Wouldn’t it be nice if you could figure out how to make $10k per month, all while averaging two hours of work each week? Our recent guest, Chad Carson, turned this dream into a reality with his unique approach to rental property investing.
Rest assured that his strategy has nothing to do with buying hundreds of properties or spending all your time answering maintenance requests. If you’re interested in achieving financial independence through a small but mighty real estate portfolio, then it’s time to take a page out of Chad, aka “Coach,” Carson’s winning playbook.
From Football to House Flipping
By 2003, Chad Carson had already made a name for himself as a former Clemson University linebacker. With his degree in hand and $1,000 in the bank, he hung up his helmet and set out to tackle the world of entrepreneurship.
But if you’re expecting an overnight success story, then Coach Carson will be the first to admit you’ve come to the wrong place. When he first started out in his early twenties, Chad’s story looked much like any other young college graduate’s.
“I basically worked to pay the bills and stay afloat financially,” he says, reflecting on the five or six years he spent flipping houses.
But after surviving the 2008 housing crisis, Chad ultimately decided to try out a different strategy. Rather than shooting for short-term payouts, he thought, why not transition into long-term income properties?
At this point, Chad Carson was introduced to the obstacles that had derailed plenty of potential rental property investors before him. But while he didn’t have the capital to invest in his own real estate empire, he didn’t let it stop him.
Instead of focusing on the challenges, Chad decided to invent new solutions that worked for his goals. Suffice to say, his persistence paid off.
Not only did he achieve financial freedom by his 30s, but he now helps other investors do the same on his weekly podcast, Real Estate Investing with Coach Carson. He also recently released a new book called The Small and Mighty Investor, which breaks down exactly how to make $10k per month through rental properties. Read on to get a sneak peek at some of Coach Carson’s best plays.
What Is a Small and Mighty Investor?
For many of us, real estate investing conjures up visions of investing in hundreds, or even thousands, of rental units. That’s where Coach Carson steps in and calls for a time-out.
“The way I define a small and mighty investor,” he explains, “Is sort of the opposite of what you normally hear online with real estate.”
When it comes to investing, Chad prefers the Occam’s Razor approach. As the time-tested principle points out, “the simplest solution is almost always the best.”
The way Coach Carson sees it, being a small and mighty investor is all about “having the least number of properties needed to financially accomplish your goals.”
Note that he says your goals. While some real estate moguls may prefer to pile up as many properties as they can get their hands on, Chad never had an interest in purchasing every unit in town.
It was more about putting together a collection of investments that would allow him to enjoy financial freedom and control of his own schedule. Today, he and his partner split ownership of just over 30 properties, which allows Chad to enjoy over $120k each year in passive income.
But now for the big question – how do you pull something like that off? Let’s take a closer look at some of Coach Carson’s best strategies for investors of every type.
Play 1: The Long Game
As you may have guessed from the telltale name, this strategy is a bit of a long game. That said, so are plenty of other investment vehicles that offer far less control!
The good news is that, if executed properly, this play offers a solid path to building your own retirement plan through rental property investing. Here’s a hypothetical play by play of how to make $10k per month from a small rental property portfolio:
- Start by purchasing a single property and rent it out for $1,800 per month.
- Put aside money each month to cover expenses, such as taxes, insurance, and maintenance costs, and a property manager. (We’ll say all these expenses equal $800)
- Use the extra $1,000 profit each month to pay off the property’s mortgage.
- Use the same process to acquire and make payments on a new property each year for 10 years.
It’ll take some time and persistence, but ultimately the glorious day will come when all your mortgages are paid off. In the end, you’ll end up with ten properties that each generate a $1,000 profit each month, which equals $10k per month.
And that’s assuming that you never adjusted your rental costs to keep up with inflation! Hint: You undoubtedly will.
Play 2: House Hacking
Chad also suggests “house hacking,” a strategy he used himself to break into the real estate game. The house hack comes down to a simple process:
- Purchase a four-unit building
- Move into one of the units
- Rent out the other three
- Use the rental income to pay off the property’s mortgage.
This strategy comes with the major benefit of owner-occupant financing. Under these terms, you may be able to get financing for as low as 3 – 5% down. If you’re a veteran, you may even qualify for a 0% down payment VA loan!
As Coach Carson points out, “All these owner-occupant financing programs are out there with lower down payments – with really good interest rates compared to a typical investment loan, which would be like 20% down or 25% down.”
Don’t be afraid to take advantage of them!
Play 3: Partner Up
Not into the idea of living in your own property? Fair enough. Let’s take a look at another play Coach Carson has used throughout his real estate investing journey.
It all begins by identifying your assets. As Coach Carson explains, in the real estate game, there are usually two major strengths: “You either have the money or you have the time.”
Imagine, for instance, that you’ve got plenty of time on your hands and would love to use it to invest in your first rental property. There’s only one pesky problem – you simply don’t have the capital or credit score to cover a down payment.
That’s where the magic of a solid partnership can come in. Coach Carson recommends the following strategy:
- Seek out and negotiate a great deal on a property.
- Find a partner who has plenty of capital but no time for the day-to-day hassles of property ownership.
- Offer to take care of all said hassles if the partner will either cover the down payment or use their credit to get a loan.
- Split the cash flow, expenses, and profits when the value goes up.
While this may sound like wishful thinking, Coach Carson advises never underestimating the value of being a reliable person who is willing to put in the hard work. While plenty of people have money, few have the time to put into the daily grind of buying and managing a rental property.
Maybe you can even relate to this dilemma yourself? If so, then this strategy is equally valuable for you. If you’re looking for a hands-off approach to investing in rental properties, then the key lies in making solid connections.
As Coach Carson reveals, the real estate business is often more about people than properties. So how do you find dependable partners that you can trust?
It largely comes down to networking. Coach Carson recommends making connections at events like:
- Real estate meetups on Meetup.com
- Facebook Groups
- Bigger Pockets
Make sure you head into networking events with two things: a pitch that summarizes your goals and a great deal of patience.
“Just don’t be in a hurry,” Coach Carson emphasizes. “It’s kind of like a marriage. You want to get to know each other and make sure it’s the right fit.”
Taking the time to find the right partner and develop trust can lead to a working relationship that lasts for years to come.
Keep Your Eye on the Prize
These days, Coach Carson enjoys a thriving rental property investment portfolio that requires about 2 hours of work each week. But he’s also quick to point out that it didn’t start that way.
He advises approaching rental property investing like a venture capital startup. While it may require a lot of time and effort in the beginning, the pay-off can ultimately pave the way to financial freedom.
Want to get the complete guide to rental property investing from Chad Carson himself? Be sure to check out his book The Small and Mighty Investor and tune in to his Real Estate Investing podcast each week for more great tips!
What do you think of the advice from Chad Carson? What is your plan when it comes to how to make $10,000 per month from rental properties?
Please let us know in the comments below.
Leave a Reply