How I built a portfolio of 35 rentals and $10k+ monthly cash flow

362 Replies

Your story sure sounds great, but it's not very believable in a number of ways.  First of all, how do you convince your lenders to loan you the money?  You need at least 20% down, probably more for conventional financing.  Plus, lenders limit the number of mortgage you can have, and you say you've financed all your properties.  How did you do this?  And how do you go to another city and "train" brokers and other pros to "do the work for you"?   Your story doesn't go into any of these details, which makes it very hard to believe.

@Anton Ivanov Thank you for sharing your story. I am an AF vet with decent income and a talking my RE biz seriously. LLC filed with attorney, interviewing power team, etc. I needed to hear you story because I am feeling a little stressed by the startup and education costs $25k-all financed at high interest) I know....not the best way to start but I am learning.🤯 Ultimately would love to find an investor to work along side and learn from, partner with and grow with but we will see.

@Anton Ivanov:  Great Story.   You shall be both RICH and YOUNG at the same time.  Wow. Поздравляю!

@Jay Hinrichs :  WRT  paying off the loans - I have done the opposite.  I refinanced a property in order to get some cash out AND be paying more interest and less principal.  It's nice to have a property gradually become totally yours, but the tax structure does not support it.  Paid principal is not tax deductable.  So you have this money going out every month and you have to pay tax on it.  So I got this pile of cash out, and am throwing every penny back into the buildings.  Structural repairs, paint, roofs... you name it.

Great story! Also lost my parents between 2008-2011 and by default got me into being a real estate owner. , Ive now bought and sold 6 units, outside of primary residence, and have a few LP investments in parts of the country that I don't have a "team" such as Philly, Orlando, Columbus, OH. I'm curious what your thoughts are owning so much RE in the 9th year of a bull market? I feel good where I am at, but wouldn't after a typically once a decade "washout". How do you handle that, and are you still aggressively buying today? Would love to chat more

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@Anton Ivanov Just came across this discussion. Thanks for sharing your great story Anton!  Very helpful and motivating.  I hope to follow in some of your footsteps.  Thanks again.

@Anton Ivanov Congrats on your success, that's very inspiring! I'm starting out in real estate and just moved from the Kansas City area to Denver so I'm looking at investing back there from out of state. I'm just curious if you have any recommendations on who to use for property managers, agents, or contractors there. Would love any advice you have on that area.

@Gary Murano

I think I replied to a few similar questions in this post. If you look through my comments, there should be a post with info and links to where I typically look up market information.

But in short, right now I like markets which have relatively low home prices, high cash flow and strong economic/job/population growth projections. These tend to be mostly inland and mid-western cities, away from the coast, but definitely not all of them.

I think these markets will deliver a good combination of rising home values, rising rents and cash flow. Similar to the rationale in this BP post:

Unfortunately there isn't one place where you can look up all of the info, it takes quite a bit of time.

@Lee Johnson

I've written about in previously in this thread in a few places.

@Gregg Heminger

Yes, I've had more than 1 VA loan at the same time. The way VA loans work, is there is a total maximum loan limit that you can be exposed to. As long as you're under this limit, you can get more than one loan. The limit varies by county. If you go to their official website, they have some nice PDFs that describe various scenarios of how you can use VA loans - give it a read.

@Alex Evans

No, it's not required. You can get a VA loan with 0% down as long as you qualify. I put a down payment because I like to have at least some initial equity in my properties to reduce risk and because I wanted to have positive cash flow on this property, which would not have happened with a 0% down payment.

@Shannon Young

I'm not sure where you're getting the 4 property maximum. If we're talking about conventional loans, you should be able to get up to about 10, as long as you still qualify based on your debt to income ratio.

If you're using portfolio, hard money or commercial loans, you can finance as many properties as you want, provided the lender is willing too work with you.

@Logan Brown

I get this question a lot. Turnkey properties were a stepping stone for me that helped me expand my portfolio out of state and build confidence to buy and manage properties remotely. It's easy to say that I could have skipped it in hindsight, but I would probably go the same route again, because again it was a learning experience.

With that being said, you need to realize you'll be paying market values for these homes, which will affect your profit.

As far as tips, the biggest one I can give you is to not treat turnkey properties differently than any other property. You still need to research the market it's in. You still need to understand what neighborhood it's in and the types of tenants you're going to get. You still need to get the property inspected, etc. Don't assume that just because it's a turnkey property, it will be a good investment. Most turnkey properties are not good investments.

@Tressie Hollins

See some of my other comments where I went over property management. 

@Chantele Joordens

What I like to do is to network with other local/remote investors first, and then ask them for referrals to agents, property managers, etc. This way you'll actually get recommendations from other investors like you to people who work well with investors. I haven't had much luck just doing online searches because like you pointed out - it's pretty hit and miss.

I can also suggest asking every person you meet in real estate for at least 2-3 referrals to somebody else to keep your network growing.

@James A Oates Jr

Biggest hurdle/problem with out of state investing is definitely property management. You need to find a kick *** PM who knows what they're doing and will take care of the properties for you.

@Kenny Jenkins

You can send me a pm for recommendations. I would strongly suggest you fly out and not only visit the property and meet your PM and rest of the team, but also drive around the city and the different neighborhoods to understand the local dynamic.

@Mansi Kothari

I've done an extensive write up about the direct mail campaign I did here:

@Suzanne Goodman

I've shared a few posts in this thread about how I work with PMs.

@Ozkan B.

It may look easy on paper, but everything has been a lot of work. I'm a very goal/achievement oriented person and enjoy making progress in all areas of life. I probably have over 150 goals at any given time I'm working toward.

"groom each of my property managers to do the job for me " 

can you talk about how you find and/or select property managers? I manage myself my four units and I want to start looking into hiring someone

@Anton Ivanov - Thanks so much for sharing your story! It is really inspiring and motivating to me. I’m similar to you in that I’m very analytical and live in expensive CA (Sacramento). I’ve also concluded that buying outside of CA is better for investing.

That said, my current concern is how to manage the property remotely. You said you had 1) criteria for picking property managers and 2) a system for keeping them accountable. Would you mind sharing/elaborating on your criteria and system?

Also, I’m reluctant to buy property where there is snow, since I think that wear and tear might be greater and appreciation might be less in those areas. But since you bought in Kansas City, where there is snow, this does not seem like it has been a concern for you. Are my weather-related concerns not really a problem in your experience? Did weather (as far as it affects wear and tear costs and appreciation rates) not really enter into your investment analysis for choosing an area to invest in?

Thank you in advance for any wisdom you can share! 

Derrek H, Sacramento, CA

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