I have a friend who has worked in the medical field for about 15 years. Even though he has a decent retirement and is making regular contributions to his 401(k), he realized a while ago that there were four or five layers of financial managers that were taking a percentage off of his contributions at each level. He recognized that there had to be an alternative income source with a better profit structure and wanted to diversify his investments, but he wasn’t sure where to invest. So he called me one day and asked if I would meet with him for coffee and explain my rental property philosophy and experience.
A few days before we met up, I ended up looking at some duplexes for sale, but I was on the fence about whether or not to purchase them. When my buddy and I got to talking, I told him about my dilemma and shared some more details about the duplexes. I told him they could have great cash flow if someone put 20% down, and he expressed a lot of interest in purchasing the properties himself. By the time we finished our coffee, he had decided that he was going to put in an offer on the duplexes.
It turns out that he was able to get the duplexes for a great deal. The property definitely required some love, but he was able to get them fixed up and rented. A year later, he bought another rental property and rented it out as well.
In the beginning stages, my friend expressed that about five properties was his goal, so once he got there, he was content with the scale of his operation and has now been there for several years. Because he set a plan for himself and was disciplined with his money to execute that plan, he was able to reach his goal pretty quickly. Now, he has a great system in place of managing his properties and taking care of his tenants. By the time his properties get paid off, they will probably bring in $4,000 a month.