Business Management

How to Create Multiple Streams of Income in Real Estate

Expertise: Business Management, Mortgages & Creative Financing, Landlording & Rental Properties, Real Estate Investing Basics, Personal Finance, Real Estate Deal Analysis & Advice, Commercial Real Estate, Personal Development, Real Estate News & Commentary
228 Articles Written
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Pre-internet, information on real estate investing wasn’t as easily accessible. You could get an MBA or study real estate in college, but there wasn’t much out there for people like me who wanted to teach themselves—except for local real estate groups. As a new investor in need of financing, I decided to attend one of these meetings. Before I knew it, I was hooked.

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One meeting a month quickly turned into one main meeting a month with seven additional meetings at subgroups, traveling to other nearby meetings, and eventually even hosting a meeting myself. Needless to say, I’ve been to countless real estate club meetings, meetups, conventions, and pretty much every form of a real estate investor networking meeting you can think of.

I’ve seen many speakers, and some of them really had an impact—while most didn’t. The ratio is pretty staggering, though I don’t think I would take back all of those nights that weren’t fully memorable. You need the bad or the unappealing (to me anyway) to really know the good. Besides, there was always something I could learn from the bad speakers, even if it was just how not to present a topic. Out of those presentations that were good or even great, there are some that I still reflect on from time to time.

Recently, in working on another piece of writing, I re-stumbled upon an author and presenter I saw many years ago, a man by the name of Robert Allen. Allen was a bit old school, somewhere between an academic and a guru. He was more aligned with the likes of Robert Kiyosaki and Jack Canfield than your average speaker, and having been to so many meetings, perhaps I could tell.

Related: 4 Side Income Streams to Sustain You as You Pursue Real Estate Full-Time

He presented an idea that was new to me at the time—and may be new to you now—called “multiple streams of income.”

In his presentation and his aptly titled book Multiple Streams of Income: How to Generate a Lifetime of Unlimited Wealth!, he talked about strategies to improve your cash flow and expense management, really focusing on how to combine them to build serious wealth. What I gleaned most from his work was a method of evaluating all profit centers and figuring out ways to maximize them while at the same time turning expenses into assets.

Simple enough? Well, like most good things, it didn’t sink in for me right away either.

Upon seeing his presentation, I wasn’t sure how all this information was going to help me. It was only after reading his book and chewing on things for a while that I began to think how the concepts he taught could be applied in my life. Creating profit centers was one thing, but he also stressed that the ones we should be aiming for shouldn’t involve a lot of extra effort and work or a large number of employees.

At the time, I had been working as a part-time real estate agent and a full-time contractor, using my weekends and every bit of free time to build my rental portfolio. My idea of multiple streams of income before reading Allen’s book was probably just doing some contracting work for people who bought and sold properties through me. But after reading, I started to think about how I was doing my deals. After all, my personal involvement was only one piece of the puzzle.


Finding Additional Streams of Income

I realized how much I was losing in my previous mode of operation. For example, when I purchased a property or sold a property to someone else, I was giving away the title business. So, instead of losing out on that income, I decided to become a silent investor in a title company.

Next, I left the traditional real estate brokerage I was at (with the typical 50/50 or 60/40 split) and went to a 100 percent commission flat fee company. I started making more money every time I sold a property. I even started doing property management through a brokerage. The nominal flat fee charged by my broker would cover most of the paperwork, accounting, etc.

My specialty at the time was dealing specifically with real estate investors, especially ones that had properties in my area. Now I would get paid multiple times with each client while managing my own units.

When some referrals weren’t allowed to compensate me directly, we’d share expenses (i.e., marketing). I had a pretty large network from running a real estate investor group that branched into six different cities, in five different states. Before reading Allen’s book, I would just refer all my mortgage business, homeowner’s insurance, property management, and title business away to my colleagues without much thought. Then, I realized with almost the exact same amount of work, I could get paid every time I did it! How absurdly simple.

Taking it Further

I decided there must be more ways to increase my cash flow and my net worth. I started with financing. I realized with my growing portfolio, I had quite a bit of equity to leverage by using HELOCs (home equity lines of credit). With that capital, I started to buy more properties faster and to lend private money.  

There’s enough to say about that process to fill an article (see “Building Wealth: 10 Strategies for Successfully Managing Equity”). But in short, when I ask most people, “What’s the rate of return of the equity in your properties?” More often than not, I’m met with a blank stare, which usually means ZERO.

Well, if you could borrow that static money out and reinvest it at a higher rate of return than the HELOC rate, why not do it? I prefer to use it for short-term and liquid investments like lending private money or note investing, but I know many others who use it to invest in funds and hard real estate, among other things. My philosophy is: it’s your money, so why not use it?

Pursuing the Highest and Best Use

How could I decrease my taxes and insurance payments, yet still increase cash flow from my current real estate portfolio?

Sometimes I altered the financing to cash flow more. Sometimes I held paper when selling a property to increase my yield. But the biggest change was finding more potential cash flow within the properties I already owned—simply by making improvements. These improvements could include adding extra bedrooms and/or garages for additional rent.

(Or how can you tweak your business model? For example, a friend of mine who’s an HVAC guy now finances the installations of heaters he sells, and this financing of units has grown into a huge stream of extra money that he used to leave on the table.)

Related: Why Investors Should Create Multiple Streams of Income Within Real Estate

While I was renovating, I also decided to take a look at my property taxes. After checking with the neighboring properties,I discovered that there was an opportunity to have some of my properties reassessed. Sometimes it pays to do this because, in my case, it actually lowered my yearly property taxes. In turn, this decreased expenses that affected my bottom line. I also chose to reevaluate the homeowner’s insurance as well, and what do you know? I was overpaying compared to insurance offered by competitors. I still do this with my insurance every year, shopping the rates to different brokers and insurance companies. The list of these savings and profit centers for me actually goes on and on. I still continue to find new savings to this day.

It’s funny how you forget how much you’ve learned over the years—especially at my age. But I’m glad I went back and got a little refresher on Allen’s work. It reminds me that all those nights at real estate club meetings weren’t for nothing. People like Allen and many of those I read and saw speak over the years helped me save money and make extra income that, in turn, led to bigger and better investments. I’ll have to thank Mr. Allen for that someday. Hopefully, spreading the word about all of the quality information I learned over the years is a way of doing that.


How can you save taxes, increase cash flow, or better leverage equity? What is the highest and best use of your properties? What can you do to create more income channels?

Please share below!

Since 2007, Dave Van Horn has served as president and CEO of PPR Note Co., a $150MM+ company managing funds that buy, sell, and hold residential mortgages nat...
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    Glenn F. Rental Property Investor from Virginia Beach, VA
    Replied about 3 years ago
    “What’s the rate of return of the equity in your properties?” A: Being able to sleep at night and not being overleveraged
    Dave Van Horn Fund Manager from Berwyn, PA
    Replied about 3 years ago
    Good point, Glenn. Everyone has their comfort levels. I sleep well knowing my equity is being worked to the fullest, I access to capital with my HELOCs, and my assets are protected by debt. But I agree it’s not for everyone, to each his own. Thanks for reading. Best, Dave
    Bryan Mitchell Rental Property Investor from Columbus, GA
    Replied about 3 years ago
    Dave Great article. I think back to the days before the internet and see that things were different, but had advantages. One of these was all of the face to face personal engagements vice the virtual social interactions we see today.
    Dave Van Horn Fund Manager from Berwyn, PA
    Replied about 3 years ago
    Thanks for reading Bryan! Both have their pros and cons, it’s how we use the best of each I suppose. Best, Dave
    Konrad Wallerstein Investor from Jacksonville, Florida
    Replied about 3 years ago
    Dave, thank you for the article. I have some unmortgaged rental properties in FL and have thought of seeking a HELOC to invest for improved returns but now that I have no income other than my rentals I am stymied by a debt to income ratio above lenders’ thresholds due to a HELOC on my former primary residence in NJ (which I used to buy the FL properties) and mortgages on rental properties in France. These have a low rate of return. It seems I need to sell some of these, even if it entails a loss, to regain flexibility and be able to generate more income subsequently. Any alternative approaches or advice would be greatly appreciated.
    Dave Van Horn Fund Manager from Berwyn, PA
    Replied about 3 years ago
    Hi Konrad, You could get a private loan from a private lender on your rental properties. Or you could get what’s known as a Seller Financed Loan (I would suggest googling a company like Colonial Funding to see if they’d be willing to lend to you/at least give you the parameters of what most private lenders are looking for). These properties could serve as collateral with either of these types of loans, and as long as your positively cashflowing they could attach rents in the event of a default. So even though you don’t have any other additional earned income, most mortgage docs allow for the lender to attached rents. Hope this helps. Best, Dave
    Konrad Wallerstein
    Replied about 3 years ago
    Hello Dave thank you for the useful advice. I shall follow up. I have also registered with PPR and will be calling Kim to better understand how this market works. Best regards Konrad
    Ashley Wilson Rental Property Investor from Radnor, PA
    Replied about 3 years ago
    Another great article Dave!!! I am just starting to dive into this, as we have our first stream pretty well established. I also like how your posts are always jammed packed with information and don’t waste time getting to the point! For someone who is quite busy trying to maximize every minute, it is greatly appreciated!
    Dave Van Horn Fund Manager from Berwyn, PA
    Replied about 3 years ago
    Thanks Ashley! As a busy person myself, I always like to try to cut to the chase haha
    Michael Temple Rental Property Investor from Toledo, OH
    Replied about 1 year ago
    Great article! I am also a fan of Robert Allen. He was one of the first authors in this space that I started reading about 20 years ago. I never had the opportunity to hear him speak and I am not sure if he is retired, but I hope he considers updating his multiple streams of income for today. That book is great. I had a question for you, you mentioned in the article that you had all this equity in properties that you were able to leverage with HELOCs. Did you do that a long time ago? I have a ton of equity in my properties and no bank on earth will give me a HELOC on any of them. I have tried many times only to be shut down saying they don't do HELOCs on rental properties. My understanding is they used to before the 2007 crash, but not any longer. I would love to be able to tap my equity as right now it is tied up and completely unusable to me unless I refinance, which I don't want to do.