January marks the 13th anniversary of the purchase of my first rental property. Since I learned a lot from this community, I wanted to share my success with you. In 2024, I hit $200k in cash flow from my properties. If you're interested in seeing how that all breaks down from an income and expense standpoint, I created this Sankey diagram to share with you:
As for me, I'm planning to leave my w-2 job and take a little career break before deciding what's next for me. Best of luck to all you out there.
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
1y
Nice work and thanks for sharing David!! Love the visual!!
A few things that newer investors should note:
- it took 13 years to get there, you have to be patient - rents are high at about $1,750, so probably a quality neighborhood - looks like that is after vacancies, probably low turnover? - very low remaining mortgage balance!! Grow wide first, then deep (pay off) - your little expenses add up fast
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
1y
Well done! I know you mentioned taking time to relax, do you plan to further scale or do something different outside real estate? I know I would get bored with not having a job or business to do lol
January marks the 13th anniversary of the purchase of my first rental property. Since I learned a lot from this community, I wanted to share my success with you. In 2024, I hit $200k in cash flow from my properties. If you're interested in seeing how that all breaks down from an income and expense standpoint, I created this Sankey diagram to share with you:
As for me, I'm planning to leave my w-2 job and take a little career break before deciding what's next for me. Best of luck to all you out there.
How much did you pay for these 3 buildings initially and how many years did it take you to earn the money to pay for them?
It was a little under $2m for all my properties that I currently own when I purchased them. Not including closing costs. I bought the first one 13 years ago when I was in my late 20s.
That’s awesome. Well done. I hope people get the point that you worked hard to earn the $2 mil and invested it wisely, you didn’t just get rich overnight from real estate. You deserve a break. Clear your head and decide what’s your “why” from this point on in life.
If you have the data easily available, can you give us cash flow figures throughout the 13 years? I would find some motivation seeing how long it takes to stabilize a portfolio and start to see the profit.
Thanks!
I’m not going to pull all that info but I will say it was not always up and to the right. Covid was challenging for my rentals that historically had college kids as tenants. I’ll also say that the cash flow more than doubled over the past few years for these reasons:
1. I sold 2 properties that were taking up a lot of my time and were producing very little of my cash flow.
2. I used the proceeds to buy another property that had an obvious value add component.
3. I paid down and refinanced another property when rates were much more favorable.
4. Rents have increased significantly over the past few years.
January marks the 13th anniversary of the purchase of my first rental property. Since I learned a lot from this community, I wanted to share my success with you. In 2024, I hit $200k in cash flow from my properties. If you're interested in seeing how that all breaks down from an income and expense standpoint, I created this Sankey diagram to share with you:
As for me, I'm planning to leave my w-2 job and take a little career break before deciding what's next for me. Best of luck to all you out there.
How much did you pay for these 3 buildings initially and how many years did it take you to earn the money to pay for them?
It was a little under $2m for all my properties that I currently own when I purchased them. Not including closing costs. I bought the first one 13 years ago when I was in my late 20s.
That’s awesome. Well done. I hope people get the point that you worked hard to earn the $2 mil and invested it wisely, you didn’t just get rich overnight from real estate. You deserve a break. Clear your head and decide what’s your “why” from this point on in life.
Thank you!
I wanted to clarify that $2m was the collective asking price. I financed the properties so I actually paid a fraction of that amount upfront.
Well done! I know you mentioned taking time to relax, do you plan to further scale or do something different outside real estate? I know I would get bored with not having a job or business to do lol
Thanks. I haven’t decided yet. I’m definitely going to do something because I can’t imagine doing nothing. I need something to work toward.
I love posts like this. Would you mind telling us what you spend per month on life? Are you 100% real estate? Did you set out to retire with real estate, did you have a goal or an amount you wanted to make?
Hopefully this post gets tons of hits and traction would love to see a bunch more back and forth in here.
Congratulations!
Thank you Eric.
In addition to the rental properties, my wife and I have a paid off house, paid off car, and about $1.4m in retirement accounts, brokerages, and savings.
We live in a HCOL area and our expenses are $9.5k per month even though we live pretty modestly.
I set out initially to have real estate pay for at least some of my expenses in order to give me more freedom and financial security.
Is your wife quitting too? Seems like you may need to upgrade the rigs or something kind of fun. Anything you really want to do now that you will be retired, at least a mini retirement? I am in a pretty similar position. More properties but more debt. I became a realtor, what I would love to do is move to a place like Mexico but I have kids still in school. Love living vicariously through others!
Awesome. Congrats. I'm in a similar situation....11 1/2 years in the game. Soon to be $16k a month cash flow after I finish an ADU build. $19k if I can manage to sell my 6 unit dud and pay my heloc down. Difference is I have way more debt. I love how you've minimized what you have and are super cash flow heavy. Good work!
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
1y
This is great to hear. I’ve been investing in RE for 10 years and hitting 19k/month profit not counting things breaking or vacancies. It’s a get rich slow game, but if you can be patient and give yourself 5-10 years investing in RE, you’ll be set.
congrats and thanks for sharing! any other notes/info you can provide on how your debt is so low proportional to your cash flow? is that a combination of larger down payments + paydown over the past few years? that was the thing that most jumped out at me.
Nice job! Looking over your numbers I'm surprised a couple of them are so low - mortgage expenses, repairs and capital expenses. Based on that number of units I would expect much higher figures - did you buy these buildings all/mostly cash? Even at a high cap rate you've got several million dollars of market value here, so I'm curious about your base numbers. This would make a good case study.
Thank you.
I budget 10% of rent for repairs, maintenance and capex. I happened to get lucky this year and had minimal expenses there. I don’t expect every year to be like this.
For the mortgages, I did some accelerated pay downs and refinanced when rates were more favorable. I also did a 1031 exchange from a different property that gave me a bunch of cash for one of these purchases.
Well done @David Shaun . Congratulations on your success . Your experience reminds me to manage the portfolio well (i.e. sell losers) and to be patient.
Do you happen to have long term % of gross rent of combined maintenance/repairs/turnover costs/CapEx ? I've been an investor class B/C turnkey properties for just over 7 years now and my % of gross rent seems to be ~21% to 25% so far.
Rental Property Investor · El Dorado Springs, MO · Member since 2016 · 10 posts · 3 votes
1y
David, I was scrolling through YouTube and just found out about your success by watching Dave Meyer's video.Way to go! Congrats, and thanks for sharing. That's a big deal, and should provide encouragement to others who are on that path. It took me and my wife 17 years and more units to get to that level, but our units are SFH's in our back yard in a small midwest town with average rents under $1,000. As I read your comments, I'm finding that we both used some of the same approaches. Here are some things that have been most impactful for me:
*Reinvested ALL profits from Day 1 until it was time to walk away from W2.
*Aggressively paid down debt, focusing on loans with the highest interest rates and lowest balances that could be paid off the quickest, converting debt to cash flow.
*Maximize fixed rate low interest rate loans when they were available
*Make your units desirable, your customer service responsive, your tenants happy, and they will tend to stay.
*Team up with good contractors, communicate well, and keep them happy
*Track every dollar, so you always know where things stand in each category.
*Keep a healthy reserve available to handle surprises when they occur.
*Be patient, and allow time to work its magic. It does tremendous things for investors.
I walked away from my W2 in 2023 and am having the time of my life. I hope you are as well. Best wishes for this next chapter of your life.
David, I was scrolling through YouTube and just found out about your success by watching Dave Meyer's video.Way to go! Congrats, and thanks for sharing. That's a big deal, and should provide encouragement to others who are on that path. It took me and my wife 17 years and more units to get to that level, but our units are SFH's in our back yard in a small midwest town with average rents under $1,000. As I read your comments, I'm finding that we both used some of the same approaches. Here are some things that have been most impactful for me:
*Reinvested ALL profits from Day 1 until it was time to walk away from W2.
*Aggressively paid down debt, focusing on loans with the highest interest rates and lowest balances that could be paid off the quickest, converting debt to cash flow.
*Maximize fixed rate low interest rate loans when they were available
*Make your units desirable, your customer service responsive, your tenants happy, and they will tend to stay.
*Team up with good contractors, communicate well, and keep them happy
*Track every dollar, so you always know where things stand in each category.
*Keep a healthy reserve available to handle surprises when they occur.
*Be patient, and allow time to work its magic. It does tremendous things for investors.
I walked away from my W2 in 2023 and am having the time of my life. I hope you are as well. Best wishes for this next chapter of your life.
Thank you and congrats on your achievement. You make some good points.
I wasn’t aware I was mentioned on a YouTube video. Do you happen to have a link to it?
