August 12, 2025 • 26 mins
With his job as a garbage man, Jeff Taz doesn’t get paid if he doesn’t work, so having another source of income was critical. Over the years, Jeff has faced some tough situations where his rental income allowed him to take time off without stressing about paying the bills.
On this episode, Jeff shares how he built his portfolio by sticking to a simple strategy, buying one property a year. We talk about how he saved for down payments, what his numbers look like today, and we walk through exactly how he grew his portfolio from nothing to where it is now.
https://rentalincomepodcast.com/episode534
Thanks To Our Sponsors:
MidSouth HomeBuyers – Turnkey Rentals In Memphis & Little Rock. Instant Cash Flow On Day One. (Priced between $100,000 to low $200's)
Ridge Lending Group - Get A Free 30-Minute Strategy Session With Caeli Ridge.
Rental Accounting Software Made Easy. Free 30 Day Trial
On this episode, Jeff shares how he built his portfolio by sticking to a simple strategy, buying one property a year. We talk about how he saved for down payments, what his numbers look like today, and we walk through exactly how he grew his portfolio from nothing to where it is now.
https://rentalincomepodcast.com/episode534
Thanks To Our Sponsors:
MidSouth HomeBuyers – Turnkey Rentals In Memphis & Little Rock. Instant Cash Flow On Day One. (Priced between $100,000 to low $200's)
Ridge Lending Group - Get A Free 30-Minute Strategy Session With Caeli Ridge.
Rental Accounting Software Made Easy. Free 30 Day Trial
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Inspiring interviews with Today is Top Landlord, This is the
Rental Income Podcast.
Speaker 2 (00:07):
And now Damnly, Jeffy, You've had some difficult situations that
your rentals have really helped you with. Can you tell
me what's happened.
Speaker 1 (00:19):
Well in the past. My son's mother, she had been
diagnosed three months after he was born with stage four cancer.
I was able to take off without having to worry
too much about bills or anything during that time and
just worry one hundred percent on family, especially in the
(00:39):
later part of her life before she passed. Recently, though,
back in May, I broke my hand bike riding with
my son, of all things, and I was able to
take off. I'm currently off now, but I'm able to
take off four months consecutively without worrying about having to
make any of those bills.
Speaker 2 (01:00):
Is living proof that having only one source of income
can be very dangerous. With his day job as a garbageman,
if he doesn't work, he doesn't get paid, and having
rental income has given him a lot of flexibility and security.
And on the show today, we're going to figure out
how jeff build a rental portfolio that provides him over
(01:21):
eight thousand dollars a month in cash flow. Joining us
on the podcast today from Fingerlake, Illinois is Jeff Has.
We'll take a quick break to thank our sponsors. We'll
come right back and we'll talk to Jeff. Are you
thinking about investing in rental properties but maybe you don't
know where to start. My friends at mid South home
Buyers make it simple. For over twenty three years, they've
(01:44):
been selling fully renovated, turnkey rental properties in Memphis and
Little Rock. We're talking new roofs, plumbing, electric kitchens, bathrooms.
Everything is brand new and done right. And here's the
best part. Every property comes with a well qualified tenant
in place before you close. That means you get cash
(02:05):
flow from day one. Plus, Midsouth continues to professionally manage
the property for you after the sale, and they back
it up with two powerful guarantees. You get a one
year total maintenance warranty and a lifetime occupancy guarantee. Personally,
I've bought five properties from them and I couldn't be happier.
(02:26):
If you want to talk to someone that's been through
the process, feel free to reach out to me. I'm
happy to answer any questions or if you're ready to
get started, just go to midsouthhome Buyers dot com. That's
midsouthhome Buyers dot com. It's a lot of work to
find a really good rental property, and when you actually
find that property, you want to make sure you're working
with a lender that can get that loan closed. The
(02:49):
lender that I recommend is jay Ley Ridge from Ridge
Lending Group. She's a nationwide lender and her specialty is
helping investors finance rental properties. She has a ton of
loan programs and she can find something customized to you
for your situation. If you want to find out more
or you're ready to get started today, just go to
Ridge Lendinggroup dot com. That's our Idge Lendinggroup dot com.
(03:14):
N MLS four two zero five six. Jeff, let's start
where you are today. What does your portfolio look like.
Speaker 1 (03:23):
I have six rental properties, two single families and four duplexus.
Speaker 2 (03:30):
And when did you start buying rentals?
Speaker 1 (03:34):
December of twenty seventeen was when I first jumped in.
I had a lot of headwinds, a lot of people
that were telling me it's a bad decision to buy
rental properties to have people in them. They're going to
destroy them on you. It's just going to cost you
money or you're not going to do well. And I
(03:56):
kind of took a step back and thought about it,
and not one of those people that were telling me
and giving me that advice actually owned rentals, either previously
or currently.
Speaker 2 (04:07):
Yeah, you know, it's so funny because the same thing
happened to me when I was thinking about buying rentals.
Everybody was so negative about it. But you're right, the
people that are most negative know nothing about real estate.
So did that slow you down or did that stop
you from getting started?
Speaker 1 (04:27):
It definitely made me nervous, made me kind of question myself.
I looked back and I had quite a few friends
in the trades, so that gave me a bit more confidence, saying, well,
if I get stuck on this or stuck on that,
well I can maybe ask them to help me out
or give some advice. I had a cousin who owned
(04:52):
one rental property, and I before I jumped in and
really got serious about trying to find one, and had
a conversation with him and I said, yeah, you know,
I hear how terrible it is and from everybody, He's like, no, no,
it's great. It's you know, you sign somebody to a
lease and you know here and there you gotta fix stuff,
(05:14):
but you get to write all those things off. It's great.
Speaker 2 (05:16):
It really is that it was like that bit.
Speaker 1 (05:18):
Of sunshine in the clouds that I needed to start.
And you know, my my goal was one every year,
four or five years, and I actually I did six
of them over that span.
Speaker 2 (05:34):
Now it seems like it was definitely a good move
for you buying rentals. You know, a lot of times
we look at the cash flow, but as far as
your net worth, what was your net worth before you
started buying rentals and what is it now?
Speaker 1 (05:51):
Uh, previous buying I went through a divorce actually was
a pretty good one as far as the forces go.
But I would say I was g twenty to fifty
thousand dollars net worth range at the most. And today
I'm closing in or right around the three million dollar mark.
Speaker 2 (06:11):
Three million dollars in really not that much time. That
is really awesome with also with not a huge portfolio,
you know, just buying one rental a year. Well, let's
take a look at your numbers and see how your
cash flow is working. So if you add up the
rent from all your rentals. How much rent do you
(06:32):
bring in every month eight monthly?
Speaker 1 (06:34):
Yes, thirteen yeah, about thirteen seven fifty roughly right now.
And I keep I keep the h I keep the
rents on the fairly lower side too.
Speaker 2 (06:46):
Why do you do that?
Speaker 1 (06:48):
The turnover is usually your most expensive part if you
have to. You know, when you clean out a place,
you're not only cleaning it out, but you're doing repair,
you're doing upgrades. You're going to get more rent when
you have a place that looks more up to date, cleaner.
You don't want to go in with putting somebody in
(07:10):
a place that you know already has problems or could
have problems not on the line, because it's much easier
to fix when nobody's living there.
Speaker 2 (07:18):
So you're not raising rent on your tenants, like once
they move in, you're keeping them at that rent.
Speaker 1 (07:25):
I will raise them. I do pay attention quite a
bit to the market in the area, and I'll raise them,
but I don't raise them as high as most places
are around. Like competitive, I keep mind very competitive. So
I if I lose somebody, it's because they bought a
(07:47):
house or they're moving out of town. It's rare that
they would move for any other reason than that.
Speaker 2 (07:56):
Okay, all right, that makes sense. All right, So thirteen
thousand and seven point fifty is your gross friend. How
much are your mortgage payments for all your properties?
Speaker 1 (08:09):
I'm right around between five thousand and fifty five hundred a.
Speaker 2 (08:14):
Month, okay, And that includes principal interests, taxes, insurance, everything.
Speaker 1 (08:19):
That's everything concluded.
Speaker 2 (08:22):
What about budgeting for repairs? Like, do you set a
certain amount of money aside every month or how do
you handle that?
Speaker 1 (08:30):
Yeah? So I've been a great natural saver my whole life,
and right now my average I average it, or my
minimum that I save is about four thousand a month
that I set to the side. I'll make extra payments
on principle and whittle down my mortgages as much as
(08:52):
I can. But put having that that buffer, and you
know on the side there helps out a lot.
Speaker 2 (09:00):
Okay. So you're just saving money in general so that
you have cash when something big comes up, but you're
not necessarily setting aside a certain amount per month for
each rental property.
Speaker 1 (09:14):
No, No, I've been on such a pattern. It start
way back in twenty ten. I started with not really
a goal in mind, but I was seeing how much
I was saving, and I was surprised at how little
I had in the bank compared to what I made
a week. So I budgeted myself and made automatic savings,
(09:37):
so I would only take home a certain amount every week,
and it would be the exact same amount every week.
And over the years, you know, you get raises, you
get promotions, and over the years, it just it built
up without me ever even noticing it.
Speaker 2 (09:55):
Right, Okay, so you've got thirteen thousand, seven fifty rand
fifty three hundred mortgages, so your cash flow is eight
four hundred and fifty before anything comes up. But that's
like on average every month, you're you've got about eight
(10:15):
thousand dollars a month that you're mostly setting aside.
Speaker 1 (10:20):
Yeah, I'll pay down, like I've gotten into investing quite
a bit in the stock market as well. In the past,
with me saving as aggressive as I have, it was
with a goal to buy another property within one year,
so I was prepared. You know, the best thing you
(10:40):
could do is always, even if you don't have a
goal in mine, prepare yourself so that when opportunities come up,
you're ready to pounce on it instead of sitting on
the sideline saying, ah, if I only had this or
if I only had that.
Speaker 2 (10:56):
Right, Right, So, when you're buying a property, it sounds
like you're saving up a down payment. So you're not
doing any kind of like creative financing or anything. You're
it sounds like you're saving a down payment for every purchase.
Speaker 1 (11:13):
Yeah, so I looked at all the different creative ways
of doing things in my head. If you're not if
you're not working hard enough to save the money, put
it to the side, if you're going out, you're borrowing
money from people to help you out, if you're not
(11:34):
really earning it and seeing how hard it is to
make it. If something comes up after you've invested that
it's easier for you to just kind of throw your
hands in the air and say I give up. This
is kind of like that blood, sweat and tears. You know,
you do all the work yourself, and it means more
to you as you accomplish things.
Speaker 2 (11:57):
Right, Okay, So as so, I guess when you set
the goal of one a year, buying one property a year,
that that was based on that you could save a
twenty or twenty five percent down payment over the course
of a year.
Speaker 1 (12:15):
Right, So if with who I was using to get
my loans through, I was able to get much lower rates.
Usually when you're an investor, you do pay extra on
your loan rates, and with me putting twenty five percent down,
it did two things. It got my loan rate a
(12:35):
lot lower and my cash flow was a lot higher.
So it set me up down the road in a
much better place.
Speaker 2 (12:43):
All right, Well, well let's let's figure out how you
built your portfolio. So let's go back to the very beginning.
What was your first rental property.
Speaker 1 (12:54):
My first one was a single family house about thirty
minutes from mine. It was a foreclosure bank foreclosure. It
overlooks a lake, so it has a It's in a
really beautiful area, and I had purchased that. It's not
a very big house. It's around one thousand square feet
(13:15):
to bed, one bath, attached, one car garage. I paid
ninety five thousand for it in twenty seventeen. The only
things I had to add were a refrigerator and then
I just added window treatments. So it was a very
easy one to turn and get some a tenant, and
(13:36):
I had a tenant in within about two weeks of
me purchasing it.
Speaker 2 (13:40):
Is that like typical for what you're looking for a
property that you can buy and start renting out right away.
Speaker 1 (13:48):
I'd say yes, But that was the easiest one, and
then after that it just bought more and more difficult one. Okay,
I had kind of a thing that I went by,
and that was, if I'm not willing to live in it,
I'm not going to rent it to anybody. So like
my second home that I bought was a duplex that
(14:09):
we kind of stumbled on, not knowing. Even my realtor
didn't know it was duplex because it wasn't listed as one.
So when we walked through it, we saw on the
there was like a deck in the backyard or a
staircase up to a deck. We went up there and
there's another door and we went inside and we're like, wow,
(14:29):
this is a studio apartment. So it was it was
a diamond in the rough for sure, because I mean,
they had it on the market for quite a long time.
So I was able to get it for one hundred
thousand dollars. And then right after I bought the house,
the town announced that they were going to make like
a river walk and they like revitalized the area that
(14:52):
was in and put a ton of money into the neighborhood.
So just me buying it, and if I didn't even
out the value the property want way higher. And now
that one hundred thousand dollars house that I bought in
March of twenty eighteen is at least two hundred and
fifty thousand value.
Speaker 2 (15:12):
Wow. Now with it not being advertised as a duplexit,
was it zoned as a duplexit? Did you have any
kind of trouble you or anything you had to do
with the county to make it legal to rent out
that other space.
Speaker 1 (15:30):
No, And that was what was funny, was it was
zoned or to be legal to be a multi family.
But I'm not sure if it was a newer real
estate agent or what that they didn't properly code it
in the MLS. But even in the description of it,
they never even bring up that there's an apartment overhead.
(15:52):
And I at the time too, if you think back
to like the twenty eighteen when I bought that house,
I don't think duplexes or multifamilies are all that desirable,
So that might have been one of the things that
they thought about. Well, let's just leave.
Speaker 2 (16:08):
That out right. Wow, well, well, good for you for
finding that. How long did it take from the time
that you bought that first property to that duplex?
Speaker 1 (16:19):
Like?
Speaker 2 (16:19):
How long? How long did you wait for that? So the.
Speaker 1 (16:26):
House that I bought originally the first one was December
of twenty seventeen. It went so well that I started
looking in January at another place, and by March I
had purchased my next one. So over a four month span,
I had already closed on my next property.
Speaker 2 (16:46):
Now did you notice the difference? A lot of people
prefer single families or some people preferred duplexes. It sounds
like you bought a lot of duplexes. Like do you
find duplexes are better rental or do you have a preference?
Speaker 1 (17:03):
So they're definitely better rentals for cash flow, so I
make quite that one. In fact, when I started renting it,
that was when the light bulb turned out in my
head that I can chain trade a paycheck for one
month's rent on a house. And that turned my My
(17:24):
goals were completely changed by just that house right there.
My cash flow is so high it replace the paycheck.
So in my head, I go, okay, now, from now on,
when I buy houses, I'm going to figure in that
I make enough cash flow that I replace a paycheck,
so then I will be completely financially independent at that point.
Speaker 2 (17:42):
Wait, explain that. So you buy a property and the
cash flow from that property is equal to your paycheck
from your job.
Speaker 1 (17:50):
Yeah, equal or greater than my take home pay for
my job. Yeah. So I think I had mentioned to
you before that you know, you can make a undred
thousand a year and a third of that has gone
to taxes right away. So we'll say, on the high side,
you're going to take home seventy five thousand an actual
(18:12):
take home or seventy to seventy five thousand my job.
I have to work about twenty six hundred hours a
year to make that. With the rental properties I'm figuring
out that I'm using. I'm making over one hundred thousand
dollars and I'm spending like sixty.
Speaker 2 (18:32):
Hours a year doing much better deal.
Speaker 1 (18:35):
Right, it's mind blowing. Yeah, it's yeah, it's surprising that
this stuff isn't taught.
Speaker 2 (18:40):
In schools, but I know, yeah, if it was.
Speaker 1 (18:43):
Mainstream, then we probably want to be talking about.
Speaker 2 (18:45):
That's true, that's true, that's true, all right, so so
that do you buy that duplex? How long did you
wait to buy your third property?
Speaker 1 (18:57):
The third property? I waited about a year from there. Okay,
I had to build up my cash. I never went
out looking until I had I we'll say, like thirty
to fifty thousand in the bank so that I would
be able to come up with a good down payment.
Speaker 2 (19:13):
And to save that thirty to fifty grand. That's just
saving money from your job and then saving the cash
flow from those first two properties.
Speaker 1 (19:23):
Yeah, like I said, the automatic savings is where it's at. Yeah,
you never miss it. If you never see it, you
really never miss it. And I mean I was making
I don't know, I'm a garbage man, so we make
pretty good money. But when I had first started, I
was making about, I don't know, around seven hundred to
(19:44):
eight hundred a month. So I figured, Okay, we'll draw
the line at seven hundred a month and anything over
we'll go right in the bank. And it just little
by little, little tiny bits were adding up, adding up,
and adding up. So by the time I was ab
or wanting to buy houses, I had over seventy thousand
(20:04):
dollars saved up in the bank, ready to go.
Speaker 2 (20:07):
Yeah. I mean, I think taking money out of your account,
that that automatic savings is so important because if you
have money in your bank, I think it's just human
nature to spend it or something will come up. But
if you don't see it, I think that makes a
big difference. All right, So then you saved up. What
(20:28):
was your third property?
Speaker 1 (20:31):
My third property was a home, another duplex, but it
was a much larger duplex. Bones of the house were solid.
It's built around early nineteen hundred nineteen oh two, I believe,
so it's an older house, but it has a lot
of cool character and features to it. Being two bedroom,
(20:53):
one bath upper, two bedroom, one bath lower made it
really easy in my head to rent.
Speaker 2 (21:00):
All right. So you get that property up and running,
and then how long did you wait to buy your
fourth property?
Speaker 1 (21:07):
About a year? Maybe a little bit more than a year.
Speaker 2 (21:10):
Was that another duplex?
Speaker 1 (21:14):
That one was a single family home. I had to
put about twenty thousand into it to upgrade electric and
then I moved some walls around and made it made
the flow of the house a lot better. So all in,
I'm thinking it's a little right, around one hundred thousand
all in on this house. But I only financed sixty
(21:37):
thousand of it because you know, I put twenty five
percent down on it when I.
Speaker 2 (21:41):
Bought it, right, Okay? And yeah, and.
Speaker 1 (21:44):
That house that was right around the COVID time when
I got that one, when COVID was going crazy, and
my payment on it was so low because the interest
rate was three and a half percent on it, so
the payment was like six hundred dollars a month or
(22:04):
I don't even I think it was sub six hundred
a month on that house. And I was getting sixteen
fifty for it. So it just incredible to me. Yeah,
a single family house and making over one thousand dollars
a month in income after expenses. I was blown away.
Speaker 2 (22:23):
So awesome, all right, and then your your fifth and
final deal. What's the latest property you bought?
Speaker 1 (22:30):
I actually have six, probably six, got to Yeah. I
bought two more duplexes. The the final one that I
bought was when our interest rates were going a little
bit crazy, and so that one is my highest interest
rate at seven point six percent. And I had bought
(22:54):
that one. It's in a pretty famous town. It's where
Groundhogs Day was filmed. But I had bought that house
and rents were just enough to cover the principal interest
payment on that so right away I had plans for
it to moving up because the rents were way way
(23:16):
below market and total for the entire house, I was
only making sixteen hundred total rent and now I'm making
about fifteen per unit on that house. So nearly doubled
my money on that place within two years of time
(23:38):
of owning it.
Speaker 2 (23:39):
Yeah, and then there was one more place.
Speaker 1 (23:43):
Yeah, the one that I bought before that was another
home in the same town, another duplex. That one is
a huge house. It's seven bedroom, three bath but it's
a duplex, so the upper is two beds and one
bathroom and then the lower is the remaining amount of
(24:05):
the five bedroom. It's it's a huge house. It has
pay for laundry in the basement too, so I'll go
over there every couple of months and I'll pull all
the quarters out of there. It's like one hundred, two
hundred and fifty dollars and just extra change that you
get every couple of months. So yeah, that one does
incredibly well too. After all my payments on that one,
(24:28):
I'm at about two thousand a month and in income
on that one, after all my all my expenses. I'm
putting two thousand a month in my pocket.
Speaker 2 (24:37):
So that the key to your story is saving up
down payments like that, that's really how you got to
where you are today. That it's it's you're just really
good at saving money.
Speaker 1 (24:51):
For me, that's what works. I'm not a fan of bills,
so as you could tell, I don't like having bills.
And the thing that's so amazing about investing in real
estate is that there's so many different ways to go
about it, so many different approaches, and not saying that
one other approach is better than mine or worse than mine.
(25:15):
There's so many different ways to make it in real estate.
You hold it long enough, you're going to make money
on it.
Speaker 2 (25:23):
Very true. Well, if anybody wants to reach out to Jeff,
I've got his contact information on the website. You can
find it at Rental incomepodcast dot com slash episode five
thirty four. I'd like to thank Chailey Ridge from Ridge
Lending Group for sponsoring today's episode. If Jeff inspired you
and you're ready to buy your first property or you
(25:45):
want to add to your portfolio, reach out to Chailey.
She has a ton of different loan programs and she
can find something that works for you. You can find out
more and track down Chailey at Ridge Lending Group n
MLS four two zero five six. Thank you so much
for checking out the podcast today. Make sure you hit
(26:09):
the follow button. That way you'll be notified when the
next episode comes out. My name is Dan Lane and
this has been the Rental Income Podcast
Inspiring interviews with Today is Top Landlord, This is the
Rental Income Podcast.
Speaker 2 (00:07):
And now Damnly, Jeffy, You've had some difficult situations that
your rentals have really helped you with. Can you tell
me what's happened.
Speaker 1 (00:19):
Well in the past. My son's mother, she had been
diagnosed three months after he was born with stage four cancer.
I was able to take off without having to worry
too much about bills or anything during that time and
just worry one hundred percent on family, especially in the
(00:39):
later part of her life before she passed. Recently, though,
back in May, I broke my hand bike riding with
my son, of all things, and I was able to
take off. I'm currently off now, but I'm able to
take off four months consecutively without worrying about having to
make any of those bills.
Speaker 2 (01:00):
Is living proof that having only one source of income
can be very dangerous. With his day job as a garbageman,
if he doesn't work, he doesn't get paid, and having
rental income has given him a lot of flexibility and security.
And on the show today, we're going to figure out
how jeff build a rental portfolio that provides him over
(01:21):
eight thousand dollars a month in cash flow. Joining us
on the podcast today from Fingerlake, Illinois is Jeff Has.
We'll take a quick break to thank our sponsors. We'll
come right back and we'll talk to Jeff. Are you
thinking about investing in rental properties but maybe you don't
know where to start. My friends at mid South home
Buyers make it simple. For over twenty three years, they've
(01:44):
been selling fully renovated, turnkey rental properties in Memphis and
Little Rock. We're talking new roofs, plumbing, electric kitchens, bathrooms.
Everything is brand new and done right. And here's the
best part. Every property comes with a well qualified tenant
in place before you close. That means you get cash
(02:05):
flow from day one. Plus, Midsouth continues to professionally manage
the property for you after the sale, and they back
it up with two powerful guarantees. You get a one
year total maintenance warranty and a lifetime occupancy guarantee. Personally,
I've bought five properties from them and I couldn't be happier.
(02:26):
If you want to talk to someone that's been through
the process, feel free to reach out to me. I'm
happy to answer any questions or if you're ready to
get started, just go to midsouthhome Buyers dot com. That's
midsouthhome Buyers dot com. It's a lot of work to
find a really good rental property, and when you actually
find that property, you want to make sure you're working
with a lender that can get that loan closed. The
(02:49):
lender that I recommend is jay Ley Ridge from Ridge
Lending Group. She's a nationwide lender and her specialty is
helping investors finance rental properties. She has a ton of
loan programs and she can find something customized to you
for your situation. If you want to find out more
or you're ready to get started today, just go to
Ridge Lendinggroup dot com. That's our Idge Lendinggroup dot com.
(03:14):
N MLS four two zero five six. Jeff, let's start
where you are today. What does your portfolio look like.
Speaker 1 (03:23):
I have six rental properties, two single families and four duplexus.
Speaker 2 (03:30):
And when did you start buying rentals?
Speaker 1 (03:34):
December of twenty seventeen was when I first jumped in.
I had a lot of headwinds, a lot of people
that were telling me it's a bad decision to buy
rental properties to have people in them. They're going to
destroy them on you. It's just going to cost you
money or you're not going to do well. And I
(03:56):
kind of took a step back and thought about it,
and not one of those people that were telling me
and giving me that advice actually owned rentals, either previously
or currently.
Speaker 2 (04:07):
Yeah, you know, it's so funny because the same thing
happened to me when I was thinking about buying rentals.
Everybody was so negative about it. But you're right, the
people that are most negative know nothing about real estate.
So did that slow you down or did that stop
you from getting started?
Speaker 1 (04:27):
It definitely made me nervous, made me kind of question myself.
I looked back and I had quite a few friends
in the trades, so that gave me a bit more confidence, saying, well,
if I get stuck on this or stuck on that,
well I can maybe ask them to help me out
or give some advice. I had a cousin who owned
(04:52):
one rental property, and I before I jumped in and
really got serious about trying to find one, and had
a conversation with him and I said, yeah, you know,
I hear how terrible it is and from everybody, He's like, no, no,
it's great. It's you know, you sign somebody to a
lease and you know here and there you gotta fix stuff,
(05:14):
but you get to write all those things off. It's great.
Speaker 2 (05:16):
It really is that it was like that bit.
Speaker 1 (05:18):
Of sunshine in the clouds that I needed to start.
And you know, my my goal was one every year,
four or five years, and I actually I did six
of them over that span.
Speaker 2 (05:34):
Now it seems like it was definitely a good move
for you buying rentals. You know, a lot of times
we look at the cash flow, but as far as
your net worth, what was your net worth before you
started buying rentals and what is it now?
Speaker 1 (05:51):
Uh, previous buying I went through a divorce actually was
a pretty good one as far as the forces go.
But I would say I was g twenty to fifty
thousand dollars net worth range at the most. And today
I'm closing in or right around the three million dollar mark.
Speaker 2 (06:11):
Three million dollars in really not that much time. That
is really awesome with also with not a huge portfolio,
you know, just buying one rental a year. Well, let's
take a look at your numbers and see how your
cash flow is working. So if you add up the
rent from all your rentals. How much rent do you
(06:32):
bring in every month eight monthly?
Speaker 1 (06:34):
Yes, thirteen yeah, about thirteen seven fifty roughly right now.
And I keep I keep the h I keep the
rents on the fairly lower side too.
Speaker 2 (06:46):
Why do you do that?
Speaker 1 (06:48):
The turnover is usually your most expensive part if you
have to. You know, when you clean out a place,
you're not only cleaning it out, but you're doing repair,
you're doing upgrades. You're going to get more rent when
you have a place that looks more up to date, cleaner.
You don't want to go in with putting somebody in
(07:10):
a place that you know already has problems or could
have problems not on the line, because it's much easier
to fix when nobody's living there.
Speaker 2 (07:18):
So you're not raising rent on your tenants, like once
they move in, you're keeping them at that rent.
Speaker 1 (07:25):
I will raise them. I do pay attention quite a
bit to the market in the area, and I'll raise them,
but I don't raise them as high as most places
are around. Like competitive, I keep mind very competitive. So
I if I lose somebody, it's because they bought a
(07:47):
house or they're moving out of town. It's rare that
they would move for any other reason than that.
Speaker 2 (07:56):
Okay, all right, that makes sense. All right, So thirteen
thousand and seven point fifty is your gross friend. How
much are your mortgage payments for all your properties?
Speaker 1 (08:09):
I'm right around between five thousand and fifty five hundred a.
Speaker 2 (08:14):
Month, okay, And that includes principal interests, taxes, insurance, everything.
Speaker 1 (08:19):
That's everything concluded.
Speaker 2 (08:22):
What about budgeting for repairs? Like, do you set a
certain amount of money aside every month or how do
you handle that?
Speaker 1 (08:30):
Yeah? So I've been a great natural saver my whole life,
and right now my average I average it, or my
minimum that I save is about four thousand a month
that I set to the side. I'll make extra payments
on principle and whittle down my mortgages as much as
(08:52):
I can. But put having that that buffer, and you
know on the side there helps out a lot.
Speaker 2 (09:00):
Okay. So you're just saving money in general so that
you have cash when something big comes up, but you're
not necessarily setting aside a certain amount per month for
each rental property.
Speaker 1 (09:14):
No, No, I've been on such a pattern. It start
way back in twenty ten. I started with not really
a goal in mind, but I was seeing how much
I was saving, and I was surprised at how little
I had in the bank compared to what I made
a week. So I budgeted myself and made automatic savings,
(09:37):
so I would only take home a certain amount every week,
and it would be the exact same amount every week.
And over the years, you know, you get raises, you
get promotions, and over the years, it just it built
up without me ever even noticing it.
Speaker 2 (09:55):
Right, Okay, so you've got thirteen thousand, seven fifty rand
fifty three hundred mortgages, so your cash flow is eight
four hundred and fifty before anything comes up. But that's
like on average every month, you're you've got about eight
(10:15):
thousand dollars a month that you're mostly setting aside.
Speaker 1 (10:20):
Yeah, I'll pay down, like I've gotten into investing quite
a bit in the stock market as well. In the past,
with me saving as aggressive as I have, it was
with a goal to buy another property within one year,
so I was prepared. You know, the best thing you
(10:40):
could do is always, even if you don't have a
goal in mine, prepare yourself so that when opportunities come up,
you're ready to pounce on it instead of sitting on
the sideline saying, ah, if I only had this or
if I only had that.
Speaker 2 (10:56):
Right, Right, So, when you're buying a property, it sounds
like you're saving up a down payment. So you're not
doing any kind of like creative financing or anything. You're
it sounds like you're saving a down payment for every purchase.
Speaker 1 (11:13):
Yeah, so I looked at all the different creative ways
of doing things in my head. If you're not if
you're not working hard enough to save the money, put
it to the side, if you're going out, you're borrowing
money from people to help you out, if you're not
(11:34):
really earning it and seeing how hard it is to
make it. If something comes up after you've invested that
it's easier for you to just kind of throw your
hands in the air and say I give up. This
is kind of like that blood, sweat and tears. You know,
you do all the work yourself, and it means more
to you as you accomplish things.
Speaker 2 (11:57):
Right, Okay, So as so, I guess when you set
the goal of one a year, buying one property a year,
that that was based on that you could save a
twenty or twenty five percent down payment over the course
of a year.
Speaker 1 (12:15):
Right, So if with who I was using to get
my loans through, I was able to get much lower rates.
Usually when you're an investor, you do pay extra on
your loan rates, and with me putting twenty five percent down,
it did two things. It got my loan rate a
(12:35):
lot lower and my cash flow was a lot higher.
So it set me up down the road in a
much better place.
Speaker 2 (12:43):
All right, Well, well let's let's figure out how you
built your portfolio. So let's go back to the very beginning.
What was your first rental property.
Speaker 1 (12:54):
My first one was a single family house about thirty
minutes from mine. It was a foreclosure bank foreclosure. It
overlooks a lake, so it has a It's in a
really beautiful area, and I had purchased that. It's not
a very big house. It's around one thousand square feet
(13:15):
to bed, one bath, attached, one car garage. I paid
ninety five thousand for it in twenty seventeen. The only
things I had to add were a refrigerator and then
I just added window treatments. So it was a very
easy one to turn and get some a tenant, and
(13:36):
I had a tenant in within about two weeks of
me purchasing it.
Speaker 2 (13:40):
Is that like typical for what you're looking for a
property that you can buy and start renting out right away.
Speaker 1 (13:48):
I'd say yes, But that was the easiest one, and
then after that it just bought more and more difficult one. Okay,
I had kind of a thing that I went by,
and that was, if I'm not willing to live in it,
I'm not going to rent it to anybody. So like
my second home that I bought was a duplex that
(14:09):
we kind of stumbled on, not knowing. Even my realtor
didn't know it was duplex because it wasn't listed as one.
So when we walked through it, we saw on the
there was like a deck in the backyard or a
staircase up to a deck. We went up there and
there's another door and we went inside and we're like, wow,
(14:29):
this is a studio apartment. So it was it was
a diamond in the rough for sure, because I mean,
they had it on the market for quite a long time.
So I was able to get it for one hundred
thousand dollars. And then right after I bought the house,
the town announced that they were going to make like
a river walk and they like revitalized the area that
(14:52):
was in and put a ton of money into the neighborhood.
So just me buying it, and if I didn't even
out the value the property want way higher. And now
that one hundred thousand dollars house that I bought in
March of twenty eighteen is at least two hundred and
fifty thousand value.
Speaker 2 (15:12):
Wow. Now with it not being advertised as a duplexit,
was it zoned as a duplexit? Did you have any
kind of trouble you or anything you had to do
with the county to make it legal to rent out
that other space.
Speaker 1 (15:30):
No, And that was what was funny, was it was
zoned or to be legal to be a multi family.
But I'm not sure if it was a newer real
estate agent or what that they didn't properly code it
in the MLS. But even in the description of it,
they never even bring up that there's an apartment overhead.
(15:52):
And I at the time too, if you think back
to like the twenty eighteen when I bought that house,
I don't think duplexes or multifamilies are all that desirable,
So that might have been one of the things that
they thought about. Well, let's just leave.
Speaker 2 (16:08):
That out right. Wow, well, well, good for you for
finding that. How long did it take from the time
that you bought that first property to that duplex?
Speaker 1 (16:19):
Like?
Speaker 2 (16:19):
How long? How long did you wait for that? So the.
Speaker 1 (16:26):
House that I bought originally the first one was December
of twenty seventeen. It went so well that I started
looking in January at another place, and by March I
had purchased my next one. So over a four month span,
I had already closed on my next property.
Speaker 2 (16:46):
Now did you notice the difference? A lot of people
prefer single families or some people preferred duplexes. It sounds
like you bought a lot of duplexes. Like do you
find duplexes are better rental or do you have a preference?
Speaker 1 (17:03):
So they're definitely better rentals for cash flow, so I
make quite that one. In fact, when I started renting it,
that was when the light bulb turned out in my
head that I can chain trade a paycheck for one
month's rent on a house. And that turned my My
(17:24):
goals were completely changed by just that house right there.
My cash flow is so high it replace the paycheck.
So in my head, I go, okay, now, from now on,
when I buy houses, I'm going to figure in that
I make enough cash flow that I replace a paycheck,
so then I will be completely financially independent at that point.
Speaker 2 (17:42):
Wait, explain that. So you buy a property and the
cash flow from that property is equal to your paycheck
from your job.
Speaker 1 (17:50):
Yeah, equal or greater than my take home pay for
my job. Yeah. So I think I had mentioned to
you before that you know, you can make a undred
thousand a year and a third of that has gone
to taxes right away. So we'll say, on the high side,
you're going to take home seventy five thousand an actual
(18:12):
take home or seventy to seventy five thousand my job.
I have to work about twenty six hundred hours a
year to make that. With the rental properties I'm figuring
out that I'm using. I'm making over one hundred thousand
dollars and I'm spending like sixty.
Speaker 2 (18:32):
Hours a year doing much better deal.
Speaker 1 (18:35):
Right, it's mind blowing. Yeah, it's yeah, it's surprising that
this stuff isn't taught.
Speaker 2 (18:40):
In schools, but I know, yeah, if it was.
Speaker 1 (18:43):
Mainstream, then we probably want to be talking about.
Speaker 2 (18:45):
That's true, that's true, that's true, all right, so so
that do you buy that duplex? How long did you
wait to buy your third property?
Speaker 1 (18:57):
The third property? I waited about a year from there. Okay,
I had to build up my cash. I never went
out looking until I had I we'll say, like thirty
to fifty thousand in the bank so that I would
be able to come up with a good down payment.
Speaker 2 (19:13):
And to save that thirty to fifty grand. That's just
saving money from your job and then saving the cash
flow from those first two properties.
Speaker 1 (19:23):
Yeah, like I said, the automatic savings is where it's at. Yeah,
you never miss it. If you never see it, you
really never miss it. And I mean I was making
I don't know, I'm a garbage man, so we make
pretty good money. But when I had first started, I
was making about, I don't know, around seven hundred to
(19:44):
eight hundred a month. So I figured, Okay, we'll draw
the line at seven hundred a month and anything over
we'll go right in the bank. And it just little
by little, little tiny bits were adding up, adding up,
and adding up. So by the time I was ab
or wanting to buy houses, I had over seventy thousand
(20:04):
dollars saved up in the bank, ready to go.
Speaker 2 (20:07):
Yeah. I mean, I think taking money out of your account,
that that automatic savings is so important because if you
have money in your bank, I think it's just human
nature to spend it or something will come up. But
if you don't see it, I think that makes a
big difference. All right, So then you saved up. What
(20:28):
was your third property?
Speaker 1 (20:31):
My third property was a home, another duplex, but it
was a much larger duplex. Bones of the house were solid.
It's built around early nineteen hundred nineteen oh two, I believe,
so it's an older house, but it has a lot
of cool character and features to it. Being two bedroom,
(20:53):
one bath upper, two bedroom, one bath lower made it
really easy in my head to rent.
Speaker 2 (21:00):
All right. So you get that property up and running,
and then how long did you wait to buy your
fourth property?
Speaker 1 (21:07):
About a year? Maybe a little bit more than a year.
Speaker 2 (21:10):
Was that another duplex?
Speaker 1 (21:14):
That one was a single family home. I had to
put about twenty thousand into it to upgrade electric and
then I moved some walls around and made it made
the flow of the house a lot better. So all in,
I'm thinking it's a little right, around one hundred thousand
all in on this house. But I only financed sixty
(21:37):
thousand of it because you know, I put twenty five
percent down on it when I.
Speaker 2 (21:41):
Bought it, right, Okay? And yeah, and.
Speaker 1 (21:44):
That house that was right around the COVID time when
I got that one, when COVID was going crazy, and
my payment on it was so low because the interest
rate was three and a half percent on it, so
the payment was like six hundred dollars a month or
(22:04):
I don't even I think it was sub six hundred
a month on that house. And I was getting sixteen
fifty for it. So it just incredible to me. Yeah,
a single family house and making over one thousand dollars
a month in income after expenses. I was blown away.
Speaker 2 (22:23):
So awesome, all right, and then your your fifth and
final deal. What's the latest property you bought?
Speaker 1 (22:30):
I actually have six, probably six, got to Yeah. I
bought two more duplexes. The the final one that I
bought was when our interest rates were going a little
bit crazy, and so that one is my highest interest
rate at seven point six percent. And I had bought
(22:54):
that one. It's in a pretty famous town. It's where
Groundhogs Day was filmed. But I had bought that house
and rents were just enough to cover the principal interest
payment on that so right away I had plans for
it to moving up because the rents were way way
(23:16):
below market and total for the entire house, I was
only making sixteen hundred total rent and now I'm making
about fifteen per unit on that house. So nearly doubled
my money on that place within two years of time
(23:38):
of owning it.
Speaker 2 (23:39):
Yeah, and then there was one more place.
Speaker 1 (23:43):
Yeah, the one that I bought before that was another
home in the same town, another duplex. That one is
a huge house. It's seven bedroom, three bath but it's
a duplex, so the upper is two beds and one
bathroom and then the lower is the remaining amount of
(24:05):
the five bedroom. It's it's a huge house. It has
pay for laundry in the basement too, so I'll go
over there every couple of months and I'll pull all
the quarters out of there. It's like one hundred, two
hundred and fifty dollars and just extra change that you
get every couple of months. So yeah, that one does
incredibly well too. After all my payments on that one,
(24:28):
I'm at about two thousand a month and in income
on that one, after all my all my expenses. I'm
putting two thousand a month in my pocket.
Speaker 2 (24:37):
So that the key to your story is saving up
down payments like that, that's really how you got to
where you are today. That it's it's you're just really
good at saving money.
Speaker 1 (24:51):
For me, that's what works. I'm not a fan of bills,
so as you could tell, I don't like having bills.
And the thing that's so amazing about investing in real
estate is that there's so many different ways to go
about it, so many different approaches, and not saying that
one other approach is better than mine or worse than mine.
(25:15):
There's so many different ways to make it in real estate.
You hold it long enough, you're going to make money
on it.
Speaker 2 (25:23):
Very true. Well, if anybody wants to reach out to Jeff,
I've got his contact information on the website. You can
find it at Rental incomepodcast dot com slash episode five
thirty four. I'd like to thank Chailey Ridge from Ridge
Lending Group for sponsoring today's episode. If Jeff inspired you
and you're ready to buy your first property or you
(25:45):
want to add to your portfolio, reach out to Chailey.
She has a ton of different loan programs and she
can find something that works for you. You can find out
more and track down Chailey at Ridge Lending Group n
MLS four two zero five six. Thank you so much
for checking out the podcast today. Make sure you hit
(26:09):
the follow button. That way you'll be notified when the
next episode comes out. My name is Dan Lane and
this has been the Rental Income Podcast
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