100K of Cash Flow in Five Years
Ten years ago, as I was nearing my late 30’s, I was changing careers and scraping by with zero investments or assets to speak of. I’ve written about that time in an earlier blog post:
My Real Estate Journey: Reflections on 7 Years of Hard Work, Triumphs, Challenges and the Future
I didn’t know how I was going to make ends meet. Then in 2017, after being a Realtor for a few years, I rented out my first bit of real estate, collecting what then would be a drip towards—what now can be seen as more like running water—Cash Flow each and every month, year over year. It’s not a ton, but it’s suddenly an amount I felt worth sharing how it got to be.
I want to tell the story of how after buying my first real estate asset in 2016 at age 40 (first rental income not until 2017 after a full rehab & addition), I have leveraged that to now own 22 doors earning $100,000 each year in passive income. Bonus to that is I am about to start building on two of the 7 properties, two additional units on each (four more doors total), exponentially increasing cash flow.
I’m sharing this as a nod to real estate. That taking a bit of risk, and making the time to value-add your investments, pays off. To broadcast how creating growth and opportunities will reward you. It's a story I’m proud of, for 10 years ago I didn’t even know what I would do for a living to earn 60/70K a year, and that would be by working! This is Passive Income, as I still earn well as a Realtor, devoting long hours to that.
I want others to be inspired, as I have been from what others have shared to educate and motivate me. This milestone I reached, I just hit me on where the numbers are now. I literally just stopped before bed last night for the first time this year, and counted the total NOI on each door/unit, and what just got rented of my first larger GP deal at Somerset Drive—an 8 unit that adds appx $3,500 month, which put my Cash Flow over the 100K marker—a deal I wrote about here https://www.arirealestateblog.com/blog/my-first-commercial-building-investment-a-personal-success-story
I had my head down and didn’t think I was that far along, so I am also sharing this story more out of amazement.
*Side note
I’m liking the number 100, so sticking with that theme I also just last night set a goal:
100 units by 50 years old. Means I got four years to grow 3X.
How confident am I that can I get there? Do I know what the game plan is?
I believe it all starts with looking at real estate—seeing buildings. At a minimum—weekly. Drive them, call on them and run the numbers. There are always opportunities. Some worse and some better. Some suited for a different buyer, and not appealing to another. But you don’t discover them unless you’re researching, and out on the street seeing it/walking it. I’ve taken to long night walks after a week of being clammed up at my desk or in the car. On the way to dinner, scope out an area you are passing through. Go weekends, go before work. JUST SEE STUFF.
…And Value Add. That has been my route to Cash Flow. Buy properties with a Vacancy—or two—and investment time to improve it. You’ll get rents going on steroids and as a result, and a better caliber Tenant. I am always drawn to buildings with character and charm. They clean up well and are easier to rent. I focussed in a certain area, with nearly all of the properties within a couple miles from one another. An aea I could see was turning from bad to cool. An up-and-coming area helps on many levels, and certainly when hoping to refinance cash out. And that cash out is a great tool to keep buying more, once the last project was repositioned, generating good rents and value has jumped up, drawing out excess equity and putting it into the next deal.
This has been my approach, and what got me to $100,000 of annual Cash Flow in five years. Again, not a crazy sum, but something. It’s a 100K that is passive—kind of. It’s my investments working for me. Appreciating assets that kick off income. I’m proud of it, and hope that by sharing, maybe it’s got you thinking. If so, of course always reach out, as I would be happy to connect on any of this to see what kind of Cash Flow awaits you!
One of my West Adams duplexes, Cash Flowing well.