100+ Tenants, 8 Hours per Week

[Mark Mahoney]

Okay, well let’s start off by saying “100 Tenants” makes it seem like I have 100 units.

That is not the case.

I took a short cut to real estate investing.

Let me explain how...

I started off in real estate investing by house hacking my house into a “sober house” and snow balled from there.

A sober house is a safe place for addicts and alcoholics to live while they rebuild their life.

It is a comfortable place for them to reside with their peers.

I come from the Forever-appreciating Boston market where rental cash flow is almost impossible.

So I had to get creative.

My house is a two family in a good area.

Using it as a typical rental would negative cash-flow.

Several years ago, the tenants moved out of the bigger unit and we were losing money every month.

We turned it into a sober house.

We put a couple beds in each room, got certified, and started filling them.

In my market, a sober house bed rents for $200/week.

After filling the entire house and maintaining it for years, we spread our wings.

We converted/managed a friend of mine’s rentals into sober houses.

He started with 3 homes. A total of 5 units. 1 single family. 2 duplexes.

This was at least 40 beds.

That grew exponentially...

In one year, he was able to turn the 5 units into 13.

He added on 1 more single family, a 10-unit boarding house, and a 2-family.

Another 50 beds roughly.

I was able to buy into this 2.6M for extremely low due to the fact that it was almost useless without me managing them.

Here’s the breakdown:

Quincy - 20 beds

Quincy - 15 beds

Quincy - 14 beds

Weymouth - 10 beds

Weymouth - 15 beds

Weymouth - 17 beds (mine)

Dorchester - 14 beds

With these shorter term rentals, there are typically a lot more problems.

In the wise words of a philosopher, “Mo’ Money, Mo’ Problems” (Diddy)

There is a lot of over head and A LOT of issues for management to deal with.

I already work 50 hours a week at my main job.

I was able to put systems in place to decrease my work load on my side hustle and increase my time spent with family.

Don’t get me wrong - it’s not perfect.

I still get calls at midnight and unlike a regular landlord - I have to show up.

I still have to leave my family on a Saturday night to clean up a mess.

But that being said, I have developed systems to turn a 80 hour job into a 8 hour job.

I’m not exaggerating- it’s an 80 hour gig.

My brother and I are a team.

We hired an assistant to fill beds and to deal with some of the management.

30 hours of work —> 0 hours

We hired a manager for every unit who deals with day-to-day management and rent collections.

42 hours —> 0 hours

I have reports that managers send out. I have the assistant deal with some of the messes. I have the assistant type up incident reports. I have managers do intake/discharges. I have managers meet the residents directly for rent collections.

In turn, they meet me and I make decisions and handle anything they can’t. I meet the managers of each house for rent collections.

When the manager isn’t home, I have to clean up the mess.

When the manager isn’t home, I have to collect rent.

When the manager isn’t home, I have to move residents in.

When the manager isn’t home, I have to move residents out.

When the manager isn’t home, I have to do everything.

At the end of the day, you get what you pay for.

At the end of the day, it’s my responsibility to deal with everything.

So whether there is or isn’t a manager, or he is or isn’t home, it’s my responsibility to make sure the job gets down.

But, that being said - I have found a way to work 50 hours a week at my main gig and work only 8 hours at my side gig.

This was done using Systems!

Systems are key.

Systems are what are going to allow me to eventually only have to work 1 hour a week and get paid the same.

It’s still a work in progress, but I wanted to share.