Artwork

Player FM - Internet Radio Done Right
Checked 20d ago
Added nine weeks ago
Content provided by Cole Baltz. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Cole Baltz or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://ppacc.player.fm/legal.
Player FM - Podcast App
Go offline with the Player FM app!
icon Daily Deals

Why the 1% Rule Will Make You Go Broke in Real Estate

6:34
 
Share
 

Manage episode 490646971 series 3666273
Content provided by Cole Baltz. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Cole Baltz or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://ppacc.player.fm/legal.

Send us a text

The real estate investing world is full of so-called "rules" that promise success, but few are as potentially destructive as the popular 1% rule. As someone who balances being a legacy airline pilot, military instructor, and property investor, I've seen firsthand how this oversimplified formula leads well-meaning investors straight to financial trouble.
Today's property market with interest rates exceeding 7% makes this rule particularly dangerous. Let me walk you through the harsh reality: that $100,000 property generating $1,000 monthly might seem promising on paper, but once you factor in mortgage payments ($700+), property management (10%), property taxes ($300+), and utilities ($100+), you're operating at a loss before any maintenance issues even arise. And they will arise – no property exists without eventually needing a new roof, furnace, or major repair.
I share a concrete example from my own portfolio to illustrate what actually works: a $68,000 property generating $1,100 monthly rent (far exceeding the 1% threshold). This substantial margin provides the breathing room necessary for real-world property ownership. The investors who succeed don't blindly follow formulas – they meticulously analyze cash-on-cash returns after accounting for all expenses, both predictable and unpredictable.
If you're serious about building wealth through real estate, you need to look beyond simplistic rules and understand the complete financial picture. When someone tries selling you on a property because "it meets the 1% rule," they're counting on your inexperience. Join me as I continue sharing lessons learned the hard way, so you don't have to experience the same painful and expensive education. Subscribe now for regular insights that cut through the myths and reveal what really drives successful property investing.

  continue reading

Chapters

1. Introduction & The 1% Rule Explained (00:00:00)

2. Why the 1% Rule Fails Today (00:00:25)

3. Hidden Property Expenses Breakdown (00:01:09)

4. Better Approach: Cash-on-Cash Returns (00:02:38)

5. Real Property Example & Conclusion (00:04:36)

28 episodes

Artwork
iconShare
 
Manage episode 490646971 series 3666273
Content provided by Cole Baltz. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Cole Baltz or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://ppacc.player.fm/legal.

Send us a text

The real estate investing world is full of so-called "rules" that promise success, but few are as potentially destructive as the popular 1% rule. As someone who balances being a legacy airline pilot, military instructor, and property investor, I've seen firsthand how this oversimplified formula leads well-meaning investors straight to financial trouble.
Today's property market with interest rates exceeding 7% makes this rule particularly dangerous. Let me walk you through the harsh reality: that $100,000 property generating $1,000 monthly might seem promising on paper, but once you factor in mortgage payments ($700+), property management (10%), property taxes ($300+), and utilities ($100+), you're operating at a loss before any maintenance issues even arise. And they will arise – no property exists without eventually needing a new roof, furnace, or major repair.
I share a concrete example from my own portfolio to illustrate what actually works: a $68,000 property generating $1,100 monthly rent (far exceeding the 1% threshold). This substantial margin provides the breathing room necessary for real-world property ownership. The investors who succeed don't blindly follow formulas – they meticulously analyze cash-on-cash returns after accounting for all expenses, both predictable and unpredictable.
If you're serious about building wealth through real estate, you need to look beyond simplistic rules and understand the complete financial picture. When someone tries selling you on a property because "it meets the 1% rule," they're counting on your inexperience. Join me as I continue sharing lessons learned the hard way, so you don't have to experience the same painful and expensive education. Subscribe now for regular insights that cut through the myths and reveal what really drives successful property investing.

  continue reading

Chapters

1. Introduction & The 1% Rule Explained (00:00:00)

2. Why the 1% Rule Fails Today (00:00:25)

3. Hidden Property Expenses Breakdown (00:01:09)

4. Better Approach: Cash-on-Cash Returns (00:02:38)

5. Real Property Example & Conclusion (00:04:36)

28 episodes

All episodes

×
 
Send us a text Ever wonder how some investors seem to close deals overnight while others struggle for months? The secret isn't luck or connections—it's preparation and relationships. I recently transformed an ordinary text message into a fully-funded real estate deal in just 35 minutes. This wasn't through some complex strategy or inside connection, but rather by applying fundamental principles anyone can use: emotional discipline during negotiations, strong relationships with lenders, and a clear understanding of my investment numbers. The property—a $60,000 three-bedroom house in Milwaukee—demonstrates why staying grounded in your investment criteria is crucial. When competing offers pushed the price up, I increased my offer by only $1,000 rather than getting caught in an emotional bidding war. As I often remind myself: if your deal is good at $60K but bad at $61K, it probably wasn't a good deal to begin with. This disciplined approach has protected my portfolio numerous times. The most powerful moment came when funding was secured. Because I had built trust with my hard money lender through multiple successful deals, they pre-approved my loan within 31 minutes of my email—no lengthy applications or endless documentation required. This efficiency illustrates why relationship-building might be the most underrated skill in real estate investing. While the $600 monthly cashflow this property will generate isn't life-changing, the $60-70K in equity potential absolutely is. This perfectly captures why focusing on buying below market value creates wealth far faster than chasing cash flow alone. Rome wasn't built in a day, and neither is a sustainable real estate portfolio. What steps are you taking to build relationships with potential funding partners? Your next deal might be just one text message away.…
 
Send us a text Unlocking the hidden power of real estate equity could be the key to exponential portfolio growth—yet so many investors leave millions in potential wealth sitting idle. As a part-time real estate investor juggling careers as both an airline pilot and military instructor, I've built a portfolio valued at nearly $5.9 million with approximately $2.3 million in equity, all starting from a single flip house. Equity represents the spread between what you owe and what your property is worth—and it's where true wealth accumulation happens in real estate. While monthly cash flow might seem attractive (my properties generate $55,000 in gross monthly rents), the long-term equity growth often proves far more powerful. Through this video, I open my actual portfolio spreadsheet to show exactly how equity positions build through various methods: buying below market value, forced appreciation through renovations, natural market appreciation, rising rents, and simple time in the market. My Milwaukee properties showcase how dramatically equity can build—some purchased just four years ago have already moved from 80% loan-to-value to under 40%, representing hundreds of thousands in gained equity per property. But this creates a fascinating dilemma: my portfolio now contains $2.3 million in "idle equity" that could theoretically fuel expansion to over $10 million in total portfolio value if leveraged properly. However, accessing this equity isn't as simple as many online real estate gurus suggest. Cash-out refinancing comes with significant limitations, particularly when it means replacing 4% interest rates with today's 6-7% rates. I share my current strategy for deploying this equity through portfolio purchases and value-add opportunities while maintaining the delicate balance between aggressive growth and financial stability. Whether you're just starting your real estate journey or looking to scale your existing portfolio, this transparent look at real numbers and actual properties will help you develop a more sophisticated approach to building wealth through property equity. Like and subscribe if you found this valuable, and comment with questions about your own real estate investing challenges!…
 
Send us a text A rare glimpse behind the curtain of real estate investing reveals what actually works—and it's probably not what you've been told. Cole, a part-time real estate investor balancing a full-time airline career and military instructor role, shares the unvarnished truth about his 60-unit portfolio generating $55,000 monthly in gross income. Unlike the glossy success stories that promise quick riches, Cole demonstrates why focusing on smaller properties in Milwaukee has outperformed the conventional wisdom of chasing large apartment buildings. Three duplexes bringing in $6,000 monthly versus a four-unit at $4,000 with identical down payments? The math speaks for itself, especially when institutional investors are overpaying for larger complexes. The portfolio's financial reality deserves attention: roughly $17,800 in monthly loan payments, $6,400 for property taxes, $2,200 toward insurance, plus property management and capital expenses. While this leaves theoretical monthly profits of $8,000, Cole reveals why that number rarely materializes as planned. More importantly, he shares the discipline that's accelerated his wealth-building—reinvesting every dollar back into the business rather than extracting it for lifestyle expenses. Perhaps most valuable is Cole's insight into equity growth as the true wealth-builder in real estate. While cash flow keeps the operation running, the equity accumulation represents life-changing wealth. It's a refreshingly honest perspective in a field often characterized by exaggerated claims and overnight success stories. Want to build lasting wealth through real estate? Subscribe now for Cole's upcoming videos on equity management strategies and detailed property breakdowns that show exactly how his portfolio functions in the real world.…
 
Send us a text The real estate investing world is full of so-called "rules" that promise success, but few are as potentially destructive as the popular 1% rule. As someone who balances being a legacy airline pilot, military instructor, and property investor, I've seen firsthand how this oversimplified formula leads well-meaning investors straight to financial trouble. Today's property market with interest rates exceeding 7% makes this rule particularly dangerous. Let me walk you through the harsh reality: that $100,000 property generating $1,000 monthly might seem promising on paper, but once you factor in mortgage payments ($700+), property management (10%), property taxes ($300+), and utilities ($100+), you're operating at a loss before any maintenance issues even arise. And they will arise – no property exists without eventually needing a new roof, furnace, or major repair. I share a concrete example from my own portfolio to illustrate what actually works: a $68,000 property generating $1,100 monthly rent (far exceeding the 1% threshold). This substantial margin provides the breathing room necessary for real-world property ownership. The investors who succeed don't blindly follow formulas – they meticulously analyze cash-on-cash returns after accounting for all expenses, both predictable and unpredictable. If you're serious about building wealth through real estate, you need to look beyond simplistic rules and understand the complete financial picture. When someone tries selling you on a property because "it meets the 1% rule," they're counting on your inexperience. Join me as I continue sharing lessons learned the hard way, so you don't have to experience the same painful and expensive education. Subscribe now for regular insights that cut through the myths and reveal what really drives successful property investing.…
 
Send us a text Imagine going from the cockpit of a commercial jet to facing unemployment overnight. That's exactly what happened when COVID-19 devastated the aviation industry and left me questioning everything I'd built. This raw, honest conversation explores the harsh reality of career vulnerability and the steps I took to rebuild financial security. The panic I felt during those first days of unemployment was real. Despite years of specialized training and experience as an airline pilot, I suddenly found myself competing with thousands of other displaced aviation professionals for vanishingly few opportunities. Had it not been for my part-time military flying position, I might have found myself back delivering mail in Milwaukee—a sobering thought that fundamentally changed my approach to financial planning. Today's job market faces threats beyond pandemics. Artificial intelligence, automation, and technological disruption pose existential risks to careers across industries. Whether it's a pilot losing their medical certification or an office worker being replaced by AI, the message remains the same: having all your income dependent on a single source is increasingly dangerous. Through my journey into real estate investing—starting small with single properties and gradually building a self-sustaining portfolio—I've created a financial safety net that gives me peace of mind regardless of what happens with my flying career. Whether you already feel the anxiety of potential job displacement or simply want to strengthen your financial position, now is the time to act. Start learning, saving, and planning for your first investment property while you still have stable employment. The security of knowing you can weather career disruptions is invaluable, and the autonomy of building something that's entirely yours brings satisfaction beyond just financial returns. What steps will you take today to protect your financial future?…
 
Send us a text Challenging conventional wisdom can be difficult, but sometimes the numbers tell a story that can't be ignored. As a successful real estate investor managing a multi-million-dollar portfolio, I've made the counterintuitive choice to rent my personal residence rather than own it—and today, I'm sharing the eye-opening math behind this decision. After comparing my comfortable $1,900/month rental apartment to a similar condo for sale in Milwaukee, I discovered a staggering financial gap. The comparable condo, priced at $475,000, would cost approximately $4,800 monthly when factoring in today's 7.25% interest rates, $908 in monthly HOA fees, substantial property taxes, and insurance. That's a $3,000 monthly premium just for the privilege of saying "I own my home"—with no meaningful difference in living experience. This financial reality raises important questions about the true cost of homeownership in today's market. That extra $3,000 monthly represents significant opportunity cost—money that could fund memorable experiences, quality-of-life improvements, investments, or simply provide financial breathing room. When I run the numbers, even accounting for potential appreciation, the equation often doesn't favor buying right now, particularly for primary residences in certain markets. The disconnect between housing costs and financial reality has created what I see as a market arbitrage opportunity for renters. If someone like me—with substantial real estate experience and resources—finds current ownership costs prohibitive, how are individuals just starting their careers supposed to enter the housing market sustainably? Sometimes the financially savvy choice is patience—continuing to rent while building savings and waiting for market conditions to shift. Whether you're considering your first home purchase or reassessing your housing situation, I encourage you to run your own numbers carefully. Look beyond the emotional appeal of homeownership and examine what makes the most financial sense for your specific circumstances. Share your thoughts on the rent vs. buy equation in your market—I'd love to hear your perspective on this crucial financial decision.…
 
Send us a text Diving deep into the world of high-leverage real estate investing, this candid exploration of hard money lending reveals both its immense potential and serious pitfalls. Drawing from personal experience—including costly mistakes—I break down exactly how these loans work and when they make sense for investors at different stages. Hard money loans offer a unique advantage: lightning-fast closing capabilities that can help secure deeply discounted properties when sellers need to move quickly. With closings possible in days rather than months, investors can access deals others simply can't. However, this convenience comes at a significant cost—typically 4% funding fees and 14-15% interest rates on short-term loans ending with balloon payments. The true danger lies in what happens when that balloon payment comes due. Without proper planning, investors can find themselves trapped in cycles of loan extensions, each requiring additional funding fees while interest payments continue draining resources. I share a personal cautionary tale of extending a hard money loan three times on a property requiring unexpected basement repairs, resulting in thousands of dollars wasted. For experienced investors with solid plans, hard money can be transformative. The ideal scenarios include: securing significantly discounted properties through quick closings; implementing short-term renovation strategies with sufficient equity growth to refinance; or acquiring properties with cash flow strong enough to cover the high-interest payments. In each case, having a clear exit strategy before securing the loan is absolutely critical. New investors should approach high leverage with extreme caution. Without experience estimating renovation costs, managing tenant issues, or navigating refinancing processes, the margins for error become dangerously thin. Even small unexpected expenses can eliminate profit margins entirely. Begin conversations with conventional lenders before closing with hard money, and remember that refinancing typically requires at least 45 days. Whether you're considering your first investment property or looking to scale your portfolio, understanding when and how to use leverage appropriately can mean the difference between accelerating your wealth-building journey and derailing it completely. The power of hard money isn't in the quick access to capital—it's in knowing exactly how to use that capital with a well-defined plan for getting out.…
 
Send us a text Ever wonder how ordinary people create extraordinary wealth through real estate? The answer might be simpler than you think. Imagine purchasing a multi-unit property, living there at a fraction of market rent, and walking away with a six-figure profit – all without spending a dime from your savings. This isn't some get-rich-quick scheme; it's a legitimate strategy I used to generate $125,000 in profit while drastically reducing my living expenses. As both an airline pilot and part-time real estate investor, I discovered a powerful combination of tactics that allowed me to purchase a four-unit property using my VA loan (though FHA loans work similarly for non-veterans). The magic happened when I represented myself as my own agent, effectively getting paid over $10,000 at closing just to buy the property. With zero money down and no PMI, I moved into one unit while renting out the others. The numbers tell the story: while most people in my area were paying $2,000 monthly in rent, my effective housing cost dropped to just $400-500 per month because tenant income covered nearly all expenses. For almost three years, I benefited from tax advantages, equity building, and debt reduction – all while living comfortably at minimal cost. When it came time to sell, having lived there for the required period, I avoided capital gains tax and pocketed $115,000 in profit. Combined with my initial commission, the total benefit reached approximately $125,000 – from a property I never put a single dollar into purchasing. The beauty of this approach is its accessibility. You don't need specialized knowledge or expensive courses – just willingness to temporarily live differently than most. In today's economy with inflation outpacing wage growth, this strategy offers a practical solution to the housing affordability crisis facing many Americans. Ready to transform your financial future? Consider how house hacking a multi-unit property might be your first step toward building lasting wealth. Share your thoughts or questions in the comments – I'd love to hear about your real estate journey or help you start one.…
 
Send us a text Ever wondered why someone with 60 rental units would keep their day job? I'm breaking down exactly why I've chosen to maintain my career as a legacy airline pilot and military instructor while building my real estate portfolio. The foundation of successful real estate investing isn't about quitting your job—it's about leveraging it. My steady income provides the financial safety net critical for those early investments. When I bought my first duplex, knowing I could cover the mortgage even if both tenants stopped paying created tremendous peace of mind. This stability allows for conventional financing rather than risky 100% LTV products that often lead investors astray. Time management becomes your superpower when balancing multiple careers. I've learned to work efficiently during flights, leverage partnerships with friends who can check properties when I'm unavailable, and find service providers who align with my schedule. Getting my real estate license eliminated middlemen and finding responsive lenders who don't require constant attention freed up mental bandwidth. Most crucially, hiring excellent property managers transformed my business—they're not an expense but an investment as important as the properties themselves. The math matters. Looking at my portfolio today, the 8% I pay in property management fees pales in comparison to my pilot's salary. Simply put, quitting doesn't make financial sense yet. I've witnessed investors lose control of 100-unit portfolios through poor management, creating financial death spirals impossible to recover from. Success in real estate isn't about timing the market perfectly or overnight results—it comes through consistent, methodical action maintained day after day, year after year. What's your wealth-building strategy, and how are you balancing immediate desires with long-term success?…
 
Send us a text Wondering how successful real estate investors evaluate potential rental properties? In this transparent, no-nonsense breakdown, Cole—a part-time real estate investor balancing a career as both a commercial airline pilot and military instructor pilot—reveals his six-point property evaluation system built from years of hands-on experience. Cash flow reigns supreme in Cole's investment approach. Forget complex appreciation models or speculative metrics—he focuses exclusively on cash-on-cash return, aiming for approximately 25% when possible. This straightforward calculation (annual pre-tax cash flow divided by total cash invested) immediately reveals how hard your money is working for you. Unit configuration significantly impacts investment performance, with Cole strongly preferring two and three-bedroom units that attract stable, long-term tenants. Property condition assessment follows a practical hierarchy based on replacement costs, while property tax considerations—often overlooked by new investors—can dramatically affect long-term profitability. Cole shares a cautionary tale of selling a property primarily because its $6,000 annual tax burden consumed the majority of its cash flow potential. Beyond the numbers, Cole dives into neighborhood dynamics and tenant profiles, drawing from his unique perspective gained while working as a mail carrier throughout Milwaukee. He explains how AppFolio property management software standardizes his tenant screening process, helping avoid costly mistakes like the tenant who stopped paying for 16 months during COVID and ultimately removed the kitchen cabinets when leaving. Whether you're considering your first investment property or looking to refine your existing portfolio strategy, these practical criteria will help you evaluate opportunities through the eyes of an experienced investor. What's your most important criterion when evaluating rental properties?…
 
Send us a text Ever wondered why some real estate investors seem to scale their portfolios so quickly while others struggle for years to add a second property? The secret might be simpler than you think—strategic partnerships. Drawing from my experience as a part-time real estate investor juggling careers as both a legacy airline pilot and military instructor pilot, I've discovered that my biggest regret wasn't a bad purchase or missed opportunity—it was waiting too long to bring on partners. While I hesitated until my second deal, I now recognize that partnerships are the ultimate superpower for new investors looking to break into residential rental real estate in 2025 and beyond. My reluctance stemmed from a well-intentioned place. I was comfortable risking my own capital while learning the ropes, but the thought of potentially losing someone else's money created a mental barrier. This protective instinct actually limited my growth during critical market phases. When I finally partnered on an eight-unit acquisition where I was $30,000 short, that partner's $20,000 investment (earning them a 30% stake) eventually returned about $95,000 plus ongoing rental income. This experience fundamentally shifted my perspective. The right partnership brings more than just additional funding. Multiple borrowers with stable incomes strengthen loan applications, as lenders evaluate both the investors and the investment. However, partnership selection requires careful consideration. I recommend finding partners among those you already know—friends, family, colleagues—who share your investment timeline and philosophy. Someone looking for quick returns won't mesh well with my 10-30 year horizon. Formalize these relationships through proper legal structures like LLCs with comprehensive operating agreements that clearly define responsibilities, profit distributions, and exit strategies. Whether you're just starting out or looking to accelerate your existing portfolio, consider how the right partnership might help you overcome your current limitations. What's holding you back from reaching your real estate goals? The answer to that question might reveal exactly what you should be looking for in a potential partner.…
 
Send us a text Stepping closer to my goal of owning 100 rental units, today marks another milestone as I close on two new properties—bringing my portfolio to 60 units after some recent sales and acquisitions. These seemingly ordinary properties reveal extraordinary lessons about creative real estate financing and spotting long-term value in today's market. When conventional banks wouldn't touch a duplex with non-paying tenants and verbal leases, hard money lending became my solution. Yes, at 14% interest and a 4% funding fee, it's painfully expensive. But sometimes the best opportunities require unconventional financing strategies. I walk you through exactly how these closing costs break down, revealing how security deposits, tax prorations, and rent credits dramatically reduced my out-of-pocket expenses—allowing me to close one property with just $1,500 at the table. The $68,000 single-family home might be my most interesting purchase. At 750 square feet with some foundation issues, it's not perfect—but I see tremendous upside potential. These small homes aren't being built anymore, yet as interest rates and housing prices push buyers down market, they're becoming increasingly attractive. It's why I believe this modest investment could eventually be worth $120,000 or more. My six-month strategy involves stabilizing these properties and refinancing into conventional loans before the hard money balloon payments come due. I've learned this lesson the hard way, once refinancing a property three times and paying $15,000 just in funding fees. Whether you're just starting your real estate journey or looking to expand your portfolio, remember that sometimes you need to dive in with both feet rather than testing the waters. As I always say, nothing changes if nothing changes. What unconventional real estate strategies have worked for you? Share your experiences in the comments!…
 
Send us a text Ever wonder why housing prices keep climbing despite 7% interest rates and affordability at a 40-year low? You're not alone. The housing market continues to confound conventional wisdom, with properties selling well above asking price even as monthly mortgage payments have skyrocketed 90% since 2020. The mystery deepens when you consider that most people's wages haven't increased by even 5% during the same period. This fundamental disconnect between income and housing costs is reshaping the real estate landscape, particularly in previously affordable Midwestern markets like Milwaukee, where prices have jumped 7-20% year-over-year as buyers flee expensive coastal cities. At the heart of this contradiction lies a perfect storm of factors: critically low inventory (30-40% below pre-pandemic levels), virtually non-existent new construction of starter homes, and what I call "the machine" - the entire lending and real estate apparatus that benefits from ever-increasing prices. From banks earning more interest on larger loans to municipalities collecting higher property taxes, the system is structured to push prices upward. Many hopeful buyers compare today's market to 2008, anticipating a similar crash. However, the differences are striking: today's homeowners have substantial equity, lending standards remain tight, and there's no wave of foreclosures on the horizon. While some cooling may eventually occur, any price adjustments will likely happen gradually over years, not months or weeks. For investors and buyers alike, this reality demands strategic thinking. My approach focuses on affordable single-family homes and duplexes that represent entry points for many buyers - properties where demand should remain strong regardless of market fluctuations. For those waiting on the sidelines, consider that increasing your purchasing power might be more realistic than waiting for prices to dramatically fall. Whether you're invested in real estate or searching for your next home, understanding these market dynamics is crucial. What's happening in your local market? Share your experiences and let's continue this important conversation.…
 
Send us a text The dream of quitting your 9-to-5 to pursue real estate full-time tempts many new investors. But is rushing to leave your job actually sabotaging your long-term success? Drawing from a decade of experience balancing property investing with careers as both an airline pilot and military instructor, this candid discussion reveals why your day job might be your most valuable asset when building a sustainable real estate portfolio. Banks and lenders scrutinize your employment status closely when you're starting out. Without established W-2 income, securing loans becomes significantly more challenging, especially for new investors without extensive credit history. Your stable employment serves as security, demonstrating you can cover property expenses even during vacancies or unexpected costs. After establishing a track record of successful properties over several years, lenders may eventually consider your rental income sufficient, but patience is essential. The math rarely supports the "retire young" narrative popular on social media. Despite what influencers claim, the cash flow from 10-20 duplexes typically can't replace a solid professional salary, particularly after accounting for property management costs. The real wealth-building happens gradually through mortgage paydown, appreciation, and reinvestment of profits. By maintaining your day job while growing your portfolio, you can direct all rental income back into acquiring more properties rather than withdrawing it for living expenses – creating exponential growth that wouldn't be possible otherwise. Consider what truly matters before making drastic career changes. Are you quitting your job to impress strangers online, or are you making strategic decisions for long-term financial independence? The most successful investors understand that real estate involves inevitable mistakes and learning experiences. Your employment income provides the runway needed to recover from these missteps without derailing your entire financial future. Start small, determine if property ownership truly aligns with your goals, and gradually scale your portfolio while maintaining the security your career provides. Subscribe for more practical, hype-free real estate investing insights as we continue building this channel together!…
 
Send us a text Ever feel like you've done everything right in your career but still can't afford the home you want? You're not alone. As a commercial airline pilot, military instructor, and real estate investor, even I'm feeling the squeeze of today's housing market—so much that I'm currently renting an apartment while owning multiple rental properties. My response? A contrarian investment strategy focused on properties many investors overlook. I'm targeting homes in Milwaukee's $100,000 range (plus or minus $20,000) that offer immediate cash flow while positioned for substantial appreciation. These aren't Instagram-worthy properties, but they might be the smartest plays in today's market. The thesis behind this approach is what I call the "waterfall effect." As buyers get priced out at the top of the market due to inflation, interest rates (currently at 7.5%), and skyrocketing property taxes (mine increased 30% last year), they're forced to look at the next tier down. This creates a domino effect through every market segment, eventually driving up demand in previously overlooked neighborhoods. I've already seen this play out in Milwaukee's south side, where similar properties have experienced explosive growth. My recent purchases—a $68,000 single-family home and a $112,000 duplex—exemplify this strategy. While not exciting, these properties cash flow nicely while offering potential 50-100% appreciation as market pressures intensify. The kicker? You couldn't rebuild these homes for anywhere near their purchase price today, suggesting they're fundamentally undervalued. What makes this approach powerful is its built-in safety net. If my appreciation thesis proves wrong, I'm still generating positive cash flow and building equity through debt paydown. But if I'm right, these "boring" investments could deliver extraordinary returns as middle-class buyers increasingly find themselves with no other options. Are you seeing similar market pressures where you live? Join the conversation and share your experiences—I'd love to hear how you're adapting your investment strategy for 2025 and beyond.…
 
Loading …

Welcome to Player FM!

Player FM is scanning the web for high-quality podcasts for you to enjoy right now. It's the best podcast app and works on Android, iPhone, and the web. Signup to sync subscriptions across devices.

 

icon Daily Deals
icon Daily Deals
icon Daily Deals

Quick Reference Guide

Copyright 2025 | Privacy Policy | Terms of Service | | Copyright
Listen to this show while you explore
Play