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

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

Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
Writing this to encourage, not brag! In 2001, I started flipping and did maybe 25 or so. It was tiresome, while also coaching two basketball teams, and maintaining my sales manager W2 position! I switched jobs in the 2009 economy fold, and probably messed up as I did not do any RE investing for 7 years, other than investing as a minority partner into a 72 unit college property using our HELOC for $202,500 as our portion of down payment. In 2016, I met with my son and financial advisor, and he informed me that we needed to hustle to replace income if I ever planned on retiring. So, in the last 4 years this is what I have accomplished; 1) flipped around 12 properties 2) bought into 5 plex in Lebanon 50/50 with my son for $375,000, rehabbed some and increased rents to market. 3) bought into 8 plex in Forest Grove 50/50 with my son for $642,000, rehabbed all 8 units and at market rents. 4) sold 5 plex in Lebanon by owner for $545,000 and invested into Crowdstreet Opportunity Zone in Atlanta, Ga. 5) bought fixer 4 plex in Albany, Or rehabbed, and rented at market 6) bought 2 fixer 4 plex's near Western Oregon college campus, rehabbed, and rent at market. 7) started hair salon, pretty much failed, and got rid of it 3 years later. 8) refinanced 8 plex and pulled out $100,000 on my portion to pay off debt. 9) Majority partner refinanced 72 unit building and received $145,000 I used towards debt. I accumulated lots of debt during this 4 year period, using my HELOC for down payments and rehab work to get to market rents. I now have worked hard to pay off the entire $421,000 HELOC, so my personal home is now FREE and clear of any debt. I was cash flowing $8000 a month from this work the last 4 years of creation, but down to $7000 as we sold our Lebanon property, but I avoided CAP gains this year with the opportunity zone, which is a 10 year hold. I am tired, but this can be done IF you put your mind to it! So, I now average $13,000-14000 a month positive cash flow, after Capex and monthly repairs. That number also includes $3000 or so a month from stock dividends on an account worth around $800,000. I am 52 1/2 and after 30 years in the same industry, trying to figure out what I want to do. My career, I have to work Saturdays, and with a new 9 month old grand daughter, I am less than thrilled to have off Fridays and Sundays. I ask myself, "how much is enough?" Maybe its a mid life crisis question, but it is real folks. I am currently looking for a decent flip but the well seems to be dry. I am thinking maybe more one good buy and hold might be smart before I hang up my W2 job. I wanted to share my story because nothing is easy out there. I am have been grinding since 2001, but taking off 7 years, and probably the years I should have NOT taken off! Even in a hot RE market, I have worked hard to find off market deals, and worked hard to get sellers to carry the contract. Some say I am LUCKY, but that probably true. I like to say I am BLESSED. But, I define LUCK as Labor Under Correct Knowledge. My advice is to always be grinding, and do not look for excuses. I had no family support or money, I just started with reading books long before there were any HGTV shows out there. I sit here on a slow work day on a Saturday I despise, so I wanted to encourage you to reach your dreams, and also find a number that would actually make you happy. Money cannot buy happiness, but I am looking for my FREEDOM number, but health ins concerns always clog my mind. Curious of your thoughts and your story, no matter how big or small.
176Reply
2,289 views

Most Popular Reply

Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
6y

I appreciate this post because I’m feeling a bit discouraged  today after deal hunting / grinding with not much to show for it Atleast for the day anyhow . I think the barrier to entry is a mental one in this business .it is difficult especially with limited capital and fierce competition with deep pockets . 

It’s certainly the most difficult thing I’ve ever pursued in my 42 years and there are very defeating days like you eluded to . I find that I need to remind myself I’m blessed to have all these assets and skills etc.. but that’s hard to do at times when it seems like everything goes wrong at once and your banging your head on the wall out of frustration . 

I think you have to love it ..be obsessed about it to become a success in this field because it’s so hard and requires daily motivation /self talk because any sane person would give up ! Who would put up with this crap and devote their time money and resources to get kicked in the gonads for years on end ! 
You need “why “power ..not “will “power to stay in the game long enough to see your dreams come to fruition and accounts start to multiply . This is a get rich slow business that’s for sure . Congrats on your success and I’m looking forward to seeing you post that you are not plugging away on Saturday’s any longer! 

See this reply in the discussion

254 Replies

Jump to latestLatest
  • Edmond, OK · Member since 2012 · 456 posts · 270 votes
    6y
    Originally posted by @Todd Powell:

    @Jai Reddy sincere or sarcastic? Just trying to share my picture and make decisions

    Sincere.  

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Clifford Paul beautiful, I wanna follow

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Clifford Paul. Question, at 42 how much cash flow did you have before you pulled the trigger? Been my Q

  • Rental Property Investor · Member since 2018 · 483 posts · 956 votes
    6y
    Originally posted by @Todd Powell:

    @Clifford Paul. Question, at 42 how much cash flow did you have before you pulled the trigger? Been my Q

     In 2007 I was medically retired from the military.  I had 32 rentals at the time and only 2 with a mortgage. I had no clue about leverage back then.  My cash flow was just under $20k a month. 

    Because I  had cancer and didn't know if I was going to survive and my properties were spread out in 6 states. We decided to sell all of them and our 2 vacation homes. 

    I invested all that money in low cost index funds and dividen stocks. I haven't touched that money since except for the dividen checks I recieve.

    One thing that got me where I am today is we have never lived on our cashflow. We currently have over 10 streams of income to live on. 

    Now we have 20 properties in our second portfolio that cash flows just under $40k a month. My wife still works and will retire at 49 in 4 years from the military. Since her income will be cut in half we will probably start using a little bit of the cashflow.  But until then we will continue to reinvest all of the cashflow. 

    I encourage everyone to get more streams of income if they want to retire early. There's thousands of ways to make money.

  • Investor · Avilla, IN · Member since 2013 · 796 posts · 769 votes
    6y

    @Todd Powell

    Great story and it sounds like your “why” is solidly based!

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Clifford Paul that is SO IMPRESSIVE. How in the world could you pay cash for all these properties? What prices and locations? I have never been able to save up to pay cash, and pretty much used leverage on under valued deals. Your story inspires me. The cancer deal is what scares me from leaving my W2. I have shouldered $1200 my portion from work ins, and my wife had a few surgeries and AFTER my co pays and monthly $1200 per month I still had $25,000 out of pocket. Many say I have enough cash flow to retire, but my cash in hand position is roughly $100k and wonder at 52 years old, is that really enough to ride my life out forever. Hence, I am still working. I get its about your monthly expenses and lifestyle. If I were single, I could quit tmr, but I love my wife with all I have. I just am more concerned about her health. Thank you for sharing these details. Its amazing what you have accomplished!!

  • Investor · Marietta, GA · Member since 2016 · 98 posts · 168 votes
    6y

    @Todd Powell that’s awesome!!! Great job.

  • Rental Property Investor · Houston, TX · Member since 2019 · 212 posts · 149 votes
    6y

    "started hair salon, pretty much failed, and got rid of it 3 years later." Why a hair solon of all businesses? and why did it fail?

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Susan Tan. My sister in law worked in industry for last 20 years. Supposedly, 4 women wanted to all leave THE RETREAT which the largest salons in our town of 50,000. My wife proposed the idea, but I was reluctant as I only ever saw and met with 3 women initially. The 4 th never really committed, as she basically backed out at the last minute. We had leased and rehabbed an old salon called “The Hair Palace” and place that had once existed for decades with old ladies. We put $16,000 into another persons building, and signed a 3 year lease, with 5 additional extensions. We rented each chair for $500 each, so $1500 per month, but after expenses this equated to $200 cash flow IF all went well. Too much exposure, and we could never get 4th chair filled, as they were all independent stylists and bought their own supplies. Our job was to provide the nice place, and all utilities, etc. bad business model and handed over to my sister in law once the 3 year lease ended. Lost some money, but then again, I lost a ton on 3 bad stock advice in the past. Most never talk about losses, but only the wins. Fortunately, I have had massively more wins than losses, but have lost a few times along the way.

  • Investor · Curtis, NE · Member since 2019 · 231 posts · 140 votes
    6y

    @Todd Powell health insurance is a bugaboo and is a big concern and one of the obstacles to early retirement on my part. It’s a looming problem. What do Brendan and his like do for insurance, any idea?

  • Rental Property Investor · Foster City, CA · Member since 2019 · 24 posts · 35 votes
    6y

    @Kyle J.

    W-2 income is charged at the highest income rate. Yes, you may pay income tax on the investment income, but there are so many tax benefits, which dramatically reduce your taxable income. I have owned a SFR for 9 years. Due to depreciation, etc., I have never paid income tax on my rental income. In fact, I have a loss every year which reduces my income tax on my W-2 job. This is why so many wealthy people are real estate investors.

  • Cory BinsfieldPro Member
    Financial Advisor · Duluth, MN · Member since 2012 · 157 posts · 194 votes
    6y
    Originally posted by @Clifford Paul:
    Originally posted by @Todd Powell:

    @Clifford Paul. Question, at 42 how much cash flow did you have before you pulled the trigger? Been my Q

     In 2007 I was medically retired from the military.  I had 32 rentals at the time and only 2 with a mortgage. I had no clue about leverage back then.  My cash flow was just under $20k a month. 

    Because I  had cancer and didn't know if I was going to survive and my properties were spread out in 6 states. We decided to sell all of them and our 2 vacation homes. 

    I invested all that money in low cost index funds and dividen stocks. I haven't touched that money since except for the dividen checks I recieve.

    One thing that got me where I am today is we have never lived on our cashflow. We currently have over 10 streams of income to live on. 

    Now we have 20 properties in our second portfolio that cash flows just under $40k a month. My wife still works and will retire at 49 in 4 years from the military. Since her income will be cut in half we will probably start using a little bit of the cashflow.  But until then we will continue to reinvest all of the cashflow. 

    I encourage everyone to get more streams of income if they want to retire early. There's thousands of ways to make money.

  • Cory BinsfieldPro Member
    Financial Advisor · Duluth, MN · Member since 2012 · 157 posts · 194 votes
    6y

    Clifford needs to be on the BP podcast. Amazing story! Someone dm Brandon Turner or David Greene or whoever  books guests for the show. I was floored by his story! 

  • Rental Property Investor · Orlando & Submarkets · Member since 2019 · 49 posts · 15 votes
    6y

    @Todd Powell, awesome! Thank you for sharing! Extremely motivational!

    V/r,
    Bob

  • Real Estate Agent · Boston, MA · Member since 2019 · 5 posts · 4 votes
    6y

    Hi Todd - I just turned 50 this year need to ramp up my retirement too. This post is so encouraging.  

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Cory Binsfield. Me too

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Robert Carlson. Thanks man

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Cathy M. When are you looking to retire? What are your goals?

  • Jon S.Pro Member
    Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes
    6y

    @Todd Powell

    Well done! Thanks for sharing your story!

  • Investor · Saint Petersburg, FL · Member since 2019 · 9 posts · 9 votes
    6y

    Thanks for sharing your journey! That's what this is all about - the journey, not the destination. If your destination is retirement and spending time with your family, that's awesome! If it's building a huge portfolio, that's cool, too! Regardless, we all identify with the journey it takes to get there. We are all travelling on the same road and that is what makes this so exciting! Thanks for sharing and keep us updated!

  • Rental Property Investor · Annapolis, MD · Member since 2011 · 232 posts · 170 votes
    6y

    @Todd Powell congrats! Thank you for sharing your story in detail. Big inspiration! What is your W2? Is there a way for you can take a cut in salary for a more laid back role that will still provide health insurance?

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Bob Willis. I do not know, any way to reach out to Brendan?

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Torend Ebner thank you Torend!

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Matt Nusbaum. I run a dealership, and no way to work less hours. I have been in the car biz for going on 31 years after I got 2 college degrees back in 1989. It was going to be a temporary job, but provided well over the years. Now, there are more pressures, less margins, and tired of working Saturdays. My wife is off and my family, so that is one of the driving factors right now. I also did not state I get a new demo to drive and gas allowance, so it makes it tougher as I am very comfortable.

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Jon S. Thank you kindly

Join the conversationCreate a free account to reply, vote on answers and follow this thread.