How I Created an Additional $7,000/Mo. Cash Flow in 4 Years!

250 Replies

@Kenneth Garrett absolutely! I was 1 for 1 at the courthouse steps using a "expert". That expert costs me $26,000 in a state tax lien that was not obvious. I broke out on that flip about even selling it non MLS. My worse loss was $7500 just months ago. More wins than losses but you are right, HGTV does not show all the true costs to do a project and holding costs until closing.

@Dennis M. Thank you so much for your kind words and thoughtful post. I am normally that fast charging guy, and one who has succeeded despite the negative stuff out there. I have found my best deals off market and finding solutions for sellers. Lately, I am striking out and your post was spot on for me ! I am trying to build some cash in order to move away from my W2, but finding it harder than ever to find a deal. I am counting my blessings, and you are right about getting kicked around when it comes to managing tenants as a 2nd job. I am pretty good at it, but boy does it take work. Whoever termed this “passive income” should seriously revaluate that term. Thanks again for your input

@Paul Ellis I earnestly am a conservative type investor, and also took his course, but honestly Dave's thoughts and methods would have cost me millions in net worth. I believe his basic principles are great for the masses to stay out of debt, but there is good debt. For example, when I bought a property for $228k that was worth $300k and I took a mortgage, it was good debt. Today, that said 4 plex is worth $459,000 and I owe $90k. If I would have saved the "cash" I would have never gotten this deal. I buy and flip, and again use borrowed money from my HELOC. I respectfully am telling you that Dave does NOT have all the answers.

@Paul Ellis I could write a book about my dealings, and buying properties well below market values using borrowed money and smart leverage. Saving cash is slow and will cost you tons of money. In our Ramsey meeting, I was the only one who would NOT give up my Alaska credit card. You see, everyone was cutting them up and I was racking up massive monthly airline points as my card was linked to all my Home Depot purchases. I also paid off my card EVERY month and I maintain absolute control! I was not popular, but I am telling you sincerely, those people may have paid off debt, but I have amassed $4 million in RE equites. Just being honest here

Wow, man that is absolutely incredible! Thank you for sharing that inspirational path, and all that you have accomplished. What a great bonding experience to share with your son as well. Two generations of self made men in one endeavor!

Congrats on making so much headway!  

So what IS your freedom number?  

What cash flow will meet all of your needs?  Do you still have debt on any of those properties?  Can you increase your cash flow by paying them down or slowly raising rent over time?  Will your rents hold up in a down market?  Most rent will increase in a down market but if you are airbnb'ing anything or if your properties are at the high end of the rental market they may decrease some.  

What if you never touched your principal?  You could move a lot or all of that $800k into a self directed account and lend out through private lending in real estate at 8-10% and never ever touch the principal if you can live off the interest.  In my personal experience only the more desperate for deals and/or cash go after the 12% hard money in this market so would be personally wary of someone willing to do that.  Just my two cents though.  

Lots of markets will support multiple deals with that kind of money. 

Buy only you can decide what your freedom number is.  Personally, working Saturdays with a young grandchild would get me there very quickly.  

Updated about 1 year ago

I really can spell, really. I got auto corrected.

@NaDean Bowles . Thanks for your input. My FREEDOM number has been my struggle. My wife likes to spend more money than I do, for sure. Although my W2 is really high, my family ties are making me question my WHY. The $800k nest egg, my plans are to NOT touch the principal, but just take $3000 in mo dividends. I do not think I would deploy any of this into RE. I do have mortgages on my properties, but they all have 60-70% equity positions in them. One goal is to pay one 4 plex off thats worth $459,000 that I owe $90k on currently. Its a 3.87% rate so I never cared but it would provide another $1200 per month cash flow as that is the Wells Fargo payment. I am really asking myself what is enough, as I am a simple guy, but I then ask myself can I keep up with my wife’s spending, and possible health care issues as we age. I cannot get medicare until age 65, and I am 52 and my wife is 50. Our kids and now grand baby is really making me re evaluate what I want in life.

@Todd Powell I agree with you on the credit cards I used them for the protection and the cash back but of course pay them off every month. Also buying a home I used debt but I think buying a 200k home that can rent for $1700 a month minus repair, vacancy and property management and having is 100% paid for eliminates a lot of risk, you’re not forced to rent to a bad tenant. For me it’s all about eliminating the risk of the debt on the property, owning as few properties as possible and making the most from each one. Please poke holes in my RE strategy, it helps me see things maybe I’m blind too.

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