Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
Last week we hit our investment goal of $35k a month gross rental income. We bought our first investment property in August 2011 and the vast majority of our growth has happened in the past 10 months. We (my husband and I) now own 21 buildings and 59 units in Chicago and Milwaukee.
Life is still crazy, especially since we just got back from Mexico and are leaving for a two week trip to Europe this week… but I foresee a more steady and manageable pace moving forward.
It hasn’t been all sunshine and rainbows. We have had our fair share of problems. Some buildings were an easy takeover where the tenants stayed, paid rent, and didn’t cause problems. Some we had tenants leave in the middle of the night or leave the place trashed. Some properties were profitable from day one and some won’t be profitable for at least a year. The good thing is because we have scale it all balances out and we are not putting our own money into them every month.
BP has been such a huge part of my success. I gained the confidence I needed to go into this full time and have met some amazing friends who have helped me so much along the way.
I am looking forward to this much needed vacation and returning in June fully recharged and ready to go!
@Derek Carroll- About half our portfolio is in Chicago with traditional residential financing. We were able to cash out on some of our appreciation to buy the rest with 80% LTV commercial loans. We borrowed $100k from my brother to push us past the goal line and now we will be pulling more equity out of Chicago to pay him back.
@Steve Perkins- It has been beyond my wildest dreams, I honestly barely recognize myself and didn't know I had it in me to do all this.
I'm sure you are using BP's guidelines about cash flow and you are careful about not pulling too much cash out on your appreciation. As with my business partner ventures, my own rental properties are never leveraged too the max even if the current net rental income can cover the new loan. One never knows what may occur to cause net rental income to suddenly drop for a while. So many "investors" do not consider that scenario as they were pulling cash out of all the built up equity. In almost 30 years of ups and downs of real estate I have not had any forced loss of real estate because all the loans were easily covered by even dropping rental income. Rental income does not always go up each year. Keep you wildest dreams from turning into nightmares.
Wow @BrieSchmidt that's fantastic and congrats on your success!! I have been following you since your interview on the podcast, definitely left me with a few nuggets. Im currently in the process of correcting some things so I can purchase my next investment property. Are you available for mentoring or one on one meeting for insight on investing?
I don't do formal mentoring or anything. But I do try my best to answer any questions you may have about buy and hold. I'm leaving for vacation tomorrow (just downloaded the newest podcasts to listen to) but will be back in June and we can talk then.
Thanks for sharing Brie! I am interested to read about how you got to this point & where you plan to go from here. Enjoy the needed vacation and come back with energy to start grinding again. I am sure there are some things I can learn from you with the "buy & hold" strategy.
With all your investments, do you ever have to use private lenders/Hard Money at all? How do you locates these properties? I have heard quite a few success stories on here. I am so ready getting into multifamily and need some guiding and contacts. I live in Plano Tx. If anyone here have any connection/newtwork or contacts please kindly advice.
Congrats to you and your husband Brie. By the way, that also happens to be my favorite cheese ever! Haha..
I have a real question for you. When you first set out to achieve this goal, what were the first 2 or 3 Most important things you guys did to get started? Planning, finances, goals, defining property types, etc??
@Brie Schmidtthis is awesome! I recently got rid of my IT company to focus entirely on real estate. I liked running my IT company and enjoyed it, however, the phone never stops ringing and there just wasn't any extra time in the day to focus on real estate. Great podcast and thanks for sharing your experiences with us!
@Bryan C. That is a hard question to answer as we never wrote out a plan or anything... and that goal was not the same goal as two years ago or even a year ago. My husband asked me "when is enough, enough?" and I said $25k a month gross should net us $10k. Then I realized my numbers needed to be more conservative so I changed it to $35k gross. There really is not any planning, I go a lot on gut and what feels right. I will look at anything from a SFH to 500 units, as long as the numbers work. Financing is key though and if it wasn't for our relationship with the bank we would have not been able to grow as fast.
OK Everyone, I am in Europe on vacation so if you have any more specific questions PM me and I will respond when I get back in 2 weeks
Awesome ambition
Awesome follow through
Awesome inspiration
Agree wholeheartedly with the "optimizing" philosophy to improve numbers.
Can't wait for your next podcast. Would really love to hear more about how you manage to do all this and effect on personal life!
Seems like LOTS OF OPM I just hope your not making the banks rich.,What do you actually keep and put in the bank.Not to get to personal,an estimate maybe.Learned it's not what you gross but what you keep.
I'm a newbie, and just about to buy my second flip in Cleveland, but eventually I am wanting to buy and hold like you and have it replace my income. My question is.....if $35K is your gross monthly rents, can I ask what your estimated "Net" profits (income) is each month? Now if this is too personal of a question, please tell me, but I want to get to a goal of $20,000 passive income per month, so was wondering of $35K gross would accomplish that.
Thanks Brie!
PS: I absolutely LOVED your podcast when you first quit your job! You are an inspiration to me!
@Brie Schmidt I think your idea of "optimizing" is spot on. In fact, once you get to a certain "size" the extra money or return you can earn from "tweaking" what you already have may or may not exceed what you could make by buying more buildings, but it certainly is close, and it's MUCH less stressful. For example, we hunkered down and started weatherizing, and increasing energy efficiency in general, which here in Central Maine is very important. Low flow shower heads might cost $15 each, but they save 10-15 bucks per year. 70-100% return on investment. Yes, it's only $10-$15 at a time, but there are literally hundreds of "micro investments" you can now make within your own existing portfolio that will net you 20-100% ROI or better year in year out. Hope your Europe trip was grand! We're planning a similar trip but waiting until our child is more appreciative of the culture. Stay well.
I'm a newbie, and just about to buy my second flip in Cleveland, but eventually I am wanting to buy and hold like you and have it replace my income. My question is.....if $35K is your gross monthly rents, can I ask what your estimated "Net" profits (income) is each month? Now if this is too personal of a question, please tell me, but I want to get to a goal of $20,000 passive income per month, so was wondering of $35K gross would accomplish that.
Thanks Brie!
PS: I absolutely LOVED your podcast when you first quit your job! You are an inspiration to me!
Kind Regards,
~Kathy Argento
Sorry, I just saw this. With $35k gross rents we net about $10k a month.