All Forum Posts by: Kyle Richey

@Whitney Hutten Good to know, thanks! I'm curious: What % of gross rent is recommended for reserves? Or is it more of a total amount (e.g. X months of expenses saved)?

Is rental property investing best for long-term wealth building, or is it possible to make a substantial monthly income from it too?

I'd love to hear stories from people that are making $5,000-$10,000+ per month in profit from rental property investing.

Here's why: I'm in my early 30's and run a successful business with a comfortable salary, so now I have two financial goals:

1. Diversify my income.

2. Build wealth for retirement.

I'm trying to decide between building another business and continuing to passively invest in an index fund and Roth IRA, or if I should start investing in rental properties. I don't have enough extra capital to invest seriously in all three, so I'd prefer to focus my time/money.

So, while I feel confident in my next business idea, I also know that about 2/3 of the businesses I've created over the years have failed to turn a significant profit, so real estate seems like a better way to diversify.

Here's the problem: From everything I'm reading, it seems like the cashflow from rental properties is relatively low on average (e.g. $200/month/unit seems to be a common example). It also seems like it's best to reinvest the cashflow over decades to build wealth and set yourself up for retirement. That's awesome, but that wouldn't help with my first goal of diversifying my income.

So, I'd love to know if it's feasible to build up to a reasonable monthly income ($5,000+) within 5 years of starting to buy rental properties, even if that means not reinvesting any of the profit.

I'm totally willing to put in the work, but if this strategy is best for long-term wealth building, knowing that upfront will help me decide whether or not to pursue a second business.

Thanks!

@Whitney Hutten This is awesome, thanks so much! I love what you said about being 100% occupied or vacant, and it's great to hear that $175/month profit per door is totally doable. I'm really curious: Is that for single- or multi-family?

Side note: I was born in Boulder and I'm thinking of investing in Colorado. :)

@Andrew Varney That's great to hear, thanks for the detailed reply!

Thanks for the quick replies. Seems like this makes the BRRRR method or "recycling" your initial investment in several properties pretty difficult.

So is the key to have strict criteria for buying the property at below market value, and doing high-impact, low-cost renovations to raise the rent?

Hi, I'm new to real estate investing and I'm really enjoying the BP community!

The BRRRR method seems like a great choice for our goals, but even after watching the BP video on cash-out refinancing I'm confused about one thing:

Doesn't the cash-out refi increase the mortgage payment, which would decrease your cashflow?

I'm reading a lot about focusing on cashflow in Brandon's book, this blog, etc. and a lot of properties seem to only have $200/month or so in positive cashflow, so it seems like cashing out 80% of your equity could easily raise the mortgage payment to the point of eliminating the cashflow.

Am I missing something? Thanks!