I Own 150 Rentals. Here's How Much I Make. (Real Numbers)

TLDR

A 16-property portfolio brought in 250,000 in rent and cash-flowed about 7,000 after everything. The source says the business model is long-term equity, not that year’s cash flow. Tenants pay down the loans while the holdings grow over 30 years.

Table of Contents

• The Full P&L on a 16-Unit Portfolio.
• Why the Cash Flow Number Looks Terrible.
• The Self-Management Comparison.
• Why You Still Buy at Break-Even.
• The Equity Game.
• Cash-Out Refinance: Grocery Money.
• How You Get to 150.
• FAQ.

The Full P&L on a 16-Unit Portfolio

Across all 150 units, Ross showed about $1.5 million of net operating income before debt. That total also covered different partnerships, syndications, and funds. He then zoomed into a cleaner example: 16 single-family homes, mostly B-class and C-class. Most of their first-year repair load was behind them.

Full year numbers:

That is roughly 76 percent of gross rent flowing through as operating income, with about 15 percent of gross rent going to taxes and insurance.

The roughly $60,000 of operating expenses was not one generic repair line. The source lists inspections, pest control, landscaping, and routine repairs. It also includes roofs and other capex work, supplies, and emergency items such as space heaters or a hotel. Other costs include management, leasing, collections, legal work, evictions, vacancy utilities, cleaning, and lawn care.

About $25,000, or 10 percent of gross rent, went to repairs, maintenance, and capex. Ross said routine maintenance was usually 7 to 8 percent in his numbers. He treated roofs, HVAC systems, and water heaters as separate big-ticket work.

Ross’s quick underwriting rule keeps about 60 percent of rent after operating costs, taxes, and insurance. The mortgage is paid after that. It is his baseline from past results, not a known result for every property.

Why the Cash Flow Number Looks Terrible

Yes, 7,000 dollars in cash flow on 16 houses is nothing. Then you still have business overhead. QuickBooks subscriptions. Bookkeeping help. CPA fees. Office expenses. Take all that out and you are making 5,000 bucks.

You are probably wondering why the hell I would bother.

Here is why. Current cash flow is only one part of the model. Ross also looks at what may happen over a 30-year loan.

The Self-Management Comparison

Ross also modeled the 16 homes without an outside property management company. His estimate removed the management fee and used lower costs. That produced about $54,000 in annual cash flow instead of roughly $7,000. Both figures were before general business overhead.

That was a hypothetical comparison, not a claim that self-management ensures lower vacancy or repair costs. An owner and a property manager both must follow fair-housing and screening rules. Set lawful written criteria. Apply them the same way each time. Ross’s comments about tenant selection do not create an exception.

Why You Still Buy at Break-Even

Here is the core thesis. If I can underwrite a property conservatively and it shows zero cash flow or slightly positive today, I will buy it. Never negative. Negative is stealing from everything else in your business.

The reason is simple. The source uses 3 to 5 percent as a past annual rent-growth range. Principal and interest on a fixed 30-year loan do not move. Taxes, insurance, repairs, and management can rise. The rent-growth figure is an example, not a promise for a property or market.

In Ross’s projection, the gap between rent and the fixed principal-and-interest payment widens. Year 1 might be 5,000 dollars on the whole portfolio; by year 30, the scheduled mortgage ends and rent has roughly doubled. Actual operating costs and rent may move differently.

Ross’s model accepts zero or slightly positive cash flow today because the fixed mortgage ends after 30 years while rent may grow. He rejects a negatively underwritten deal.

The Equity Game

But cash flow is not even the biggest piece. You don’t buy single family homes for the income. You buy them for the equity. You just make sure the income makes sense.

Here is what one property actually looked like for me.

Ross bought with a hard-money lender. He then renovated, rented, and refinanced at $210,000. The first two cost lines total $184,000. He added carrying and other costs to reach an all-in figure of about $210,000.

Now stretch that out. Real estate has appreciated around 4.2 percent per year on average over the last 30 years. Project that on the 300,000 dollar house.

The recording’s calculator displayed about $373,000 after Ross changed the input to 3 percent. That output did not match the math. The corrected 30-year result is about $728,000. This is before selling costs. Appreciation is not promised.

In the 4.2 percent example, the house grows to about $1 million. The loan also ends after 30 years of scheduled payments. Ross projects higher rent too, but future rent is not known.

Key Concept

Ross’s model stacks two forces. The value may rise while the loan balance falls. The gap is equity, but it does not grow by a fixed amount each year.

Scaled Up

At the time of the recording, the 16 homes were worth about $3.8 million. Ross estimated roughly 53 percent equity. He did not state an exact loan balance in the narration.

Project it out at 3 percent appreciation: about 10 million. At 4.2 percent: about 13 million. Under the example’s appreciation assumptions and scheduled payments, there is no mortgage at the end.

That long-term equity is the product Ross is modeling.

Cash-Out Refinance: Grocery Money

You may be able to access part of the gap through a cash-out refinance. The loan must qualify, and the new debt must still work.

Say a 300,000 dollar property grows to 350,000 over a few years, and the mortgage paid down to 185,000.

• Equity before a new loan: 165,000.
• New refinance at 80 percent LTV: 280,000.
• Payoff of the old mortgage: 185,000.
• Cash made available in the example: 95,000.

The new lender would first pay the prior $185,000 balance. About $95,000 would then be available to the borrower. Real loan proceeds are generally debt rather than income because the borrower must repay them. That does not make every part of the deal tax-free. Interest, use of the cash, entity facts, and later debt cancellation can matter. Review the actual loan with a tax professional. IRS Publication 525 explains taxable and nontaxable income, including canceled debt.

The new payment can rise. Ross’s rule is not to take the new loan unless the current rent supports it, but rent growth does not guarantee that a future refinance will qualify or cash flow.

Pro Tip

Ross calls a cash-out refinance “grocery money” because it accesses equity without a sale. It also creates a larger debt. Check the payment, costs, term, and equity left before spending the cash.

The example asks for 80 percent LTV. Ross said programs he knew would often cap cash-out near 70 to 75 percent. That was a recording-era view, not a current loan quote. Use the lender’s real limit and terms.

How You Get to 150

I started with onesies and twosies. Then I started buying portfolios of 10 at a time. Later, the skills I built drew partners with capital. Other partners knew how to raise capital. That is how the portfolio reached 150 units.

Knowledge times experience equals skills. Skills are your tickets to the game. Once you have them, money comes looking for you.

FAQ

Is self-managing really worth it for a small portfolio?

The source compared Ross’s managed numbers with a hypothetical self-managed version. It did not set a one-, two-, or ten-property threshold. Tenant screening still has to follow applicable requirements.

What’s a realistic cash-flow target for year one on a new rental?

Ross said he would consider a conservatively underwritten property at break-even or slightly positive cash flow, never negative. That was his thesis in the source, not a universal instruction that every break-even property is a buy.

Can anyone actually refinance with hard money into a 30-year mortgage like that?

Ross described one property bought with hard money. He repaired it and rented it for about $2,300. He then refinanced at 70 percent LTV into a 30-year loan at roughly 6.5 percent at that time. The home still had to appraise and support its payment after all costs. This example does not establish a current loan program or approval.

What appreciation rate should I use when I project a property forward?

Ross showed projections at 3% and 4.2%. The source called 4.2% a historical average, but those rates were illustrations rather than a required underwriting assumption.

Just starting out. Should I flip first or buy rentals first?

This source explains why Ross values long-term holds despite thin current cash flow. It does not prescribe a beginner’s flip-versus-rental sequence.