Business Management

3 Smart Ways to Make an Extra $1,000 a Month

Expertise: Landlording & Rental Properties, Personal Development, Real Estate News & Commentary, Real Estate Investing Basics, Business Management, Flipping Houses, Mortgages & Creative Financing, Real Estate Deal Analysis & Advice, Real Estate Wholesaling, Personal Finance, Real Estate Marketing, AskBP
528 Articles Written
hand puting coins into jug glass for saving money finance and accounting concept

What would YOU do with an extra $1,000 a month in your bank account?

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

Around BiggerPockets, you’ll hear a lot of stories of “big success.” Someone just flipped a house and made $100,000. Someone just bought a 300-unit apartment building. Someone just crossed the threshold of a million dollars in net worth.

These are awesome and inspiring stories, but if you are a newer investor, these goals might seem unattainable.

Today I want to share some strategies for making money investing in real estate, but rather than explore the best ways to make millions in real estate, I want to explore some ways to simply make $1,000.

As I go through this post, keep that first question I asked earlier in your mind: what would YOU do with an extra $1,000 a month in income? Also understand that none of this is “quick” or “easy.” This will take some work. But if an extra $1,000 would change your life, then keep reading.

And if you have family or friends who would benefit from earning an extra $1,000 a month, do me (and them) a favor and share this on your Facebook wall!

With that, let’s get to it.

(Note: below I give a lot of “numbers” and example deals. Understand that every real estate market is different, and you might think these numbers are absurdly high or absurdly low, depending on where you live. Try not to focus on the number as much as the principle behind the number.)

3 Ways to Make an Extra $1,000 a Month Through Real Estate Investing

1. House Hack Your Way to $1,000

House Hacking is a term I use a lot to describe the process of combining your personal, primary residence (the house you live in) with your desire to build wealth through real estate.

There are several ways to “house hack,” and they all can work if you do them right. Let me give you a few scenarios.

First, there is the “rent-hack” scenario. You rent a house or apartment and rent out the extra bedrooms to some roommates. (I did this in college before I knew anything about real estate investing!) Then there is the “live-in flip” — which I also did, right after college. But the technique I want to spend the most time on right now is the “small multifamily house hack.”

The small multifamily house hack is the process of buying a small multifamily property, either a two, three, or four unit property, and living in one unit while renting the other units out.

Let me give you an example of how a person could earn an extra $1,000 a month this way.

House Hacking Example

Jeremy found a $315,000 fourplex located twenty minutes outside Minneapolis. He purchased the home using an FHA loan, which requires just a 3.5% down payment. Including closing costs, Jeremy comes to the closing table with just over $15,000. His mortgage payment, including taxes and insurance, ends up costing him $1,600 per month. Add water/sewer/garbage/vacancy/maintenance to that, and he's at $3,000 in expenses.

He lives in the basement apartment, a nice 2-bedroom unit, while renting the other units for $1,100 a piece for a total monthly gross income of $3,300.

Jeremy is now getting paid just under $300 per month to house hack this property.

“But Brandon,” you say, “that’s not $1,000 a month!”

Jeremy's sample property using the BP Rental Property Calculator at BiggerPockets.com/analysis

Jeremy’s sample property using the BP Rental Property Calculator at BiggerPockets.com/analysis

Patience, young Padawan.

You forget one important thing: Jeremy is now living free. Jeremy was paying $700 a month before in rent at a crappy apartment and now lives for free.

Check out the PDF on the right, which shows the breakdown of the numbers as run through the BiggerPockets Rental Property Calculator.

Jeremy now has an extra $700 per month in saved rent and $300 a month in cash flow for a total of an extra $1,000 per month. Plus, he’s building equity, has a hedge against inflation, and is learning how to be a landlord/investor all at the same time. Plus, when Jeremy decides to move out, he can rent his unit out for $1,100 a month also and bump his cash flow on that property up to $1400 a month.

Not too bad for Jeremy.

2. Wholesale Your Way to $1,000 a Month

For those unfamiliar with the real estate twist on “wholesaling,” let me explain.

Wholesaling is the process of finding a great real estate deal through hustle and hard work, signing a legal contract to purchase that property, and then selling that contract to another investor who will actually be the one buying it.

(It’s a bit more complicated than that, but do a quick search around BiggerPockets and you’ll find a lot more info, or check out The Book on Investing in Real Estate with No (and Low) Money Down for an entire 1/3 of the book dedicated to the art of wholesaling.)

Now, how can a person make an extra $1,000 a month through wholesaling?

Let’s look at an example. In this example below, we’ll be looking at how direct mail can help a person achieve that goal.

Wholesaling Example

Lori decided to become a part-time wholesaler to earn some extra income and decides that of all the different methods a person could use to find deals, direct mail would be the most sustainable for the long term.

Lori prints out 1,000 letters printed on blank white piece that simply say, “I would like to buy your house for cash. If you are interested in selling, please give me a call at…”

She then sends that to a list she ordered on ListSource.com for out-of-state owners who had owned the property for more than 10 years.

All in all, with the printing, the stamps, the paper, and buying the list, Lori spends $1,000 to send those 1,000 letters.

Within a few days, the calls start coming in.

Lori gets 4% of people to call her back about, so she talks with 40 people.

Of those 40 people, one of those who calls is Elmer. Elmer owns a single family home that needs a ton of work, but needs to sell quickly, and he has no money to repair it.

Lori does some quick “70% Rule Math” and sees the following:

  • The After Repair Value is $125,000
  • x 70% (for the 70% rule) leaves her with a value of $87,500
  • She estimates the home needs $25,000 in work, leaving her with $62,500
  • She wants to make $2,000 gross on the wholesale deal, leaving her with $60,500

Lori offers Elmer the $60,000, and he accepts. She then talks to a local house flipper who agrees to pay $62,500 for the deal.

At closing, Lori ends up with a check for $2,000, of which $1,000 she spent on direct mail letters.

Lori simply repeats this process over and over every month to make an extra $1,000 per month in cash.

(P.S. In reality, since Lori knows she can make $2,000 in revenue for every $1,000 she spends on marketing, she would very quickly start to ramp up her marketing budget until she was spending tens of thousands of dollars a month. But if all she wanted was $1,000 a month, this works too!)

3. Flip Your Way to $1,000 per Month

Finally, let’s talk about house flipping.

The television shows have glamorized this industry and “easy money,” but flipping is anything but that. However, for those dedicated to learning the business of house flipping, incredible income can be earned.

We don’t want to talk about incredible income, though. For the purpose of this article, we just want to earn an extra $1,000 a month. So how do we do that?

With flipping, that $1,000 is going to be “averaged” over the course of a year, since no flipper in their right mind would flip one house every month just to make $1,000 per flip. Instead, to earn $1,000 per month in extra income, a flipper would only need to flip one home per year and make a $12,000 profit on that flip.

Here’s how.

House Flipping Example

Hal just finished reading J Scott’s amazing book, The Book on Flipping Houses and is excited to get started on his first flip. However, Hal doesn’t want to quit his job and become a full time flipper; he just wanted to earn a little extra cash each month to pay for private school for his six-year old daughter.

Here’s how he did it.

Hal looked around for months to find the perfect deal. He analyzed deals daily using the BiggerPockets House Flipping Calculator, but couldn’t find a good enough deal. Until finally one of his Short Sale offers went through.

www.biggerpockets.com_flip_calculator_results_25106.pdf?c=1420228566-1

Hal’s sample property using the BP House Flipping  Calculator at BiggerPockets.com/analysis

Hal runs the numbers (you can see his BiggerPockets House Flipping Calculator analysis by clicking the image to the right) and moves forward on the flip.

The home was in terrible condition, located on a nice street about 20 minutes away from Hal's work. He analyzed enough comps to know that the home would sell for around $225,000, but it needs $45,000 worth of work (as provided in a bid from a local reputable contractor).

His offer is accepted at $132,000.

After 94 days, the home is sold for $225,000, and Hal walks away with a check for $24,453.42.

It wasn’t easy, and it wasn’t super quick. But he had done it.

Hal decides that he’ll continue flipping, but only do one project every year or two. This way, he can ensure that he only buys INCREDIBLE deals that will get him the extra income he needs.

After all, $24,000 in profit every two years works out to $1,000 a month in extra income.

What About You?

I started this article with a simple question: What would YOU do with an extra $1000 a month in your bank account?

A thousand extra dollars could mean more freedom from your job, more time home with your kids, more vacations, a nicer car, or one of a million other things.

Or maybe $1,000 is simply a good starting point, a “quick win” goal to help you launch your much larger real estate ambitions?

Whatever reason you may have for making an extra $1,000 a month, there is one thing I know: it could change your life.

Hopefully this post has given you just a few ways that YOU could make that happen in your life. This list is FAR from comprehensive, and there are hundreds of ways to make money with real estate. If you have any other suggestions, I hope you’ll share them below in the comments!

Finally, if you appreciate this post, do me a favor and share this on your favorite social media channel!

Thanks and I’ll talk to you next week!

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He began buying rental properties and flipping houses at age 21, discovering he didn’t need to work 40 years at a corporate job to have “the good life.” Today, with nearly 100 rental units and dozens of rehabs under his belt, he continues to invest in real estate while also showing others the power, and impact, of financial freedom. His writings have been featured on Forbes.com, Entrepreneur.com, FoxNews.com, Money Magazine, and numerous other publications across the web and in print media. He is the author of The Book on Investing in Real Estate with No (and Low) Money Down, The Book on Rental Property Investing, and co-author of The Book on Managing Rental Properties, which he wrote alongside his wife, Heather, and How to Invest in Real Estate, which he wrote alongside Joshua Dorkin. A life-long adventurer, Brandon (along with Heather and daughter Rosie) splits his time between his home in Washington State and various destinations around the globe.

    Joaquin Marte from Philadelphia, Pennsylvania
    Replied over 4 years ago
    Great blog brad keep up the good work God Bless
    Brandon Turner Investor from Maui, HI
    Replied over 4 years ago
    Thanks Joaquin! I appreciate it!
    Jonna Weber Real Estate Agent from Boise, ID
    Replied over 4 years ago
    Nice! The coolest part about all of these ways is that each of them gives you valuable experience in the investing/real estate world if that is what you are after. Delivering pizzas may get the job done, but it isn’t going to stretch your investing mindset and knowledge like these will. I’ll add getting a RE license as another way to generate that $1,000 a month. A few transactions can definitely get the job done.
    Brandon Turner Investor from Maui, HI
    Replied over 4 years ago
    Hey Jonna, thanks for the comment! Yeah, I actually was going to make this post “5 Ways” and include being an agent, but decided it was long enough! But you are absolutely right. Maybe I’ll follow this up with a “3 MORE Ways to Make $1000 a Month Through Real Estate” ! 🙂
    Sharon Barry Investor from Red Bank, New Jersey
    Replied over 2 years ago
    Thank you Brandon for this information. Extremely helpful. My computer does not do that well web-NARS, so is very valuable to me . Thanks again
    Steve Lemke Investor from Sunnyvale, California
    Replied over 4 years ago
    Here’s another way to generate $1000/month which I personally implemented in 2014: Refinance! If you own real estate, whether your primary residence or investment property (or both), take a close look at every loan you are currently paying on, and ask yourself if you should consider refinancing (or simply paying off in the case of a high-interest second mortgage or low-balance first). I had several 30yr fixed rate loans that were at 7% (or worse), but despite a perfect payment record and great credit, I was unable to refinance any of them because I had more than ten financed properties. So, in 2014 I resolved to fix that by selling two rental properties, after which I was finally able to refinance my other properties. A few of my loans qualified for low-cost HARP refinancing, but several others did not. In some cases I had to bring cash to closing in order to lower the LTV (loan to value), but in every case I analyzed the return on that invested cash (including the closing costs) and calculated that every dollar I spent refinancing will earn more than 10% in improved cash flow and in many cases closer to 20%. Considering that some of my old loans were interest-only loans, I also avoided payment increases down the road (due the loan amortizing at 10 years). Now my tenants are paying down all of these mortgages (instead of just paying the bank interest each month). Thus, another factor to consider is not only improving your monthly cash flow, but also increasing your overall annual principal reduction. Finally, I also refinanced my own home to consolidate a variable rate equity line into a new fixed-rate mortgage at a (combined) lower rate to further improve my monthly cash flow and protect against future rate increases on the equity line balance. I hope this helps other BP buy and hold investors to improve their own cash flow by $1000/month.
    Kevin Andrews Investor from Seekonk, Massachusetts
    Replied over 4 years ago
    Great article Brandon. I’m currently looking for ways to build up some money to get started in real estate investing and these are great ways to get started with little money down. Also great point made by Steve Lemke on refinancing your existing mortgages and putting money back in your pocket that way.
    Kevin Edwards Investor from Houston, TX
    Replied over 4 years ago
    Great post, Brandon! Currently researching areas to start a wholesaling marketing campaign and this was good motivation.
    Brandon Turner Investor from Maui, HI
    Replied over 4 years ago
    Nice Kevin! Best of luck!
    Daniel Morgan Real Estate Investor from Springfield, Massachusetts
    Replied over 4 years ago
    Wow great post Brandon, vsry motivated to hit the ground running Thanx
    Rob Lucey Investor from Colorado Springs, Colorado
    Replied over 4 years ago
    We found a great deal on a bank-owned house in Galveston that needed loads of work. We could have tried to wholesale it for that quick $1,000 profit. Or we might have just flipped it for a $20k gain. Or it would have made a decent long-term rental property for at least $1,000/month after expenses. We went with a fourth option, since it’s located in a popular tourist destination area: vacation rental. It required us to furnish the place (hello Craig’s List and estate sales!) and, since we live about 90 minutes away, we had to find a reliable cleaner (who happens to live next door) and handyman (three doors down). But the upshot is that we bumped our gross rent receipts up to $3k/month. After utilities, taxes and maintenance expenses, we still cleared well over $2k/month in just our first year. The best part? When it isn’t rented, we have a great island retreat to use ourselves!
    robert
    Replied over 4 years ago
    How did Jeremy qualify for the mortgage if the expenses on the property are $3k / month? Considering he was just living in a ” crappy apartment ” paying what 600 – 700 a month.
    Jonathan Fowler Entrepreneur from Frisco, TX
    Replied over 2 years ago
    It’s a fourplex where the gross rents are roughly double what the mortgage payment is each month.
    Jeff Trevarthen Lender from San Jose, CA
    Replied over 4 years ago
    Such a great article Brandon. If you were just starting out, which one would you choose?
    Tracy Bruns from Miami Beach, Florida
    Replied over 4 years ago
    Thanks Brandon! I’m currently looking to buy my first small multifamily property, and this article helped give me that extra boost of motivation.
    Gary O
    Replied over 4 years ago
    I doubt that I ever become more than a newbie but I am always so amazed when an idea that I am considering comes along as a good idea. In that regard I am either in the right place or not acting fast enough or both. In any event it is good to know that I am following good newbie thinking. All of these things tell me that the smart money would get involved with people who present plans that you can see the reasoning behind. This group with bigger pockets seems to be people who have actually started something from the ground up. That is important to me because I hesitate to believe some advisers are even in the real estate business.. ??
    Damian Igbe from Cross Roads, Texas
    Replied over 4 years ago
    Great Advice, thanks Brandon!
    Eric D. Investor from Eagan, Minnesota
    Replied over 4 years ago
    Or, you could be like several potential RE investors I know and they ask me this, “If you find a property that I can make a quick $50K on, let me know”. Like I am going to let that one get away…
    Desmond Guy Real Estate Investor from Baltimore, Maryland
    Replied over 4 years ago
    yaz!
    Matt
    Replied over 4 years ago
    Let me preface this by saying I’m a complete newbie but I just dont see how a 300k mortgage can be paid with 1600$ after including taxes and insurance. Perhaps I need more guidance on how to properly assess these costs but I’ve spent maybe 6-7 weeks now, educating myself when I have time, so I can position myself for my first real estate purchase. I’ve spoken with several lenders about going the FHA route to purchase a multifamily unit and have excellent credit. The estimated mortgage payment I came back with on a 275k FHA Loan… FHA – 3.5% Interest Rate Down Payment 3.5% – $9625 Mortgage Insurance – $298.55 (Monthly) Taxes – $580.00 (Monthly) – Estimate Hazard Insurance – $150.00 (Monthly) – Estimate Principal & Interest – $1511.06 (Monthly) Total Monthly Payment – $2539.61 So…. where am I going wrong here? It can’t be taxes since even if we eliminated taxes from my real world example I can’t even come close to Brandon’s 1600$ target. Perhaps the comments aren’t the best place to ask but I thought it was relevant enough to the very first example that perhaps other people had the same question and wanted some additional info/guidance/advice. Maybe my problem is simply in the estimates I’m using/being provided or perhaps its all the lenders I’ve spoken to? I just don’t get it…. I can find a way make a good real estate investment for a multifamily home with a 1600$ mortgage, insurance & PMI expense. I can’t do it (at least in my area) for 2700$ Help!?
    Nathan W. from Alexandria, Virginia
    Replied over 4 years ago
    Matt: despite what Patrick weighed in with below, your numbers are accurate–he just did not take the time to actually read what you wrote. I noticed the same thing when I read the article, I just didn’t do the in depth math that you did. You are well on your way to understanding this–be sure to take the advice you are given here with a grain of salt sometimes, because a lot of people add their $0.02 with it being worth exactly that. Brandon may have meant that the $1,600 was just the Principal and Interest of the payment, and not the Taxes and Insurance and rolled the Taxes/Insurance into the operating costs inadvertently. Those operating costs were just a wag anyway for demonstration purposes, so it shouldn’t matter too much. Brandon has awesome posts but I have found more value in reading his posts as more of a concept to be understood than an actual “how to” guide. His posts get your creative juices flowing and leave the actual number crunching to you, which you seem to have a good knack for. Keep developing that and you will definitely find success as an investor. Understanding the numbers it he most important part of the game IMO.
    Matt Keller from Columbus, Ohio
    Replied over 4 years ago
    Appreciate the detailed responses Nathan. I was just a bit discouraged after reading the posts but I’ve come a long way since January. I spent a good deal of time on this post, which I think others that end up here may find very helpful. https://www.biggerpockets.com/renewsblog/2010/06/30/introduction-to-real-estate-analysis-investing/
    Patrick McMahon Investor from Parkland, Florida
    Replied over 4 years ago
    You’re not crazy because he’s NOT at $1,600 after all expenses. The last sentence said, “Add water/sewer/garbage/vacancy/maintenance to that, and he’s at $3,000 in expenses.” Your numbers are similar to his. Click on the graphic to see where his numbers differ from yours. The two big differences I see are that Brandon included a management fee (always good to include in case you move away and need to hire a property manager) but you included PMI. I don’t see PMI in Brandon’s numbers, but I’m in a hurry, so maybe I missed it. That would add a couple hundred dollars a month. Or maybe Brandon can get a 3.5% down loan without PMI because he has a ninja finance trick?
    Nathan W. from Alexandria, Virginia
    Replied over 4 years ago
    Wrong. You must surely have been in a hurry, because Matt’s numbers are NOT similar to Brandon’s, as you claim. I don’t know why you are bringing up the additional expenses, since Matt did not either. Matt was speaking purely about the PITI that Brandon esimated at $1,600/month (well PITI + the mortgage insurance that is obviously required when one only puts down 3.5%). Matt is absolutely correct in his numbers–I know we are all trying to help, but your advice was absolutely awful because you did not even bother to process what Matt wrote before adding your $0.02, which was worth exactly the price of admission.
    Mary anne Raymond from Valrico, Florida
    Replied over 4 years ago
    I think this site is the best site for a newbie investor as myself. I haven’t done anything yet as I am studying everything I can get my hands on. When I get ready to take that leap, I will have this site to thank for it. Its helpful in the articles and the people that are associated with it. No one is trying to sell you anything which is what I love. Too many times I find some incomplete information and to get the rest of it, it costs money. I get it that those guru types are trying to make a living but for me, I can’t afford them. Just wanted to throw that thanks out there! 🙂
    Joshua Dorkin from Denver, CO
    Replied over 4 years ago
    Hey Mary Anne – I’m glad you’re a fan of the site and I definitely encourage you to jump in on the forums. As a newbie, if you haven’t already checked out our Ultimate Beginner’s Guide at https://www.biggerpockets.com/ubg – I think you should. Good luck!
    Jim Jones Real Estate Investor from Los Angeles, California
    Replied over 4 years ago
    Great post Brandon! I’m very familiar with the first example you gave, since that is something that I did myself. I bought myself a triplex with and FHA loan and I was able to kiss renting good-bye! This is a great move for anyone who is looking invest in real estate and save money. Keep up the great work Brandon!
    Juan Carlos Flores Investor from Rockwall, Texas
    Replied over 4 years ago
    great post is something about paper flip? do any one can explain me a detail about how to do paper flip?
    Holden Latimer Investor from Salt Lake City, Utah
    Replied over 4 years ago
    Thanks for the blog post Brandon! Although I hadn’t heard the term “house hack” before begging on my first investment journey, that was exactly my strategy. My wife and I bought our first investment property, a 4-plex in Salt Lake City, about 6 months ago for $312,500. We focused on a value-add strategy to renovate the units and raise rents closer to market premium in the area. With renovating two units so far, we have raised gross rents by about 18%. It has been a lot of work but we are now cash flowing over $1000/month (includes savings on rent) and are just starting an FHA refinance that will lower our PMI and interest rate and should increase our CF by at least $200/month. While this rout is not quick and easy, it is definitely worth it!!
    Todd Smith Real Estate Investor from San Angelo, Texas
    Replied over 4 years ago
    When you do wholesaling are you going to be paying a big capital gains tax?
    Todd Smith Real Estate Investor from San Angelo, Texas
    Replied over 4 years ago
    When wholesaling do you have to pay capital gains tax?
    Amy Brocious from Butler, Pennsylvania
    Replied over 4 years ago
    Thanks for the great, positive article! I am a newbie sponge, taking in everything I can and I love that you broke this huge scary process into a little “bite sized” piece to start with!! 🙂 $1000/month would be life changing for us, and it seems so doable! 🙂 Thanks!!
    Amy Brocious from Butler, Pennsylvania
    Replied over 4 years ago
    Thanks for the great, positive article! I am a newbie sponge, taking in everything I can and I love that you broke this huge scary process into a little “bite sized” piece to start with!! 🙂 $1000/month would be life changing for us, and it seems so doable! 🙂 Thanks!!
    Natas
    Replied about 4 years ago
    The best way to make another $1000 a month is working for a job that gives you more and more money over time. Selling properties is a full time job whatever you try to demonstrate here and making $1000 month for all the time searching / analysing / talking with clients, writing/ sending documents , etc. etc. is not worth it. I earn $120 /hour doing my job and I don’t do any steps to get contracts they all come to me. I receive like 400 offers by week and reject all of it or absolutly don’t care until I got the real deal and motivation to work again. I work 3 months a year and do whatever I want the remaining of the year. You want to make money ? Go to school and learn how to do a job that gives you that. Don’t waste your time on lottery jobs like that. One day you gonna buy a property without any value at a high price and lose everything like the moron with his full hand playing poker thinking he cannot lose with this hand but that is not true. The cards are to often fake in that kind of games/jobs.
    Joyce Myers Investor from Grandview, Missouri
    Replied almost 4 years ago
    Thanks Brandon.Although I have experience with much of this I always enjoy articles from you and Allison and still something thee I learn.Keep up the good work. Joyce
    LaTeasha Hughes from La Vergne, Tennessee
    Replied over 2 years ago
    Great article!! Thank you for posting this!
    Grant Delmonte Rental Property Investor from Washington
    Replied 19 days ago
    These are good ideas! Thanks for sharing!