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Updated about 9 years ago on . Most recent reply
![Liam Goble's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/162947/1621420452-avatar-liam_goble.jpg?twic=v1/output=image/cover=128x128&v=2)
The value of hustle
I've been investing in real estate for a little over three years now. Many of my family and friends say I'm crazy to be investing, especially with the time I spend working on my properties. I sub out some of my work, but keep most work 'in house' and utilize my own oatmeal power (ie: elbow grease or hustle).
Quantifying the value of my hustle can be difficult, but I'll give it a try.
I currently own seven units. Over the past three years, I estimate I have spent 2,500 hours in the field and an additional 1,000 hours behind the desk to build my business. I actually enjoy the time I spend in the field and behind the desk, so it's not a grind, but this time spent is why my friends think I'm crazy. They don't want to spend Friday nights sanding drywall - they prefer drinking around a camp fire. They don't want to spend Saturday afternoons painting or laying tile - they prefer to watch the Nittany lions.
At this point, I now cash flow $1,217 per month and pay myself $364/month to manage the properties, for a total net income of $1,681 per month. If we assume that I actually spend time each month managing tenants, then I 'earn' the $364 per month just as I would at a job, so that money shouldn't be counted in my hustle income.
The $1,217 is cash flow, or additional profit from my units after accounting and paying for OpEx, debt service, and reserves (vacancy and repairs/CapEx). I consider this $1,217 my 'hustle' money.
Now, at this point, only three years into my investing career, my hourly hustle rate isn't great, a total of about $1,217/month x 12 months x 1.5 (fudge factor for variable lengths of ownership) = $21,906 / 3,500 hours = $6.26/hr. Not great, less than minimum wage.
Let's consider five years hence. If I don't change my rent over the next five years and assuming any additional time I spend in my properties is paid through my management and repair reserves, then I will have earned $1,217/month x 12 months x 5 years = $73,020 / 3,500 hours = $20.86. This is a compound annual growth rate of 27%.
Real estate is about the long view. Today, my hourly rate isn't great, but compounded over time, the work I put in today is worth significantly more than the value of that beer around the camp fire or the ability to watch the game.
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![Bryan O.'s profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/244133/1621435791-avatar-bryanotteson.jpg?twic=v1/output=image/cover=128x128&v=2)
Now I'll wait for a year to hear you post a rant about "All my friends are pissed that I'm so 'lucky' because I worked my butt off! Is it legal to punch people when they deserve it?"
It certainly is :) Great job and thanks for the post.