How to Replace an AVERAGE Salary ($65,000) with Rentals

The average salary in the United States is around $65,000. That means there are millions of Americans who are working for the man, punching in and out and depending on someone else for financial security when they could be living off of a cash flowing rental portfolio instead. If you do it right, real estate investing can give you the freedom, flexibility, and yes, the actual income you need to create the lifestyle you want. So fewer hours behind a desk, no more missed soccer games and the ability to finally take that dream vacation. But look, this doesn't happen overnight or by accident. The decisions you make today determine where you'll end up five, 10, 20 years from now, which is why you need to be intentional about buying rental properties that can gradually replace your income. Today we're showing you how to do just that with a clear proven formula that will give you more than enough cashflow to live on. Follow these simple steps and you can have the option to leave your W-2 job in a decade or less. This is the real estate rookie podcast. I'm Ashley Kerr. And I'm Tony J. Robinson. And with that, let's get into the plan. So I think first Ash, let's just start with a little bit of our own quick backstory, right? And like how we used real estate to get to the point where we are. Um, I'll jump in first, but a lot of you guys know my story. I was a high income earning a W-2 employee working for Tesla. Um, 2020 lost my job. Um, and we had a small portfolio at that time. We had a few, I think four long-term rentals. Two of them were still being renovated. We had a two active short-term rentals. Um, and my wife and I said, Hey, instead of going back to work, what if we try and build our real estate portfolio instead? And in the 12 months after losing my job, we went from three short-term rentals to 15. We scale up to over 30 at our peak. Uh, and now today we've got 26 active short-term rentals in a small 13 room motel as well that we run, but it was really that 12 month period of just like grinding where the portfolio grew exponentially. Uh, that kind of gave us the runway that we needed to go into real estate full time. So that was me. Uh, that was the process. Yeah. Mine was a lot longer period of time. Mine was, but first I, I started as an accountant. I could not stand it sitting at a desk. So I knew I couldn't do desk work. So I quit after six months after I went through all of my schooling and I found a job as a property manager. And so that was kind of my insight into real estate. And from learning and watching this investor, I realized what real estate could do for you. So, um, after working for him for a little less than a year, I bought my first property. And slowly from there, I built a long-term buy and hold rental portfolio. And so I didn't quit my W2 job until 2019. Um, and I gave all my properties to a property management company and I, the properties I'd been managing, they all went to the property management company too. And so, yeah, that was kind of my first experience without a W2 is when COVID hit. Uh, so there was definitely a benefit to have the property management company in place because they took care of a lot of the things that came along with COVID and being a landlord and tenants and things like that. But yeah, so from 2013 to 2019, like it was December, 2019, I still had a W2 job working as a property manager and kind of an assistant to this investor. So different paths, right. But we both kind of ended up in the same situation where we ended up doing this full time. Um, let's talk a little bit about replacing the average salary. Now, again, obviously different parts of the country. This is going to be wildly different in some parts of the country. This is a great income other parts of the country. You might, you know, you might be struggling to make ends meet, but the average salary is $66,000. And the median salary is $61,000 about $62,000. We're just going to round to 65,000 or roughly $5,500 per month. That's the number that we're going to use for the context of today's conversation. And the goal is how can we reverse engineer $5,500 per month using rental income? Right. So just like some quick example, 5,500 bucks per month in cashflow, that could be 11 properties at 500 bucks per month in cashflow. And if you're doing one property per year, that's 11 years. If you're doing two properties per year, it's five and a half years, right. Which is way faster than retiring to, you know, retiring at 65 or you could just have one killer property. That's like a short-term rental or like a self storage facility or, you know, a sober living home that's doing 5,500 bucks per month. Right. So there's a lot of different ways to skin the cat, but 65,000 per year is not what we're going to be working towards. Now, obviously the cashflow depends on several factors like your market, your strategy, how much you're putting down. Like you could go ahead and hit that 5,500 per month cashflow. If you buy million dollar property in cash and rent it out, you could have that cashflow because you don't have a mortgage payment. So make sure when you're comparing yourself to others and looking at how they've gained financial freedom through rental properties, you understand the exact factors that went into them actually doing that. For me, it took me a really long time because I was literally buying properties with none of my own money. I used a partner, used their capital. I borrowed a line of credit. I'd buy properties with the line of credit. And then I would, you know, refinance them and pay the line of credit off. But that was very little cashflow because I was basically, you know, doing a full burr on the property where I'd go and refinance, pay myself back. And I wasn't putting money to sit into the property. So my cashflow was a lot smaller, like 200 to $300 per property to kind of get my start. So I had to get to those 18 properties before I actually could cover my expenses. Let me ask, like you, you talk about this often, right? Because you know, like I remember when I first started on the podcast, so this is what almost six years ago now. And like our, one of our first episodes together, like, Oh yeah, I bought a house for like $25,000. Knowing what you know now, would you have still started that way? No. So I definitely wouldn't have bought those dumpy duplexes as I like to call them. I was just in acquisition mode and I was buying these properties that were fine. They were, they were rented out. Some of them when I bought them, it wasn't like they were in, you know, complete disrepair. But what I did find is they had zero appreciation because they weren't in great areas. There was a long-term problems. To actually fix some of these long-term problems, like for example, you know, redoing all of the electric in the property that would have cost a lot of money. And because of the market, it wasn't a great market that I wouldn't have been able to increase rents enough to actually cover the cost of the rehab or make the rehab worth it. Because in some of those smaller markets I was investing in, there was a cap as to what people paid. Even if you put granite countertops in, even if it was the nicest unit in the whole town, people just couldn't afford to actually pay more. So it wasn't worth it for me to go in and do these extensive rehabs because I couldn't even get the rent, you know, back that I would need to actually make the deal worth it. So I've actually sold off a lot of those. I think I have three left. One I'm trying to sell right now. And then two, I'll probably keep for a while. They're not that bad. And, but yeah, I definitely want to do that. What I would do to start again is actually be more diligent and buy less houses, but buy better quality houses. So if that meant I, you know, if I had my line of credit and instead of buying five, $20,000 duplexes, you know, I would have just used that money to buy one property, um, instead. So yes, I would do that differently going forward. And plus now I think it's definitely harder to find $20,000 duplexes too that are actually rentable and like good condition. Cause that was back when I bought the like five of the $20,000 ones that was like in 2017. So very different times. And I asked that question knowing, knowing the answer, right? Because I think it's important for Ricky's to also understand that how you start isn't necessarily how you're always going to invest. And as you do more deals, you, you start to get a better sense of what is it that I actually do like to do? And what do I, what do I want to do more of? And what do I never want to do again? And what lessons have I learned? But sometimes it's, it's, it's, it's just more important sometimes to get started, even if it's not necessarily under the right circumstances, because deal number one is what helps you get into deal number two and beyond. But let's keep moving though with this example. Um, so I think the first thing Ash that the folks have to focus on is once they've identified this goal, right? Like, Hey, I want to get to 5,500 bucks per month. We need to focus on picking a market. I think a big mistake that I see a lot of new investors make is that they, they start with this like shotgun approach where they're just trying to like look at deals all across the country. They're in the Northeast, the Southwest, the Midwest, you know, the Pacific Northwest, Southeast in between. Right. And they're like analyzing deals in all these different places. But I think you can do, you'll be able to analyze deals more quickly and with more confidence. If you first narrow down and you become an expert in a small subset of markets. And for me, the sweet spot is usually like three ish markets. Like if you can have three markets where you're really, really dialed in on that usually gives you enough, um, kind of breadth of options, but without getting too wide that you're diluting, uh, diluting kind of your, your, your, your knowledge of those markets. So for me, I'd say narrow that list down like three to five markets first before you do anything else. And then here are some things that you want to look at when you're analyzing the markets is what is going to be your main driver here is your goal out of this. Is it going to be cashflow? Is it going to be appreciation? Is it going to be a mix of these? And here's some things you need to think about when you're considering what your end goal of this property is. So like you're a pure cashflow play is like, you want to replace your W2 income as soon as possible. Um, so you're going to look at, you know, properties that have a solid rent to price ratio. You're going to want to buy an affordable in an affordable market where you're going to get a great rent price and also a great price for the purchase of the property. And then something else to watch when you're comparing markets is insurance costs because your insurance will be baked into your mortgage payment. You want to keep your expenses as low as possible. Like if you're looking into coastal markets, you might get hit with flood insurance, um, which is going to drive your monthly expenses up. So that's going to definitely decrease your cashflow. Then we can look at appreciation. So this is what I learned as to like, I like markets now that have better appreciation, even if the cashflow isn't as great. So you're not going to see an immediate return of like getting that cashflow every single month. But like say you have a five year plan or a 10 year plan where you want to be able to put your W2 job. Well, maybe you don't, you just take a little bit of cashflow now and you just bank on that appreciation. Like, yes, there is the risk of the property not appreciating in 10 years, but there's also the risk of you doing an eviction, like in New York state, and it taking a year to actually get the tenant out and you had no cashflow that whole year anyways. So there are risks and pros and cons to both, but make sure you understand what your main driver goal is. And maybe appreciation is actually a better play for you than even cashflow is. So maybe you should kind of tailor how you're looking at markets based on whatever, when you're going to go after, or a mix of them. Like, you know, if you're looking for appreciation and maybe a mix of cashflow, some of the Southeast markets are actually good for that. Like Georgia, Tennessee, and the Carolinas. I think for me, it's like, if I were in this situation where I'm like rushing to try and replace my income, which is the situation that I was in for me, I'm like, I'm like focused on cashflow first, because I just want to, I want to replace the income. I want to keep the lights on. I want to make sure that like I can pay my mortgage and feed, you know, feed my family. So for me, it's like, man, where, where can I go get the best cashflow? Let's get to the number I need to get to. And then I, and then I was able to kind of turn my attention to other things and different projects and different goals. But, um, I'm, I'm leaning a little bit more so toward, uh, toward the cashflow, but agree. Every market, uh, has a different benefit, right. And people use it for different reasons. But once you, once you've got your market, I think you then need to layer on your strategy and really it could go either way. Like maybe, maybe you pick your strategy first. I might even say that. Maybe we pick strategy first and then we say, go pick your market. Because depending on what you want to do, some markets are really great for one strategy and not great for others and, uh, vice versa. So I might actually flip that around. Uh, we're like, let's pick your strategy first, but either way, um, the different strategies you have in front of you, you've got traditional long-term rentals, uh, you've got short-term, you've got midterm, you've got flipping, right. Those are probably like the most well-known strategies that that kind of exists. Uh, and then you kind of have, you know, uh, like co-living, right. Where you're like renting by the room, uh, that that's gained a lot of traction over the last couple of years. And then there are the, the, the strategies that are businesses more than they are real estate investing, but they just kind of like layer real estate in there. So you have things like assisted living facilities, uh, sober living, um, gosh, what are, what are some other ones that we've seen people do here on the podcast? I mean, the, the, the options are, are limitless. Um, self-storage, right. There's probably another big one there hotels. Um, but picking the strategy that you feel makes the most sense for you and for that market that you focused on. And again, I think each one has its own merits, short-term rentals, midterm rentals. Typically you can produce more cashflow per square foot, right? Like I can buy the same house. And again, depending on the market, maybe generate two X, three X, four X, five X, what I would generate if that property were a long-term rental, like, you know, my, my five bedroom cabin in the Smoky mountains, it would make no sense as a long-term rental. Like it, I don't even know if it would cover the mortgage as a long-term rental, but as a short-term it does incredibly well. Right. So depending on the strategy, um, and depending on the market, I think you've got to line those two things together. Now you also have to figure out how much capital you have, and that's going to actually factor into what market you're able to select. So maybe you select LA, you want to invest there and do a short-term rental, but you only have $50,000 for a down payment. You're most likely not going to be able to purchase a property in that market with only $50,000 as a down payment. So you have to understand where your money, where the funding is coming from for this property. So what do you want to put down as a down payment? How much do you have for reserves? You want to have at least at very minimum three months and at best six months of reserves, um, in place for this property. So you're not going to take your whole life savings and put it as a down payment and have nothing left afterwards. Um, so typically on an investment property, 20% is down. Um, there's some second homes. If you're going to purchase a property that's going to be a short-term rental, but you'll also use it. Tony, what's the rule? Like I know it's a very gray area about for second homes, you have to at least use it X amount of time or something. Yeah. There's no hard and like fast rule, like from the, from like the actual, uh, like housing authority. But, um, generally lenders say you've got to use it personally for maybe seven to 14 days out of the year, right? You got to have some level of person. And what's the down payment right now? Like for those like 10%, 10%, uh, typically now, now rates are a little bit higher than what they used to be. It used to be you can get them like in lockstep with the primary, but now they're, they're a little bit higher than a primary residence. And then also if it's going to be your primary residence, you can use an FHA loan, um, for three and a half to 5% down. There's even conventional loans that will do 5% down if it's going to be your primary. Um, and then VA loans, 0% down. So, and also USDA loans. So there's tons of different loans options out there for you, especially if it's going to be your primary residence. Um, there's also a DSCR loan. So this is where they actually look at the performance of the investment property to make sure that you're going to collect enough rent to actually cover the expenses and the mortgage payment on the property. And they don't look at you as much. So if you have a high debt to income from other things, then this is a great option for you is to look at the DSCR loan, but those are typically 20 to 25% down. Um, and then if it's a commercial property, you could be seeing even higher, like up to 30% down on the property. The only other loan I'd add Ash is the, this is my favorite one to talk about, but it's the NACA loan. Um, if you haven't heard of the NACA loan, I'm going to blow your mind right now. But basically if you're, if you're owner occupying a house, now you, you can't have any other open mortgages, right? So this truly is for true rookies. But if you have any other mortgages under your personal name, you won't qualify for this loan. Um, but if you're, if you're buying, you know, a property, you can go up to four units. It's 0% down, zero closing costs, 0% down, zero closing costs. And the interest rate is typically about a point lower than whatever the prevailing interest rates are for the day. It's like you can literally go to their website, NACA.com and they always have their, their interest rate posted right now on a 30 year fix is 5.75%. If you go check any other website, it's probably like 6.7, right? Somewhere in that ballpark. So you get a point lower typically on the interest rate, no down payment, no closing costs. Now it is an absolute, uh, terrible, uh, like application process. And there's, there's a lot of restrictions on like refinancing. I think you have to hold the property for five years or so before you can refinance. Um, so, so there are some restrictions, but if you want to get into a four unit with the least amount of capital possible and start building net, uh, your net worth, uh, and building cashflow, it's one of the best loan products out there. And what's harder finding a property, saving more for down payment or having to do extra hoops to jump through for, you know, to get an actual loan. Like just because you hear something as hard doesn't mean you shouldn't try for it because it actually could be easier than you trying to save up a ton more cash to actually get into a property. Just kind of think about that. Sometimes those hurdles are all in all just the mindset thing is to, it's actually going to be easier for you than if you go the long way around. Now let's work on replacing your salary with cashflow, starting with property number one. Okay. Step one, you're going to buy your first rental property. Okay. We're actually going to buy a sample property here at $200,000 duplex in Cleveland, Ohio. As your first, uh, example, here's your first property you're going to buy. So this property tends to be a C class area, but you could actually turn it into a B class with a little paint and sprucing to get this property up because it is in a decent area. So obviously not every market has $200,000 duplexes, but we're just using this one as an example. Um, so for another example, like Tony still finds cash flowing properties and higher price markets using short term rental strategy. I, as we talked about had found $20,000 duplexes even more affordable than this one as a long-term rental. But this one, we're just going to use Cleveland, Ohio as our example today. No guys, as we go through this, um, it's having the right tools helps us out as well. So if you go to biggerpockets.com slash calculators, you'll find the BP calculators and Ashton, I've talked about this before, but like the first real estate deal I ever purchased, I ran through the BP calculator, right? So these are tools that actual real estate investors are using, but let's just get some assumptions here on this 200 K duplex, but we're going to go with long-term rentals, long-term rental strategy on this property. Uh, we'll assume, uh, we'll make some assumptions around, uh, expenses and income. So for example, 3% average rent growth for, for this market, uh, 5% average insurance increases, 3% average property tax increases, 5% increases on, on maintenance, right? So those are just some of the ballpark assumptions we'll, we'll make going into this deal. So let's go over some of the options on how we can actually take this deal down. And the first option, which I think is one of my favorite options, especially for Ricky's, um, who maybe don't have a ton of capital saved up is to house hack. And again, for rookies that aren't familiar with that phrase, house hacking is simply buying a, an investment property, but also living in it. And it can take a lot of different shapes and forms. But for, for this example, uh, let's say that you get three and a half percent down, right? That's a $7,000 down payment for this deal. So when we look at your, uh, again, ballpark, principal interest tax and insurance, maybe even some, some PMI, we're just at about 1800 bucks per month that you'd be spending, uh, to like own this property. And then we've got repairs, maintenance, uh, vacancy. Um, and then we've got rental income of about 1200, right? So what that does is that if we take the mortgage payments, your principal interest tax and insurance at 1800, we add on expenses of about another, what is that? Uh, three 50. Yeah. Right. So we're, we're somewhere in that ballpark. And then your rental income for those other units is 1200. Your net housing cost is only eight 61, right? So some people say, well, man, it's not covering everything to live in that house. Like, is this even a good house hack? Well, look what you're getting. You're getting a place to live subsidized by the other people that are living there. And it's like, could you go control an asset for that? That amount that's going to appreciate over time for 800 bucks a month, you'd probably be sending that on rent somewhere else anyway. So you're, even if your living costs are the same, at least you're putting it into an asset that you own. And then once you move out, right? Like once you actually move out, well, then what happens to the cashflow? So feels like a, like a solid first option. So now for option two, we're going to look at another property. That's going to be a 20% down payment. Okay. So we're going to do $40,000 down, and this is going to be a conventional loan with a 7% rate. Okay. Okay. So that's going to be if it's your primary residence, but if you are actually purchasing this property as an investment property, not going to live in it, we're going to do a conventional loan, 7% interest with a 20% down payment, which would be about $40,000 down. Okay. Your mortgage payment now is going to be 1,447. It's going to be a little bit lower because you put way more money down on the property. You're not going to have PMI because you put 20% down. You're still going to have insurance, maintenance, vacancy, rental income will be about 2,400 because now you're renting out both units instead of one. So your cashflow is going to be $477 per month. And we even did it with just like, if you hired a property management company and just to see what it would be, and it would be $285 based on what the average cost per month is for a property management company. But so just based on the year one numbers alone, you would need around 11 to 19 of these properties to replace your 5,500 per month salary. But the numbers also tend to get better over time. So I have a perfect example of this. I bought a property for 143,000 in 2017 that property cashflowed very little. I put 20% down on the property and it was only cash flowing about $300 a month. Now that property cash flows about $1,200 a month. I haven't done a major rehab or anything like that. I fixed the bathroom. We replaced the shower. I think it was like maybe like a $2,500 job, but like it's not like I went and did a big, huge, you know, change and it's worth more money now. This property just over time rents have increased in that area. So the same thing can go with these properties as you hold onto them over time. A lot of your expenses will stay fixed except for probably taxes and insurance, but you'll be able to increase rent over time and your cashflow actually gets better and better as time goes on. So that's also something not to bank on that. Like don't take negative cashflow now to like hope that in two or three years you're going to have positive cashflow from increasing your rents. But it's just something that can actually help your cashflow grow and grow is just from doing rental increases every single year. Yeah. And that's one thing I'll add to you, right? Like, like if we go back to the, to the house hacking option one, again, they were paying about just over 800 bucks per month to like live there and assume that their rent would have been 1200 bucks somewhere else. They're saving about four grand a year in rental income or like paying out rent to someone else. Right. So even if they did nothing, but save that four grand and they just set that aside into a different account within two years, it'd have enough saved up again to go buy another duplex. Right. And it's like every two years, basically we're doing nothing else with saving the money that they're not paying into rent. They can go buy another property. So even if you did nothing but that over the course of a decade, you basically have enough to replace it. This average income, that's assuming no increases in rent, assume that you never get a raise at your job. So you can't save anything else, right? Like if everything was just static and you did nothing else, but save four grand a year within a decade, you could replace the 65 K that we're talking about. And guys, like obviously a decade isn't a, isn't a short period of time, but think about how simple that process is. Think about how uncomplicated and unsexy and easy that entire process is. Buy a property, live in one piece, rent out the other piece, save the money you're not paying a rent, do it again. And now, now you, now you never have to work in for the rest of your life. It feels like a fair, fair trade off. And I think that's the thing is a lot of people overcomplicate it. Um, and really it can be that simple, but you also have to be very diligent. So after you've bought that first property is step two is really to reevaluate and buy more of the, this is working for you or pivot. So here's some questions to kind of ask yourself after you purchase that first property, are you breaking even? And are you cashflow positive? How long does your property stay vacant? If you've had any turns, is rent keeping pace with your expenses? So are you increasing every single year? Are you keeping up with what market rents are in your area? Did all of a sudden your insurance skyrocket on this property? And then how many hours per week, what is your time that you're putting into this property? Is it way more involvement than you thought it would be? Um, and then even on the short-term rental side, you know, is it making the cashflow that you thought would it be better to pivot to maybe an MTR or a long-term rental? Does your property stay booked? What's your, you know, occupancy, how many, you know, what's your demand seasonally looking at all of these different things and the same with midterm rentals, um, is it properly, you know, occupied? Are you seeing a lot of vacancy in between? Maybe you should adjust to short-term rentals. So really evaluating where that first property, you know, has gotten you and what it looks like before you actually make the next purchase. Um, I think I made that mistake is this, I was just in acquisition mode and I didn't focus on operations or the performance of my properties. I just wanted to get as many properties as possible as fast as I could. And so step number three is stabilize and increase cashflow. So like really put intention into making sure your property is stabilized. It is operating properly. Um, you're not just rushing into the next deal. So, um, there are several strategies you can use to, to boost your cashflow. And of course, obviously buying more properties per year, raising rents to keep up with market demand of what rents are in your area, or you can offer renovations to your tenants and say, Hey, you know, these pro these carpets are pretty worn in the property. You know, I'm not sure, you know, I just bought it. So I'm not sure how long they've actually been in there, but if you would like, we're willing to replace all the carpets for you in the area and increase, increase your rent by $50 per month or something like that. And I have done that before. And most of the time people say yes, if they say no, okay, that's fine. You wait and do it at the turnover, but I'm kind of gives you some options to increase the rent and cover the cost of actually making those updates. And then, um, you know, so create additional income streams from the property. If there's storage space, if there's parking, you know, like charging extra for those, um, putting coin operated, uh, washer and dryer on the property. Um, other things are, you can, instead of buying another property, you can take all of your cash that you're saving and actually pay down your property. Um, if a rate starts to drop, you could refinance the property. Um, and then one big thing don't forget to do is when you actually have a lot of equity built up in the property and you put down maybe three and a half or 5% and you're paying PMI, make sure you go back to your bank and request to get that taken off when you have that 20% equity built up in your house. So sometimes it doesn't even mean that you've paid down all of that extra, like say you put 5% down and you paid off the rest of the 15%. Sometimes your property will just appreciate enough to give you that little extra boost you need where they'll come in and probably do a book appraisal on it and make sure that you hit that amount and go ahead and remove it. I mean, sometimes that can be like a hundred to a couple hundred bucks a month that you're saving. That's a pretty nice increase to your cashflow. Now let's help you quit your job. Um, so we, we talked about the strategy, the markets building the cashflow and what that looks like, but now it's time to repeat and retire. So that's the fourth step here. So again, if we go back to option one, I talked about this a little bit before, but it's like if your house hacking and you just move out of that property and the, the, the, you know, say you'd say there for 12 months, you move out, you rent out the other unit that makes more cashflow plus the rent growth and you house hack again. So in year number two, property one looks a little bit like this. And again, these are ballpark numbers, but your principal interest taxes and insurance is about 1700. Um, that also includes your, your PMI. Uh, you've got landlord insurance of about 120 bucks maintenance, about 175 vacancy, an 8% call it 200 bucks, uh, management fee, another 200 bucks. Rental income is now just over 2,400 bucks, almost $2,500. So your cashflow after everything, uh, with now even a property manager in place is about nine 24 per year. If you're not using a PM and you're self managing is about 3,300 bucks. Now, again, if we, if we scale that out by year 10, and if you just keep doing the same thing, you've been able to increase your cashflow to call it like almost six grand a year for using a PM and about almost nine grand a year for not using it. So like guys, like again, very simple process to kind of keep this moving along by just reinvesting, reinvesting those profits back into the next deal. Now if you were going to do the second option of using this as an investment property, not your primary residence, let's look at what this property would look like in year two. Um, so this would be, you know, your mortgage stayed the same in 1400. Um, your rental income is 2,472 and your cashflow without a property manager would be increased to $518 per month. But now let's skip to year 10. So your mortgage is same 1,563. Your rental income has increased to $3,131. So that now leaves you with cashflow without a property manager of $877. And when we say without a property manager, I always think you should run your numbers with a property management fee in place. So in this case, you know, you're at year 10, you're like close to retirement here with all your properties. You may want to just hand it over to a PM. So your cashflow would be $627 with that. So if you're buying and holding these properties for 10 years, you really only need six to 11 of them to replace a $65,000 salary with rental cashflow in that time. That means you could buy one to two rentals every year over a decade and reach your goal. And this is just, if you're scaling the slow, boring way, taking it simple, small multifamily properties and renting them out to longterm tenants. And I think a big thing that can really help you with this is you look at the $65,000 salary. And to some of you, you may say, that's not enough. That's my salary is way higher than that. I couldn't live off of that. One thing you really have to take into account is the tax advantages of this. Amanda Hahn, a CPA who works with a lot of real estate investors, she posts a lot about this on her social media about one person in the, you know, in a relationship quitting. So one spouse quitting their job and becoming, you know, full-time real estate professional status to be able to write off the properties, do a cost segregation, increase how much you're able to depreciate in that first year. And you're going to be able to offset what you would have paid if you were a W2 employee. So let's do an example. Like say I made a hundred thousand as a W2 employee. I pay taxes out of that $100,000 that maybe my net anyways is around 65,000 is what I'm actually getting anyways. Well, with real estate, you could actually offset that cashflow that you're getting with depreciation where you're not paying any taxes. So just something else to think about, you know, like maybe talk about this with the person you do tax planning with or your CPA as to what you pay in taxes now and what's actually your take-home pay and what would that need to translate? So maybe it's not actually converting your salary, your gross that you're making, but what's the after tax dollar amount that you need to make to actually, you know, get the cashflow for, for these properties. And I think the last thing I'd add before we wrap here guys is that as you start to do more deals, you start to build your confidence to do other things. So even if you're doing, I'm house hacking a new deal once a year, maybe you later on house flipping and now you're flipping a house a year and you're bringing in an extra 20 to 30 K per year, just flipping one house a year. Maybe you take on managing for other owners in your market, right? And now you've got consistent cashflow coming in from a management business. There's so many different ways and strategies and things that you can leverage as you start to build your portfolio because you start to see what's really possible in the world of real estate investing. So guys, our hope is that as walking through this model, obviously it's, it's an example. Don't boot us up in the comments on YouTube because they're like, Hey, you can't find a duplex in Ohio, Virginia. Okay. Right. Um, the, the, the goal here is just to lay out a path, a roadmap of what this could look like and to give you realistic expectations of if you just follow a very simple, straightforward process, the goal of you replacing your income or at least getting close to that. It's pretty reasonable. Now, if you guys are interested in getting your first deal, make sure you head to biggerpockets.com and check out all of the resources and tools that we have available for you to use, such as the bigger pockets calculators. We also have resources such as downloadables that are checklists, templates, guides to help you get your first deal. I'm Ashley Eves Tony, and we'll see you guys on the next episode.