How much money can you actually make a year starting out?

Question

JD Martin · Answer

I think you're going to find that most people are not going to share specific info, myself included. That said, it took me less than 2 years to equal my W2 income from real estate investments on an annual basis. I still work in my field, which I enjoy, but if I decided tomorrow I didn't want to anymore I would be fine.

Caveat: I started out with a decent chunk to invest through regular savings and "living below my means". I wasn't one of the umpteen posters with no money, no income, and wants to be independently wealthy that you see on here almost every day. I busted ass for a lot of years and did without lots of the niceties in order to save a good nest egg. Real estate investing with no money really just doesn't happen, though you will find some people on here that will say otherwise, and I'm sure there's exceptions to everything.

Michael Le · Answer

For some it might be personal, as in they don't want to share that information... but really it's just personal, in that it really depends on your situation. If you're fresh out of school making $30k a year and have nothing saved up and trying to buy properties with no money down and seller financing, your numbers are going to be way off from someone coming in with a $1 million in capital. There is no average because people start in different situations, in different cities, in different parts of the real estate cycle.

If I had a $1m and started in 2010 right when everything was about to turn around, I could have made a killing if I was flipping houses in San Francisco or buying apartments in Dallas. If my first year was 2008 in Los Angeles or Miami I might still be underwater.

Mark Gallagher · Answer

@Arthur Lyons

If I said I've been doing it 6 months and have made $1M, would that make you work harder?! If so.. it's been 6 months and I've made $1M! Now get out there and make that money!

Seriously though, how much do you want to make? Set goals, and work to achieve those goals.

Steve K. · Answer

@Arthur Lyons You've asked a very bold question. I'm starting out and was curios about the same but knew there were no straight answers. I appreciate the folks who shared their information.

Jason Dale · Answer

welp my first property cash flowed about 120/mth...so my first year I made 1440 that first year in cash flow. The equity build up and appreciation combined equally about 1000/mth, so there's that...but that kind of gain doesn't really mean a whole lot right out of the gate.

Combine this paltry sum to the fact that in my country banks will only allow you to add 50% of your rental income to your income statement when qualifying you for a loan and it makes it impossible to BRRRR properly. (imagine qualifying for a loan with a 400K mortgage on the books that the bank only acknowledges 9600/year in income (instead of closer to 20K) basically, you can't).

So what to do? THINK OUTSIDE THE BOX! Once I complete an addition and a zone change I'll have a 5plex in place of the current duplex. I bought the duplex for 375K and anticipate 250K in renovations and zone change application costs. When the 5plex is complete it will be worth between 850k-900k. I will then sell the place (only way to get the full amount of equity out) and pocket after closing costs between 180K and 200k.

Notice all of the will do and maybes scattered throughout that goal. It's a solid plan, but it still needs implementation. But worst case scenario, the thing cash flows positive and in 25 years will be paid for...so ho hum, but at least the risk is nonexistent.

Latoya Gordon · Answer

You make what you want, pretty much just as @Mark Gallagher said, "Set goals, and work to achieve those goals." So get your head and behind into it! I just made 80K and its only 2nd day in the year, but it did not take me 90 days..... just 60 (smiles)

Its the education, location, and people you are learning from. I suggest you find someone on the level you want to be on and stop being scared and move, and move quick money waits for no one only the driven get it 1st!

Now I just said I made 80K and its only "January", lol ..... My personal goal is $1M by October, happy investing!

Linda S. · Answer

I agree with everyone here, you're asking for a number, but it really all depends on your strategy.     You're comparing apples to oranges, and asking for a number.    It's not logical, because it's not specific to the type of investment.    I personally do cash only deals, where we take on all the debt, and have the property pay itself and the renovations off, so while the current CF is zero, in X years, it will be thousands... again, all depends on the strategy.

Also, the intangible qualities you can't quantify-- hustle, sacrifice and drive.. those determine a heck of a lot more than base CF in a year.    There isn't a get rich quick fix, it's hard work.

G Pyros · Answer

Don't let money be your motivation, you have to thoroughly enjoy real estate to be the most effective. I am a seasoned equity/option buyer and want to expand my horizons for the simple fact I enjoy the challenge. However, money was NEVER the motivation, it is the reward, for some, the benchmark.

Lee S. · Answer

it's possible to turn 5k into 1 million in a year if you 100% live it.  I haven't done it but I did enough this last year to see that it is achievable.  I'm on a slow build to 1 million a year, I plan to do it in 3 years worst case.

How much money can you actually make a year starting out?

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