How To Replace Your Income With 12 Rental Properties (Part 1 of 9)

After coaching so many people through the process of buying cashflow properties and replacing their income…

I’ve arrived at a “framework” that I have my clients follow.

This 9 step process is the most logical and effective way to build your portfolio.

In today’s email, I’m going to cover Step #1 - Pick Your Market

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Some of you may think you don’t NEED this step. You may already be familiar with (or even live in) a market that is great for rental properties. 

Still, it’s critical that you test your assumptions against the data. 

Make sure the market you invest in meets the criteria below. 

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Criteria #1: Rent/Price Ratio - Ever heard of the 1% rule? It’s where one month’s rent = 1% of the all-in price (purchase + rehab).

Example: $900/month in rent, $90,000 all in price. $900/$90,000= .01 (1%)

You need to do better than that. I like buying houses in the 1.3 to 1.6 range. 

There’s more cashflow at the end of each month.

So make sure that ratio is healthy.

Criteria #2: Strong Economy - Your market should have multiple “sectors” that support it, and NOT be just a “one-horse town”. 

So, a university, mining, tech, a handful of big companies in the area, an airport, etc.

This assures that, if one of those things were to go away, the whole economy would not collapse. It would be supported by the other sectors.

This keeps your properties in demand. Jobs = tenants. 

Criteria #3: Population Size/Growth - You need an area that has a population size of at least 100K or more.

It should also be GROWING, not dying. Never invest somewhere that the population is declining. 

Criteria #4: Job Growth/Income Growth - Are the amount of jobs in your market growing? Is the average income growing? 

These are two indicators of a strong economy. Analyze them before you make a decision. 

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Those are the big ones. You can over analyze this like crazy if you wish, but if a market meets the above criteria, it’s probably safe to invest there and you will do well. 


If you are interested in learning the top 10 markets I have chosen for cashflow in 2018/2019, you can find that in my “2018-2019 Best Markets Report”...

Which can only be accessed through our 12 House Masterclass.

The Masterclass has not only the report, but also:

  • A comprehensive 50+ video training course on how to get your first 12 houses
  • Monthly group coaching calls with me
  • Access to our private, closed Facebook Group where you can ask questions to your heart’s delight
  • Access to my private money lenders
  • Coaching Call Recordings
  • A “Freedom Artist” T-Shirt
  • And much, much more!

LEARN MORE ABOUT THE 12 HOUSE MASTERCLASS HERE

In my next email, I’m going to cover the basics on Step #2 to getting your first 12 houses, which is…

Build Your Team!

Look for that email.

Talk soon!

Brian
 

Brian EllwoodComment