29 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

   • Hey Dom!! Thanks bro! Phantom Passive Income!! I love that!!

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!!

6. Nice work and great progress on building up your portfolio. Do you think the property management is worth the expense? I’ve considered this same thing in the past, but was unsure if it would be worth the additional cost.

   • 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.

7. 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.

8. The best part about it is $0 to $3k takes way longer than $3k to $6k. Now that you are pocketing $3k a month, it only takes half a year to save enough from cash flow alone to get another property!

   I like to think of it as a snowball gathering mass. The bigger the snowball gets, the more snow it gathers on each roll!

   • Ah that is music to my ears!!

9. 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.

   • 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.

10. Great progress! You’re an inspiration!
    We’re planning a move back East to be able to afford multiple properties. Once the little ones are a bit older I should have a little more time and energy and can consider buying a turnkey in our target area to get the ball rolling!

    • 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.

11. Exciting stuff, Alex! Love seeing your progress – definitely an inspiration for those of us striving to increase our own passive income.

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

12. 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?!?! 🙂

    • 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.

13. 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.

14. Nice work! I like the way you share with everyone how you earn money in details and these graphs just make sense everything! Keep it up <3

15. I love reading posts like this, you’re achieving your dreams! Well done you ?

16. You are a great inspiration. I like how open an honest you are with your income reports