$3K Monthly Net Profit

[Jimmy Moncrief]

I just finished listening to the latest bigger pockets podcast and thought it was a great idea to post this in the forums:

Who has at least $3k in monthly net profit from their real estate investing?What all do you recommend as the fast way to get to this mark?

Please only respond if you have actually done this...Not just read about a hypothetical situation in a book.

I have found in my own rentals that maintenance expenses deter a lot of profit over the long-term...

Thanks!

[Mike H.]

I'm above that.

I did it with sfh rentals. Its about slow and steady wins the race. I bought 3 a year and had one or two years with 4 and one year with 2 (went out of country to adopt).

Nothing spectacular. My early houses weren't that great but cash flowed pretty well. Then I really settled in and started picking up some solid money makers - especially the last 2 or 3 years.

Things are a little tougher now but I've been putting money into the deals lately to keep my cash flow numbers up and make the LTV's work to that magic 65 to 70%.

6+ years later and I have 19 rental properties. All from getting 3 a year every year. Definitely not a big time investor but I still have to pinch myself when I think that I own 20 homes (19 rentals plus my primary). Heck, I was tickled pink when I bought my primary residence and was impressed at that. :-)

But if you have limited capital available to you, then I think your best for getting to 3k in net profit is through sfh rentals. And just slow and steady wins the race. Pick a pace you're comfortable at (2 a year? 3 a year?) and stick with it. You'd be surprised at how fast those 4 or 5 years go by and all of a sudden you'll have 15 homes at 300/month apiece or 4,500 a month.

I don't think any other asset type will help you leverage your capital like sfh rentals. You can't use the same amount of leverage for commercial (i.e. multifamily) properties that you can for SFH (hard money up to 100% of the purchase/rehab if the deal is right). And even if you have to come out of pocket 10% to make the deal work, thats still tremendous leverage.