchase as many rental properties as I can while I live in Indianapolis so that I can eventually earn enough passive income to be able to quit my dreadful day job!

Over a year ago while living in Austin I wrote my first real estate property passive income report in which I was making about $2000 straight cash flow from my rental properties.   This consists of the actual cash received after deducting actual expenses paid for the given month.   Over a year later and now living in the Midwest, I have increased my monthly cash flow by over  $1,400 per month.   That will  equate to about an extra $17k in my pocket  this year for making this life altering move.   With an extra $17k, I can use that as down payment and get another rental property.   Which will allow me to reach my goals even faster.  Pretty cool huh?

I made$3000 in passive income last month!   Life cant really get much better then this!  Okay well maybe if I doubled my passive income then it would be better. 😉

The power of real estate investing really is a beautiful thing.    The purpose of this income report is to show you that generating passive income can be achieved by anyone.  If you are savvy enough to invest in the right kind of investments, make good decisions and do the right things, you too can generate passive income.   Just look at me, I am just a regular Joe Blow and I am doing it.   There is nothing special about me.  I don’t even have a bachelor’s degree, I grew up in a poor family and I barely even graduated high school to be honest.

Below you will see how I made $3000 in passive income last month.   I have broken down every single investment property I have and reveal how much actual passive income is being made by them.  I even break it down with calculated future expenses like repairs and vacancies.     When running numbers on investment properties, you should try to include estimated costs for future vacancies and repairs so that you can get a more realistic number on how the returns will look in the long run.  The graphs below includes these estimates.

 

 

 

 

Rental Property #1 (Austin, TX)Rental Property Passive Income Report

 

Income:
Rent Received:  $1300

Expenses:
Mortgage Payment:   $887.97
Property Mgmt Fee:   $0 (This is the only rental property I have that I self manage)
Repairs Made:     $0
Estimated Future Repairs (10%):   $130.00
Estimated Future Vacancy (5%):  $65

Total Actual Passive Income Received = $412.03
Estimated Monthly Cash Flow (Minus future repairs and vacancy)  = $213.03

To see more details and info on rental property #1 click here.

 

 

 

 

 

Rental Property #2  (Indy)rental property cash flow made

Income:
Rent Received:  $895

Expenses:
Mortgage Payment:   $358.09
Property Mgmt Fee:   $89.50
Repairs Made:     $0
Estimated Future Repairs (10%):   $89.50
Estimated Future Vacancy (8%):  $71.60

Total Actual Passive Income Received = $447.41
Estimated Monthly Cash Flow (Minus future repairs and vacancy)  = $286.31

-To see more info on this property click here.

 

 

 

 

Rental Property #3 (Indy) investment property passive income report

Income:
Rent Received:  $935

Expenses:
Mortgage Payment:   $358.09
Property Mgmt Fee:   $93.50
Repairs Made:     $0
Estimated Future Repairs (10%):   $93.50
Estimated Future Vacancy (8%):  $74.80

Total Actual Passive Income Received = $483.41
Estimated Monthly Cash Flow (Minus future repairs and vacancy)  = $315.11

-To see more info on this property click here.

 

 

 

 

Rental Property #4  (Indy) investment property cash flow chart

Income:
Rent Received:  $795

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Expenses:
Mortgage Payment:   $0    (Paid cash for this one)
Insurance:   $52
Taxes:   $137
Property Mgmt Fee:   $79.50
Repairs Made:     $0
Estimated Future Repairs (10%):   $79.50
Estimated Future Vacancy (8%):  $63.60

Total Actual Passive Income Received = $526.50
Estimated Monthly Cash Flow (Minus future repairs and vacancy)  = $383.40

-To see more info on this property click here.

 

 

 

 

Rental Property #5 (Indy) rental property cash flow passive income

Income:
Rent Received:  $950

Expenses:
Mortgage Payment:   $0    (Paid cash for this one)
Insurance:   $52
Taxes:   $147
Property Mgmt Fee:   $95
Repairs Made:     $0
Estimated Future Repairs (10%):   $95
Estimated Future Vacancy (8%):  $76

Total Actual Passive Income Received = $656
Estimated Monthly Cash Flow (Minus future repairs and vacancy)  = $485

 

 

 

 

 

 

 

Rental Property #6 (KC) how i made $3000 in passive income

Income:
Rent Received:  $750

Expenses:
Mortgage Payment:   $288.09
Property Mgmt Fee:   $75
Repairs Made:     $0
Estimated Future Repairs (10%):   $75
Estimated Future Vacancy (8%):  $60

Total Actual Passive Income Received = $386.91
Estimated Monthly Cash Flow (Minus future repairs and vacancy)  = $251.91

-To see more info on this property click here.

 

 

 

 

 

Investment #7 – Performing Note real estate investment note

Income:
Payment Received:  $1150

Expenses:
Mortgage Payment:  $1045.01
Note Servicer: $16

Total Actual Passive Income = $88.99

 

 

 

 

 

 

Total Actual Passive Income for March 2017:  $3001.25

Total Estimated Cash Flow Income for March 2017:  $2418.80

Fortunately none of my investment properties had any repairs this prior month so these numbers are as good as they are going to get for now.  It is not uncommon at all for these rentals to go months and months without repairs.   I think I have only had a total of 2 repair calls this year alone on all my properties.    Which is great and part of it is because my property manager screens the tenants really well.   I love my property manager!

As you can see, I am well on my way to reaching financial freedom.  The only problem is that I feel like I need to at least triple this income to really be content and not alter my life in any way.

Tripling this passive income stream is very achievable and I think I can reach that goal in just a few short years.  I am already on the hunt for a new rental property right now as I write this and if I can somehow manage to but two this year, I will be in a great financial position to achieve my goals.

On top of that, since I moved to Indy, I lowered my primary mortgage from $1102 per month down to $440 per month.  That is a $661 monthly savings I am seeing every month.  All in all, with the added passive income and mortgage savings, I am seeing an extra $1400 in my pocket every month from making this move.  I can’t even begin to express how happy I am with moving to Indy and my wife and I are truly enjoying living here.

Total Increased Passive Income Per Month Since Moving to Indianapolis:  $1462

 

As you can see, if you are able to make a big life changing move like this, it’s very possible to drastically change your finances for the better.   After all, passive income is the key to happiness!

Have you considered making big changes to increase your passive income?



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Cash Flow Diaries

28 Comments

  1. Nice work, dude!

    You have made some incredible progress since you broke into the PF scene. I like to call the cash flow savings “phantom passive income”. I think of it as an invisible dividend.

    Cheers,

    Dom

  2. Glad to see your doing so well with the properties. Curious, where did you come up with your maintenance numbers? Is that capex and small repairs? Have you calculated out the cost of those larger capex items like roofs and furnaces into your budget?

    Jason

    • The maintenance is just an estimate that Im setting aside to handle repairs and hopefully capex. All my properties have new big mechanicals including roof/hvac so im not expecting big capex costs anytime soon. But I always do keep extra cash on the side available just in case for emergency. Other then that, its always just going to be an estimate trying to predict the future.

      What I would like to do in time is calculate actual returns as each year goes by and maybe 20 years from now, I will have a good indication of what kind of returns these things will get through time.

  3. This is awesome! I’m curious if your investing strategy has changed much from the first rental to the last? Do you have any plans for buying multi-family or are you staying with single family?

    • Hi Jennifer!

      Oh yeah it has definitely evolved through time. At first I bought locally through the MLS, then I was forced to buy out of state turnkeys and now im buying locally from wholesalers. Depending on what the market is like and where I live appears to be the driving force of how I am investing in real estate. I will continue adjusting as needed in the coming years if I need but at the end of the day, I just want cash flowing rentals! Appreciation of course would be just icing on the cake.

      For now im sticking with single families. Im not a big fan of multi family in Indy where I live now.

  4. Fantastic man. Yeah if you can hit that $7.5k/month after repairs and vacancy you will be sitting real pretty. Best part about it all is it is tax advantaged to boot! $90k/year from a W2 job is nothing to sneeze at, but when you can make $90k with preferential tax treatment, you are living the high life.

    My wife and I have a medium term (5 ish years) plan to buy a mobile home park in the $500k range, performing at 10% with upside to be captured. We will quit our jobs and sell off our primary home and rental condo in the DC area (which should easily net us $300k) and move to the mobile home park for 1-2 years with a goal of improving operations and occupancy to possibly a 15 cap. Using the $300k from our home sales and reinvesting the cash flow back into the property for 1-2 years should allow us to pay off the mobile home park mortgage and have a $75k/year passive revenue stream. From there, we will put a manager in place (overlapped with our residency to train him up) and move to Panama and stretch our $75k/year much further than it would go in the US. Figure on a trip back to the US two times a year or so to check on our investment and visit family, leaving us with plenty of time to pursue other passions or revenue streams.

    So I guess if you consider quitting dual 6 figure jobs to move to a mobile home park and then finally to a developing country to live on $75k/year, then I guess we are considering making big changes to increase (and extend) our passive income!

    • Nate I love you!! Man I love your plan and it makes me happy you have thought this out. I keep joking with my wife that one day we will move out of the country and I keep thinking central america. I say it jokingly but deep down inside I think I really want to do that.

      I think your plan sounds awesome. That will definitely be a huge life changing event to setup your financial success. Way more then what I did for sure. I applaud you my friend.

  5. Nice summary/update! Loving the bar chart visuals too. Considering how long (short) it took you to get to $3K, you’ll be doubling that in no time 🙂

    • Thanks Mike! Yeah i really like the bar charts too, took me awhile to figure out what kind of chart to use but I like how those turned out. Thanks and yes I hope I can double it in no time!!

    • Thanks DJ! I think having a PM all boils down to how hands on you really want to be with your properties. For me, my end goal is to make these rental properties as passive as possible so it makes sense for me to want a property manager. I personally do think its worth it especially when you find a gem of a property manager. Most PMs out there are crap I think.

  6. What is your cash reserve like? Also why are some of your vacancies 5% and others are 8? I used to own 7 rentals and I sold them all when then real estate market rebounded. Just own one gem the days. Great job, are you working full time or is this tour full time gig?

    • My cash reserve is pretty deep right now, I have like 100k cash but im also looking for a new rental property to use that with. I like to have at least $3k per property readily available at all times for emergencies.

      I used 5% vacancy only on one house, my Austin house because in the last 3 years of renting that house out, I have had zero vacancy and the rent market there is crazy hot. The 8%s are for my Indy properties which seems to be about average around here.

      Oh I have a full time normal job for now buy my long term goal is to build enough passive income so that I can quit that one day.

  7. Great work on those rentals! The market is so markedly different from my area in Florida though. It’s tough to find a lot of good cash flow properties because the rents out here are so high and there is so MUCH money. First time investors are pretty much stuck buying a turnkey off the MLS, so you’re looking at a $1000-1300/mo in just mortgage for a $1300-1500/mo rent.

    Fortunately for me, I’m a Realtor as well, so I network with a few guys that offer out off-market listings. Even the wholesalers though don’t have great buys though about 50% of the time.
    Cash Flow Celt recently posted…My First Trade Show and how I SurvivedMy Profile

    • Yep that is exactly what I experienced in Austin. Its a shame for those of you who really want to invest locally. Good luck with the search, i hope you find something good.

    • Thanks Jack!! That would be great if you did that. It sounds like it would definitely put you in a better financial spot and more opportunity.

    • Hi Brittney!! Thanks so much! Looking forward to our next Indy hangout.

  8. Totally impressed that you can handle being a landlord, especially with SO many properties. I’m 3 months in and totally over it! It’s done thru a management company and I’m able to make a tidy profit each month, but my tenants have frequent requests for things to be ‘better’ and I’m like for real? Where is your course on how to handle being a landlord?!?! 🙂
    Kristin recently posted…March Online Income ReportMy Profile

    • Haha, yeah I totally get that. I actually have one super high maintenance tenant in one of my rentals. Some of them can be so picky, at the end of the day, you just need to provide functional items and will just have to get used to telling them “no” on things and those one off requests where they just upgrades or improvements. It definitely sucks having to do that but just necessary I guess for that cash flow!! 🙂 Hope it works out for you Kristin.

  9. Great job! It is nice when you have a solid cash flow. My properties produce a bit more, (5x) but I also probably have more invested. It tales time to build the income stream, and soon you will have more than you need. Pay off a mortgage will help your cash flow a lot. Probably more than another property.

    Of course, Uncle Sam always wants his cut.

    • Hi NNL!

      I really do need to sit and do the math on if its smarter for me to start paying off the mortgages rather then purchasing a new rental. I think after my next rental purchase I might be able to start paying the mortgages down. Thanks for the reminder.

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