Buying Properties all cash

[Khurram Chaudhary]

My business partner and I bought our first rental property all cash several months ago. We have put a decent amount into the property to make it enjoyable for the tenants. We are in an area with high turn over due to the market and don’t anticipate any problems filling the property. 

Our plan is to buy one property each year all cash until the interest rate decline a little bit.

We might have 5-6 properties by then and want to use the equity to buy multiple properties in the same location or maybe large apartment complexes in middle America.

My question is: What is the best way to use this equity (since we will not have any mortgages) once the interest rate declines.

Our ultimate goal is to have a substantial amount of monthly profit which will allow us to decrease the time we have to dedicate to our w-2 jobs. 

Thanks in advance! 

-K

[Alecia Loveless]

@Khurram Chaudhary I’ve been working a 40 hour/week 3rd shift job the entire time I’ve been building my portfolio to 7 buildings 25 doors.

On average I figure it takes me 14 hours/ month to manage it. 8 hours/month to visit the properties (2 per week) because I like to make sure lawn maintenance is being kept up with, plowing is done correctly, trash is picked up, and coin laundry is checked. 4 hours to deal with banking and bill payments and maybe 2 hours to deal with actual tenant issues.

I have given my tenants both my number and my contractor’s number if they have issues and most of them just go directly to my contractor which is fine because he will either fix the problem or figure out who needs to fix the problem. Basically I’m just the middleman if they contact me.

I’ve just given my notice at work and will be going full time with my real estate before the New Year. I’m not sure the timing is right, but I’ve been encouraged by others to follow my passion after 15 years on 3rd shift.

I think if you have a good team and plan in place you can have a 40 hour job and also manage your own properties. It might be harder if you have a job where you just can’t answer the phone during work hours but perhaps that is a negotiable point with your boss/supervisor. When I went to work for this company 3 years ago I let them know that my real estate came first and that the calls wouldn’t be often but I would have to take them occasionally.