Tailwind Talks
Tailwind Talks is a podcast for high-performing professionals who want to build serious real estate portfolios without leaving their careers. Hosted by an airline and military pilot turned investor, it dives into actionable strategies for scaling your real estate portfolio while balancing the demands of a full-time job.
Tailwind Talks
Inside My 60-Unit Real Estate Portfolio: What I Actually Make Each Month
A rare glimpse behind the curtain of real estate investing reveals what actually works—and it's probably not what you've been told. Cole, a part-time real estate investor balancing a full-time airline career and military instructor role, shares the unvarnished truth about his 60-unit portfolio generating $55,000 monthly in gross income.
Unlike the glossy success stories that promise quick riches, Cole demonstrates why focusing on smaller properties in Milwaukee has outperformed the conventional wisdom of chasing large apartment buildings. Three duplexes bringing in $6,000 monthly versus a four-unit at $4,000 with identical down payments? The math speaks for itself, especially when institutional investors are overpaying for larger complexes.
The portfolio's financial reality deserves attention: roughly $17,800 in monthly loan payments, $6,400 for property taxes, $2,200 toward insurance, plus property management and capital expenses. While this leaves theoretical monthly profits of $8,000, Cole reveals why that number rarely materializes as planned. More importantly, he shares the discipline that's accelerated his wealth-building—reinvesting every dollar back into the business rather than extracting it for lifestyle expenses.
Perhaps most valuable is Cole's insight into equity growth as the true wealth-builder in real estate. While cash flow keeps the operation running, the equity accumulation represents life-changing wealth. It's a refreshingly honest perspective in a field often characterized by exaggerated claims and overnight success stories.
Want to build lasting wealth through real estate? Subscribe now for Cole's upcoming videos on equity management strategies and detailed property breakdowns that show exactly how his portfolio functions in the real world.
What's up everybody. My name is Cole. I'm a part-time real estate investor, full-time legacy airline pilot and a part-time military instructor pilot. I want to give you a look inside my portfolio and give you some things that I wish I would have known when I started out in real estate about 10 years ago. Right now, with my partners, I own 60 units that bring in about $55,000 a month in gross income. You'll see that that makes up the bulk of the portfolio. I've got six, three units. I've got four single family houses and one, four units.
Speaker 0:So not really the kind of sexy, cool deals that a lot of people talk about. You know, go buy yourself a 30 unit apartment building or go buy 100 units. That's what you should start with. I don't have any of that. The biggest thing I've had as far as one building was an eight unit that I ended up selling. The entire portfolio is located in Milwaukee. That's where I'm from, that's the market that I know, that's where I have connections and whatnot. So I've kind of just focused in on that market. I have not bought anything outside of my local market. I know there's a lot of people Guys podcast and I do believe that, but I also think that I just happen to live in a place that the numbers make sense in, and I also live here, so to me it's the best of both worlds. I'll throw up some visuals so you can get an idea of what that looks like in terms of the portfolio breakdown.
Speaker 0:But there's a method to the madness. Like I said, the reason I have so many single families and duplexes is really because I think that that's where the best deals are at. Just the other day, I was talking to one of my partners about the fact that I can go get a couple duplexes or single families that are bringing more money per month than the equivalent four unit in terms of purchase price. In the example that we were looking at, I could get three duplexes that bring in about $6,000 a month in gross rent, compared to a four unit that would bring in about $4,000 a month in gross rent, and they're going to require the same down payment. They're going to have the same interest rate, they're gonna have the same monthly payment, probably about the same taxes. So there's no real difference. The biggest difference would be the capital expenses that you would plan to spend down the road, which would be, you know, you're gonna have to get three roofs instead of one roof. You're gonna have three foundations to worry about. You're going to have potentially six water heaters and six furnaces instead of four. So it's not necessarily apples to apples, but in terms of cash, on cash return, which, again, going back to it, that's what I believe in that's the thing that I think matters the most.
Speaker 0:If you're looking at it strictly through that lens, I think that duplexes and single families provide the most value by far, at least in my market. Another reason for that is all the institutional investors, all the big buyers, the people that are way, way bigger than me. They're buying up all the multifamily stuff. I mean. An example in Milwaukee is we have a guy named Yusuf Barada who's got like eight or 9,000 units maybe more by now that are all multifamily. I don't think he owns any single families or duplexes, and if he does, it's a very small amount. He owns almost all multifamily and so guys like him are chasing those deals and they can overpay. They can use all kinds of creative financing to get those deals and I'm competing against those guys as a small buyer and I just can't compete. My focus now has shifted towards things that are on the lower end of the market, not necessarily in bad neighborhoods, but at least purchase prices that are more reasonable, because I'm trying to make up for the fact that interest rates are so high, just like most of you are, if you're looking at buying a house.
Speaker 0:Now let's talk about expenses. This whole portfolio brings in $55,480 a month. Now that's assuming everybody pays rent, which, if any of you've ever had a rental property, you know that that never happens. So you can automatically take off five to 10% just for people that aren't going to pay rent that month or they're going to be behind. Maybe they'll pay up down the road, but at least in terms of this the scope of this month they're probably not going to pay, so we could probably take five thousand dollars off the top just for that.
Speaker 0:I didn't include that in my numbers that I'll give you right now. I'm going to give you the strict numbers that I have to adhere to every month. What people pay in rent is going to ebb and flow every month and you just have to be able to roll with the punches, but loan payments for the entire portfolio are right around the seventeen thousand dollar a month mark. Now there is some nuance to that because I have some deals that are on hard money that are being shifted to long-term loans and their payments are going to fluctuate. So kind of give me some grace, because there is always stuff going on that's changing things.
Speaker 0:We just sold a property recently that was on a portfolio loan. It was three duplexes on one loan. We sold one of them off, so the other two are still on the same monthly payment, even though they lost one of the income generators. But we paid down $100,000 off the loan. So, yeah, the monthly payment is still the same. So the cashflow is squeezed. But our equity has really grown and I'll make a whole video about equity and how I'm managing that and trying to manage that.
Speaker 0:But $17,800 a month and just loan payments every month, then you've got 6,300, just under $6,400 a month in property tax. Now that's just multiplied out by 12. I just took our gross property taxes and divided it out to try to get a monthly number. Now that part is tough too, because sometimes we pay our property taxes in bulk. Sometimes we'll pay them monthly. Milwaukee lets you pay them over a 10 month span, so sometimes we take advantage of that so we can retain cash for other deals. But in the end of the day, we end up paying the tax, so it's going to come out one way or another. We're looking at about $2,200 a month for insurance. It's actually a little bit more than that, but that was the numbers I had to work with at the time. Again, a lot of the stuff is changing. We're actually moving insurance companies for some of these properties, so bear with me.
Speaker 0:Property management is going to pay rent, so that number is not exactly going to be the same every month, but as a rough estimate it's going to be 8% of the gross rents. And if you assume that you're going to get, let's say, 95% of the gross rents or 90% of the gross rents every single month, then you can rest easy knowing you're going to pay about that much for your property management. And then I estimated about 30% of the gross rents going towards capital expenses. Now that encompasses so many things. We've got our utilities coming out through the property management company, so that's going to be water bills, electricity bills, things like that. But we also have we cut lawns, so we're paying for lawn care.
Speaker 0:We're paying for unit turnovers when a tenant moves out. You're going to replace a lot of things that were worn while they were living there. That's going to look like doing paint and flooring and new cabinets and maybe a new bathroom, a tub, a toilet, things like that, and generally speaking we're looking at about two to $3,000 a unit turnover because a lot of the duplexes they're not all the same. That's one benefit of having four units and multifamily that are cookie cutters every single unit because you can just use the same paint, the same flooring, the same everything and all those units and you can buy it all in bulk and get it for cheaper and then it's just easier for your crews working through it. We don't have that luxury because we have all different types of unit sizes. We primarily have two bedrooms and three bedrooms, but we have three beds that are one and a half bath, so they're a little bit different. We don't have the luxury of just plug and play every single unit and most people don't.
Speaker 0:Most investors are not going to have exactly the same unit layout for everything. In a perfect world you would, but more than likely you're not going to, especially starting out. So when you do the math on all that, assuming everybody pays, you should have about $8,000 a month that are left over. Now that doesn't exactly tell the whole story, because I could just tell you that and say, yep, I make $8,000 a month. Everything's great, but we use that money to fix roofs and do landscaping and buy new properties. We use them as down payment money. We use it as escrow money for certain things, so we don't actually touch any of the money every month.
Speaker 0:Every dollar that is saved in the business is used to reinvest in the business. That's something that I've come to an agreement with all my partners. We're all on the same page. Nobody's using any of this money to fund their lifestyle and, going back to some of the conversations I've had before, that's one of the most powerful things about having partners that are on the same page, because now we're all rowing in the same direction. We're all committed to reinvesting in the business and it's allowing the business to grow a lot faster than it would otherwise.
Speaker 0:If you're using that 8,000 a month or let's say, 5,000 a month, if people don't pay, if you're using that money to fund your lifestyle, then your business grow as fast, and so would I love to quit my job and just sit at home all day and just collect the rent checks and sell you guys the dream of unlimited money, the infinite money glitch, sure, but it's just not realistic, especially if you're starting out Right now. We're trying to build something that's going to be pretty big and that's going to require us to just shelf all the money and continue to reinvest it to the best of our ability. Now I've definitely taken some money out along the way, from selling properties primarily, and use that to fund certain parts of my lifestyle, but I'm not using on a monthly recurring basis. That's all from my normal job, that's all from the airline, that's all from the military flying. I'm not using any of my rental money to do that, and I think that puts you in a really powerful position too, because now I'm not beholden to.
Speaker 0:Oh man, I really hope everyone pays rent this month, otherwise I'm not gonna be able to make my car payment or my rent payment. I'm not thinking about any of that at all. Would I like to cover all these expenses? Obviously, yes, but other than that, I don't really care. I would love it to make as much money as possible every month, but I know that's not realistic. Some months furnaces blow up. Some months tenants just stop paying. You have evictions going on. Things are always happening.
Speaker 0:So To me, I don't want to put myself in a position where I'm just taking on all this risk to say, oh I know, management companies got it, everything's going to be fine. I'm going to start spending, spending, spending, because now you're risking your entire business and your lifestyle. So now you can lose both, and people do that, and I've tried to do my best to avoid that to the best of my ability. And I think that it takes a lot of discipline because sometimes you see the numbers and you're like oh okay, like I could probably go do something kind of wild right now. I've tried my best to hold off on that. Now, I'm not perfect. I've definitely made some wild mistakes along the way, but generally speaking, that's what we've stuck to.
Speaker 0:Another thing to think about with this stuff is this is a 60 unit portfolio that I could probably have doubled in size at this point or at least added in maybe another 20, 30 units by just buying deals. But I've been very selective about the deals I bought. I have bought some bad ones. Still, even with being selective, I've made some mistakes, but generally speaking, I've stuck to our principles and the things that we're looking for and I've passed on so many deals. I literally got somebody sent me maybe 20, 30 addresses over the weekend and I didn't want any of them.
Speaker 0:You have to figure out what your principles are, what your plan is, what you're looking to do, and stick to that, because people are going to send you deals, you're going to see deals that seem enticing and maybe you want to stray from what you've been sticking to, but every time I've thought about doing that or have attempted to do that, it's bit me right in the butt and it's caused me to now just stick to what I know and I'm not deviating from that at all because it's working. And obviously you're gonna have to adjust with the market. The market changes every day, every month, every year, so you're gonna have to change your plans slightly. But as a general rule, you wanna find what's working for you and you wanna stick to it, and the only way to find what's working for you is to get educated on what this stuff all looks like and try to implement it in your life the best you can. So, like I said, I'm gonna throw up a if everything goes well and it never does. So trust me when I say that number is probably closer to the three to $6,000 range on any given month. This is just giving you best case scenario with nothing going wrong.
Speaker 0:So that should cue you in your mind and say, okay, well, why would you do all this stuff? You have so much money in these properties you've, you know, you have this portfolio, but you're only making that much per month after everything's said and done. Why even do this? And I'll tell you right now. The biggest part of that is equity. The equity growth in this portfolio has been massive and that is where the real money is at. If people are selling you that you're going to become financially independent just off the cash flow alone by while using high leverage, while only putting 20% down or 10% down or 5% down, if people are telling you that you're gonna be able to live off that cash flow, they're lying to you. It doesn't exist, especially if you're not going to manage it yourself. If you manage it yourself, you can make things work a little bit differently, but if you're going to do what I'm doing you're going to work a full time job and build this on the side the cash flow is not gonna be enough for you to live off of, even with 60 units, even with 100 units probably, but I can tell you what the equity side of this stuff is absolutely nuts. The last couple years have been crazy and I'm going to make a video specifically talking about equity, how I'm managing it, what it looks like on a 60 unit portfolio. If you're interested in that, I implore you to subscribe and turn on the notifications, that way you see when that video comes up, probably in the next couple of days. That's my next video.
Speaker 0:I'm going to do some more videos about property breakdowns when I go do tours. I've got one coming up, I think maybe tomorrow, as early as tomorrow morning, and I apologize for the delay on posting some videos. It's been a wild couple days between just family life stuff and then also working for the airline. Yesterday I left my house at three something in the morning and didn't get back until like 8pm, so by the time it was all said and done I was just spent. But I'm back now. I'm going to try to average about two videos a day for the entire year. So I've got a ways to go. I'm going to make up for some lost time here and I'll talk to you guys soon. Appreciate.