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

367 Replies

I have to say “suuuuper inspiring” I don’t know if you’ve heard of Mr. money mustache but everyone should really start listening or reading his blogs. He’s very funny and very knowledgeable. He follows your same approach with saving approximately 70% of his income a month and living off 30%. He basically teaches you how to retire in 7 years. Some of the things I don’t agree with (investing in index funds) but for the most part he’s very interesting.

I have 6 units in Kansas City Missouri area as well. They really do cash flow. They are outside of the 435 though. It’s been really hard trying to find multi units lately.

Do you have any suggestions on what are 5 best zip codes. Idk if you like 64110 or 64128 zips. My pm was telling me to start buying in the Hyde park area because a lot of millennials are starting to inquire over there. Especially, since Cerner is around the corner.

Also, the Syrios family is really knowledgeable. They are HEEEEEAVY HITTERS in Kansas City, Mo. They have put out very good content on BP and you tube. Andrew has even answered a few of my questions personally. Great people.

Wonderful post. I like what you had to say about being “lucky”. You’re right. It’s more about determination. With the right mind set how much money you have doesn’t matter. Anything is possible.

This is a really great and motivating post! I am working on doing something similar in Baltimore I am in the process purchasing my first triplex using my VA loan. So I am very excited to read about your experience. Thanks so much for sharing!

@John Acheson

All of the financing I've done so far has been fixed rate. I'm not a big fan of adjustable rate loans. "What is the rule of thumb for cash reserves in real estate investments?" - I'm not sure if there is one? I have my 5-6 months of expenses target, but I know other investors who keep very little reserves because they want to invest their cash as much as possible. I guess it comes down to personal risk tolerance.

I agree with @Gregory Hiban that downfalls in the market will only affect you if you have to sell during the time and basically "realize your losses". If you're keeping the properties all through the downturn and collecting cash flow, the prices will eventually bounce back up and your ROI will go back into positive territory. I'm not sure what you can do to "hedge" this beyond having positively cash flowing properties and cash reserves.

@Caleb Heimsoth

I self-taught myself software development, built a few side-projects and wrote my first resume around that when I was applying to my first software dev positions.

@Andrew Sanders

Not a dumb question at all - all my properties have been on the MO side.

@Kristopher Gomez

Average purchase prices on the multi-family I've been buying have been around $50k-55k per door in KC. Rent is around $700 at market for units in good condition.

@Brugu Sirimalla

I don't buy turnkey properties in KC, so I can't comment on the turnkey inventory there. I look through a variety of channels - MLS feeds, LoopNet, tips from brokers/agents, reaching out to PMs, asking if their owners want to sell and finally direct mail.

@Amit Kumar

Ya, I'm up for coffee. Send me a pm please.

@Joe A.

Pm me for recommendations on property managers.

@Marcello Oliveri

I don't think there is anything wrong with buying outside of the 435. I like Grandview and Lee's Summit especially down south. 64110 is ok, but property there would probably be too expensive to cash flow. I would never buy in 64128 or in 29/30. Hyde park can be OK, as long it's the North/West side. As you start going closer to to the 71, the areas get really sketchy.

There is a pretty good post here on BP that goes over many zip codes in KC. It's pretty spot-on:

But it's hard to say which ones are the "best areas" because it depends on what properties and tenants you're looking for. There are C/D class areas, like around Independence that may cash flow well, but I would never buy property there out of personal preferences.

Great story and great information.... I'm avoiding analysis paralysis by taking ALL of my research and essentially consolidating it into a checklist type of document...... there will still be gaps and learning points but I think it will be effective! Has anyone done something similar and/or would you like me to share it when its complete? Definitely open to feedback as well

Super inspiring story Anton! I too am in KC and your first couple steps looked a lot like mine.  I'm at a crossroads for regarding the next move strategically though with a couple bridges in sure you've crossed before. I'd love to buy you a cup of coffee and talk shop whenever you're in KC next!

@Anton Ivanov this all sounds great. I have acquired a portfolio of 200 units in my town with similar numbers. 

My question for you is, are you finding anything comparable for sale recently? If so please provide a link to a 4-plex in a good area of KC or Atlanta that I can purchase for $50k/unit that will rent for $750/month?

If not, I'm not sure what purpose it serves to get people all excited about investment opportunities that don't exist anymore.

I will be in San Diego April 16-19 and would welcome the opportunity to discuss in person so please pm me if we can work that out.

@Anton Ivanov Congrats on your success and thanks for sharing. You seem to have scaled up pretty quickly. In the beginning phases, was there ever a time when you used some of the reserves from your existing rentals to purchase a new property? What is the general consensus on doing such? I'm not a proponent of it, but I'm curious to know what other investors are doing to scale up faster.

I believe investors do get very creative when they are starting to scale up. Whatever approach one takes, there always a risk of deploying reserve capital to acquire. 

@Anton Ivanov   this is very very inspiring but how would you recommend someone go about doing the same thing if they don't have a high income, nor a large savings/inheritance to jump start things and are just getting started in today's high market rather than in a low market?  Do you recommend those folks wait until the market goes down or just take a reeeeeeally long time to save and leverage lower value homes?

Originally posted by @Jenelle Harris :

@Anton Ivanov   this is very very inspiring but how would you recommend someone go about doing the same thing if they don't have a high income, nor a large savings/inheritance to jump start things and are just getting started in today's high market rather than in a low market?  Do you recommend those folks wait until the market goes down or just take a reeeeeeally long time to save and leverage lower value homes?

I would recommend getting a high income first, and controlling one’s spending next. Saving rate of 70% seems remarkable to me considering the level of income tax, social contributions and health insurance in the US. 

@Oliver J fryer

I think what you're doing is smart - most investors, including myself have a checklist of things they run through for each prospective property. Whether it's written down or not, it just gives you a quick refresher to "check all of the boxes" before pulling the tigger.

@Kristopher Orr

You just missed me - I was there a few days ago, but I'll try to remember to hit you up next time I'm in town.

@Jeff Kehl

Congrats on the 200 unit portfolio - it sounds like you should be sharing your story instead of me!

If you're referring to the numbers on a building I posted earlier in this thread - yes, this was purchased recently, in the last year. I've bout many similar buildings at about the same prices in KC in the last 18 months. I only have a single property in Atlanta that I bought a few years ago and have not been active in that market since.

There are definitely great opportunities to be found, although it is getting harder due to rising prices. I don't really think I'm that great at finding or putting together deals. I've just had lunch with an investor in KC, who bought 20 units at around $25k/door. After about $10k rehab, the rent for $650/each. These were 2 buildings in pretty bad shape and mostly vacant. The current owner didn't want to deal with them. That is what I would consider a great deal - mine are ok.

I'd love to meet up - I'll send you a pm.

@Darnell J.

I'm not going to lie and say I didn't dip into the reserves a few times when I was short on cash to close. I don't like doing it and always replenish the reserves right after closing, but it has happened. I've never completely used them all up and I wouldn't recommend that. I think as long as all of your properties are cash flow positive and you have a personal emergency fund and good income from other sources, you will be ok if this happens sometimes.

@Jenelle Harris

I don't believe in market timing, so no I would not recommend waiting. You don't know how long you're going to wait for. It could be 6 months, it could be 6 years. It could be forever. I'm a big believer in starting now, even though you may think it's not the best time (it never really is). In the perspective of 10-20+ years it will not matter much where the market was when you started, but every year you delay, you're missing out on huge returns down the line.

As far as income/savings - I think there are two possibilities here. One would be to focus on switching career paths and increasing your savings rate. I went from earning about $40k as enlisted in the US Navy to $150k+ in about 5 years time. Not saying everybody should do it, but it's just an example of what's possible.

Another option is to really educate yourself and embrace creative financing. I'm not an expert on this, so I can't really tell you which "method" works best, but there are creative ways you can buy properties with very little or no cash of your own. This can help you get started while your income/savings are low.

@Sebastien Hitier

I think our high savings rate can more be contributed to having no kids and no expensive hobbies. We pay very low percentage of income tax (because of real estate, businesses, and other deductions) and have mostly 100% employer-paid health insurance.

Originally posted by @Olu Sanya :

@Anton Ivanov I follow a debt free real estate model because in 2008 when the Sh**t hit the Fan and everybody (including me) that had debt against properties lost everything they had work so hard for; I decided to do real estate the boring way and make sure I am not a glorified property manager for the bank. With only 10 units (compared to your 35 units) and less people to deal with I am able to achieve the same $10K a mth cash flow because I owe no Man for the assets I hold. My approach will never make an HGTV show but I have financial peace & can achieve fabulous net-wealth goals with less properties.  I believe this is why @Jay Hinrichs suggested you start paying them off, because you have done such a wonderful job acquiring them, you now want to completely own them. 

Olu, I completely agree with you. I'm a huge fan of financial peace. It sounds like you have had great success with 10 units and making the same amount of cash flow. Pretty impressive! I own one rental property and am currently looking to purchase a second one. Any pointers and advice is appreciated; I would love to take you out for coffee or lunch if you're available.

@Anton Ivanov Congrats Anton! Your post has motivated more to get focused on investing. Let's have coffee sometime and talk real estate. I am in OC and used to live in Mira Mesa. I'd like to build my own rental portfolio too. 

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