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NEWSFLASH: Rental properties can’t make you rich!

FACT: Real estate is a usually a net worth play

What’s that mean? It means that most properties are not able to provide you any cash income. Most of your real estate investments will make you money on paper, but you have to wait years to pull out any cash.

Real estate can make you rich someday. But if you want to fund your current lifestyle then you have to get cash income from your investments. That’s where I come in.

Don’t listen to the gurus.

Rental properties simply don’t generate cash income. Why? Because single family homes and small multifamilies cannot be bought for cheap enough to generate any cash income after you pay for debt service, repairs, management, taxes, and insurance. That is the fact of the matter.

I’ve owned dozens of rentals and the only way I’ve found to make a solid cash income from rental property is to operate rooming houses.

To make a solid monthly cash income, there are really only two useful technique. One useful technique is to purchase inner city properties and rent them out Section 8. That’s what Michael McLean and Nick Cipriano do, and they wrote a great book about it called The Section 8 Bible (which I reviewed here).

One problem with the Section 8 strategy is you have to buy inner city properties. Those are the only ones you can get cheap enough. The other problem with the Section 8 strategy is that you have to manage all your properties.

Fact: Managing properties is not how you make money.

And this is a very unpleasant fact about real estate investing. When you buy a rental house, you have to manage it. I used to manage 20 rentals. Those 20 rentals only made me a few bucks a month in cash income.

How can you get a solid cash income from your rental properties?

Well, if you won’t do Section 8 houses in the inner city, how can you use rental properties to get the financial freedom all the gurus are talking about? What I do is buy houses and rent them out by the room. S.R.O. stands for single room occupancy. Some people call my properties boarding houses, and others call them rooming houses. Doesn’t matter what you call them. I make a lot of money on my SRO houses. And I’m not talking about the kind of money you have to wait 30 years to cash in on. No, I make my money in cash, every month, and I use it to fund my lifestyle. On average, I make $1,500 free cash flow every month from EACH of my duplexes. That’s right. I’m talking about duplexes here. And no, they’re not paid off. I carry 70%-80% debt on each of my properties.

I guess you’re probably thinking that I’m a total genius for being able to make $1,500 on a duplex. Well, I’m not. I’m a regular guy that used to get by working as a debt collector, landlording in my spare time. I started buying rentals because some idiot told me I could quit my job that way and live the dream. Pretty soon I had lots of properties and no money! Apparently they forgot to mention that you only make money on rentals if you buy huge apartment complexes.

My dad suggested that I might make more cash flow by renting out by the room. I had just bought a new duplex, so I figured why not? I priced three bedrooms at $300 each. I stuck an ad in the paper, and in a week the house was totally full. Whoa! When I bought the house I expected to make about $1,200 total on that property. Here I was making $1,800.

Over time, I created a system for management and renovations. I developed a system for testing rent prices, and realized my rents were way too low. Now I get $355 per month per room. I added some rooms, and that property now grosses $3,550 per month! One lucky idea at the right time, and I took a $1,200 property and made it into a $3,550 property.

My SRO house was so successful that I bought another duplex and turned it into another SRO house. And I kept going just like that. Now I only work 6 hours per week. I’ve completely automated my business!

When I first started investing in SRO houses, I made a LOT of mistakes. I probably could have saved myself at least $100,000 and tons of headaches if I had a book like The SRO System when I started. To my knowledge, The SRO System is the ONLY book that tackles the topic of SRO investing.

The SRO System will show you how I operate my business. But more than that, it will show you how I think so that you can make the the most profitable business decisions every time.

I know that there are a lot of scammy real estate investment products on the market. So let me assure you of a few things. First, I don’t offer mentoring, and I don’t sell “boot camps”. I sell two things: my book and forms on CD (they’re all in the book, but I sell them in editable MS Word format). That’s it. I’m not going to call you on the phone and ask you to buy a $500 book later on. That’s not the way I do things. This isn’t some fly-by-night Utah boiler room full of coke addicts we’re talking about here. You aren’t calling some cheesy 1-800 number in the middle of the night off of some lame infomercial. The SRO System is for people that are serious about making money in real estate and living the life they want right now.

Advantages of S.R.O
  1. You get more rents per property.
  2. You have no competition to force rents down.
  3. Affordable housing is always in high demand.
  4. You have less risk because there are more tenants per property to carry the mortgage payments.
  5. Best of all, boarding houses, like any other business, can be systematized so the owner (YOU) don’t have to work there!
The SRO System will teach you everything you need to know to invest in a boarding house. It is a complete how to guide for buying, renovating, and operating boarding houses.
You will learn:
  • How to invest in boarding houses.
  • How to find boarding houses to buy.
  • How to make $1,500 or more per property investing in boarding houses.
  • How to set goals for your financial future.
  • The total boarding house system for minimizing management time.
  • Which properties to buy and which ones to avoid.
  • How to get 5 rents out of a 3 bedroom property.
  • How to minimize repairs to common space with simple techniques.
  • How to get the tenants to manage the property for you.
  • How to handle tenant disputes.
  • How to control utility costs.
  • How to deal with the city government.
  • How to get rid of problem tenants.
  • How to get started right away.

The SRO System is 209 pages full of information. Check out these chapters:

Chapters

  1. Living the Life YOU Want
  2. How to Think Like an Investor
  3. Setting Up the Office
  4. Finding & Hiring Helpers
  5. Preliminary Research
  6. Finding Properties to Buy
  7. Negotiating
  8. Financing
  9. Closing
  10. Contractors & Handymen
  11. Renovations
  12. Maximizing Income
  13. Minimizing Utility Expenses
  14. Finding & Using Managers
  15. Finding & Keeping Tenants
  16. The Lease
  17. Day-to-Day Operations
  18. Supply Management
  19. Non-Utility Expenses
  20. Neighbor Relations
  21. Recommended Products
  22. Resources
  23. Forms, Signs, Notices
I’m so confident that you’ll like my book, I offer a 100% money back guarantee. In fact, you can KEEP THE BOOK and I’ll STILL refund your money. NO JOKE. Like I said before, I’m no lame nate-night TV huckster. I’m a regular guy that happened upon a great way to make some dough. If The SRO System isn’t up to your standards for good information, I’ll give you your money back. All I ask is that you tell me what you didn’t like so I can make improvements in the future.

Still skeptical? Read the first two chapters for free.

Still skeptical? Read some of my FREE articles.

Seriously. I know real estate investing. My system works!