All Forum Posts by: Mike Mutabazi

Hello and welcome to the BiggerPockets community!

The number of properties needed to generate $15k in net profit each month can vary greatly depending on several factors:

• Purchase price and down payment: More expensive homes require higher initial investment, but may also generate higher rental income. More affordable properties may cash flow well but take longer to scale.
  
• Rental rates in your market: Locations with higher rents (e.g. $2k/month) will require fewer properties than areas with lower rent (e.g. $800/month). Research rental comps in your target neighborhoods.
  
• Expense ratios: Repairs, vacancies, property taxes, insurance, property management fees, etc. can take a big chunk out of gross rents. Factor in at least 40-50% of rents going to operating expenses.
  
• Financing: 30-year mortgages will have lower monthly payments than 15-year loans, increasing cash flow. But more properties will be needed than buying in cash.
  
• Appreciation/equity paydown: Cash flow from rents will be supplemented by property value gains and tenants paying down your mortgage.

As a rough estimate, assuming you can buy properties for $150k that rent for $1,500/month with 50% expense ratios, each property may cash flow around $750/month or $9k/year. To reach $15k/month ($180k/year), around 20 properties would be needed.

However, with $2,500/month rents, only 12 properties may be required. Buying higher cash flowing properties, putting more money down, or adding value/raising rents can further reduce the number needed.

I would recommend using the BiggerPockets rental property calculator and Rehab Cost Estimate Calculator to run the numbers on different scenarios in your market. Identify a target cash-on-cash return, and divide $180k by that amount to see how many properties you'll need.

Wish you the best in your REI journey! Let me know if you have any other questions.