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

365 Replies

@Anton Ivanov I loved reading your post!  Thanks for taking the time to share your story and how you got to where you are now.  I'm still active duty so it was great to hear about your success and methods.  Best of luck toward your goal of 50!

@Anton Ivanov Great stuff, man! Very inspiring to see where the story started to where you are now. I like the idea of the full review and breaking down all the numbers to see which units are least performing in order to get into something better. Best of luck in the future!

I really enjoyed reading this. I am also in California and I think we are way overpriced. I just bought an RV and will tour the country, but also looking for real estate markets. Can I take you out for a Starbucks when I get to Kansas City?

Awesome job @Anton Ivanov , I own a mixture of Duplexes and SFR in Atlanta currently $6500 cashflow per mth 7 doors not debt on the properties, just bought our latest duplex last Monday in Austell GA. I also have a goal of 50 units, $50,000 a mth cashflow. I will be @ $10,000 early next year.

Glad to see someone else with a 50+ unit goal.  keep it up.

@Anton Ivanov I have read a lot of success stories on BP, but this probably has to be the best "real deal" story. Fast time line, great cash flow and built it all yourself. Nice summary and realistic goals for the future. You are a rock star investor! Congrats.

great story... treat it as a business. SAVE a bunch of your income.. starting off being a high income earner .... all things that help you create this machine as fast as you did.

Have you thought about using the cash flow your not touching to start paying off your highest interest rate loans first. you get them paid off its like owning another unit without having to buy one..

your pay day comes when these are all paid off.. !!

@Siler Coggins

I totally agree about treating your rental portfolio as a business, especially once you get 10+ units or so. You need processes and people to run those processes to be successful.

@Aaron L. @Mark S.

Regarding $250-350 cash flow per door - I don't think that's actually very high? I know investors who find deals where they cash flow at $400+ door, I'm just not as good at finding/putting together deals as them. The key here is buying properties below market values and buying value-add properties that you can rehab and raise the rents on.

My most recent purchases were all multi-family in Kansas City (mostly 4-plexes), B class areas, about $50k price per door. These were all private sales. You won't find these numbers with turnkey properties, especially with the current prices.

@James Riggs

I built my team in KC through a lot of networking, mostly here on BP. I reached out to a few investors I knew who invested there, asked for references, kept calling around, etc. I also visited KC and met all of my "team members" there in person at some point. I'd say it was a process that is always work in progress.

@Chirag Shah

I still think turnkeys are a great way for somebody to get started investing out-of-state if you don't want to (or don't have the time to) build a local team yourself, source deals, manage rehabs, etc. etc. With that being said, you will sacrifice returns and cash flow for this "convenience", if you will. It's all a matter of what you want to do.

I haven't looked at turnkey numbers recently, but I know home prices have been rising across the board, so I wouldn't be surprised if it's a lot more difficult to find worthwhile properties in the current turnkey market. I've had great experience with Norada Real Estate (ran by @Marco Santarelli ) and would recommend them.

@Henry Murray

All of the first bunch of properties I bought are in my or my wife's personal name. If you're using conventional loans, I think you have to have your name on the title anyway. Once we switched to buying larger multi-family properties and commercial loans, we set up an LLC and bought them through that.

I'm not a legal expert, but in my personal experience it's not really necessary to have an LLC for your first few properties. Once get 5-10+, I would consult an attorney to help you set up a structure that will protect you and your assets from potential lawsuits.

Congrats, impressive!  Most people have trouble doing this in their own market but you've managed to do it from a distance!

@Gil Flmeinga

I don't live in Kansas City, I live in San Diego, but I'm open to a coffee nevertheless :)

The question about market selection is pretty loaded and there are tons of discussions on that around here. I personally favor markets/approach that's outlined in BP's annual rental market survey (here is the latest) - that is focusing on cities that have a good mixture of cash flow (driven by relatively low prices and strong rents) and appreciation (driven by good economic/demographic conditions).

So my research generally consists of starting with the 50 biggest metropolitan areas in the US and narrowing them down based on which ones fit the above criteria the most. I also prefer not to invest in any markets with extreme weather conditions (too cold, too hot, prone to natural disasters, floods, etc.), so that narrows the list down quite a bit.

As far as building a remote team - it all comes down to networking, this site being a great resource. I'd suggest reaching out to other local investors and asking them for referrals as a start.

@Anton Ivanov , that is impressive.  My numbers are from TK in Memphis.  I realize I am sacrificing returns and cash flow, but I don’t have the time/desire/wherewithal to find, negotiate, and rehab the properties myself.  Since I’d end up paying retail for the rehab myself because that’s not where my skillset is, my logic is my time is better spent elsewhere and the economies of scale I gain by using a large TK outfit essentially equate the the delta between any “deal” I may get on my own and the amount I’d end up spending as a small “mom-and-pop” investor to a contractor/crew.  It will take me longer to get to my goal, but I ackowledge that going in.  With that said, the total returns still crush average annual returns in the stock market (although I’m heavily invested there, too).

@Anton Ivanov @Mark S.

Would you mind sharing a quick example of the numbers you're getting on 1 of your buildings? You're obviously doing very well for yourself, and I don't doubt your success ...the reason I'm asking is I'm genuinely interested. 

You said you bought a 4plex for around $200k in a B area...

I crunched some numbers and even with a 25% down payment, monthly rents of $800, and setting aside the reserves you mentioned above, I'm only coming up with a net cashflow of around $200/mo per unit. I don't imagine you'd be renting a $50k unit of a 4plex in a B area for much more than $800, but maybe you're getting really great deals! Or maybe my numbers are just wrong :)

Thanks for taking the time to reply. 

@Anton Ivanov , I can relate to having an analytical mind. I believe analysis paralysis has stopped me from starting on my first deal. After reading your story, it makes me believe my goals are more attainable than what I first presumed. I am a licensed contractor in Los Angeles, CA, just North of you, but my goal is to acquire a portfolio as extensive as yours. Where do you recommend I start looking for rental property out of California? How do I get in contact with the right people to get me started out of state?

Fascinating. You mention having included a picture of their property on your direct mail campaign. How did you get the photo and why did you include it?

@Aaron L. , search for my post on 3/2 SFR in Memphis, TN - Am I Crazy? and I think you'll find exactly what you're looking for. I'd post direct link to it, but I'm on my phone and can't find easy way to do that right now.

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