$4k/month in rental income in ~ 1 year while doing a full-time job. Decisions that helped me!

Intro

Since my last post here,

A ton of people reached out to get more background and clarity on my quick journey to $4k/month in cash flow income in ~ 1 year while doing a full-time job.

I wanted to cross-post on Medium and share some insights that I think have helped me.

TLDR -

Took risks early on,

Had extreme discipline,

Sacrificed socially,

Learned by doing and iterating,

Focused on the acquisition rather than costs

Focused on automation when I saw repetitive stuff

Learned and applied coding and strategy frameworks

If you like structure rather than the blob of text below, then see my journey break down in this interview on Q and A format.

Full rundown

Out of college, I started working at a startup that grew really fast from 30 employees to 5000 in the 6 years I was there.

Was very close with the owners and I could have lived a happy and easy life forever.

But I was stagnant!

More than money, I have always wanted the freedom to do my own thing. I have a million interests I want to pursue

Long story short, I quit a $200k/year job to start a genomics start-up in healthcare. Joined a startup accelerator and learned a lot from the mentors(VCs and CEOs) especially the power of selling the solution before building it.

6 months later my co-founder who was the tech guy decided to quit on me.

Back to ground zero and here comes the flood of regret of leaving my job + other all accompanying negative emotions of fear, self-doubt, etc

This was 2015 and I felt the lowest of lows!

This is when my life started pivoting. I got into morning routines, spirituality, discipline, which set the foundation of what was to unfold the next few years.

This also gave me the courage to decide I am not going to give up and started looking at the long game!

Key insight: Made positive life changes and set a discipline.

Now, I could go back to the corporate or keep trying! I knew the power of coding and technology and I felt backward that I couldn’t pursue my side project ideas due to the lack of my knowledge.

So I joined a coding Bootcamp and started working on a travel app for detail-oriented travel planners.

I hustled out for a year and a half and learned a lot in the full stack + more.

Made terrible decisions along the way and also forgot about the lessons from the mentors at Techstars to validate and sell your idea before building it.

The arrogance to think I knew more than the users about their needs led me astray.

I folded finally because I failed in execution. I wanted to build everything for the launch but failed flat.

I learned the importance of feedback loops and building with the users with super fast releases.

Key insight: I learned that just doing it beats perfection.

At this point, my money had run out so I had to join the corporate world again and man, did I hate it!

A year into my new job, A top management consulting firm reached out and I decided to give it a shot because I lacked the business and strategy knowledge and I could learn a lot!

After 13 or 14 grueling rounds, I got in. Immediately realized I was different in my attitude around problem-solving and solution-finding. I used the scrappy and lean approaches from the startup and indie hacking days and mixed them with big strategic thinking from the management consulting world to deliver successful outcomes.

Also started forming my own frameworks around critical thinking and problem-solving to move really fast with my decisions.

Key insight: Optimized my decisions in my early career for learning. There was tremendous value in combining insights from different domains.

Meanwhile, met a friend who left his software engineering job and was flying planes, climbing mountains, spending time with the family, and whatnot with a lot of free time on his hands.

And he made his money through real estate investing on the side in around 5 or 6 years.

I got intrigued and the hunger for financial freedom started to rise again.

After a year of research, I found the RE space to be somewhat tech dry and slow and realized there was an opportunity for me to use my coding skills to gain a competitive advantage.

Also, one major insight for me was that unlike startups or some other side projects, the gratification wasn’t delayed. It was instant — What you put in is what you get out especially in terms of financial rewards and that mailbox money is instant motivation to keep going.

Not to mention the power of leverage and equity build-up from the principal paydown.

I had saved up from years of corporate gigs and had about $150k so I decided to jump in!

I looked at the census data and some other data sets and created a data product using Jupyter notebook and python for myself to find submarkets with growth potential. (Here is the playbook explaining the excel version of it)

Then I used my management consulting experience to define a strategy using business frameworks like 5C’s, SWOT, Porter’s forces, etc, and also created a risk mitigation framework.

Using the frameworks listed above, I concluded that I needed to work with partners to split responsibilities and diversify risk while I learned the same amount as if I was doing it on my own.

I was fearful of going in with my capital and I didn’t have time. (Here is a framework for that strategy)

I made sure I used processes to divide responsibilities so everyone is pulling their weight.

Key insight: Used working partners to reduce risk and move fast

After I found the market, I started looking for specific properties that fit my strategy and goals and capital in hand.

I was spending hours every week analyzing different properties and there was not a single tool I could find that would optimize my workflow so again I used my hacking skills to create a chrome extension, which would scrape the data from the listing and tell me the return on the spot based on pre-defined calculations while I am checking out the listing.

(Here is a preview of the chrome extension)

That unlocked efficiency by 80%. I was spending 10 hrs a week on analysis and with the extension, it was only 2 hrs a week.

Also helped me move really quickly on my offers which sellers loved.

In Dec 2019 I bought a duplex with those tools in place, then bought 20 more units in 2020, while the market was really hard and good deals were almost impossible to come by.

Along the way, I used more coding and integration tools to automate my workflows to spend less and less time in finding deals and turning them over.

Key insight: Spent time in automating repetitive tasks by using project management tools

In March of 2021, I started realizing the management of the units and tenants was sucking a lot of my time especially the leasing of the units.

It would take weeks in coordination with prospects and being physically present for every showing.

Products on the market were not solving this unmet need and I had 22 units to manage at this point.

Decided to problem-solve again and use technology and ended up building a self-showing system where I didn’t have to be present for the showings.

System involved using Zapier + Google Sheets + Google Forms + Typeform + Calendly integration + smart lockbox APIs

Now my vacancies get filled in just a few days.

I also focused on building a team offshore that can do manual work that cannot be automated like checking driver licenses, coordinating with contractors for any repairs.

As a result, I spend 0 hours on PM stuff. My partner oversees operations and he too only spends like 5 hours overseeing PM.

Outro

I have reached this inflection point on the S curve where I can accelerate exponentially from here on using my current systems to fill more gaps in the traditional mom/pop industry and, maybe just blow them out to be real products.

Though, I don’t know if I want to frankly even grow beyond a certain point. If I am making enough for my survival needs plus extra cushion then I just want to be able to have the freedom of time more than anything to be able to give back to the world.

One big realization for me was that if I don’t have to have all the time and money to be able to give back at scale, which is my ultimate goal in life.

So nowadays I only take mission-driven projects at my W2 and started sharing my playbooks online to help folks who might have similar goals as me accrue passive income quickly.

I have folks who work in the building I live in and are not as lucky as I have been but have the full mindset to go for their dreams. I am teaching them and the hope and happiness they show is all the gratification for me.

It might even be presumptuous of me to think that there are others in the same boat and this might all sound like a cliched story of not giving up when the times were rough but hope it’s educational and motivational especially for the folks who feel they are in the flux like I was!

Happy investing! :)