13 Rental Units with a “Rinse and Repeat” Investing Method

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 24 March 2025

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

This investor built a multimillion-dollar real estate portfolio with low-money-down loans and little cash-to-close. Thanks to his smart “rinse and repeat” strategy, he’s quickly scaled from zero to 13 rental units in just four years, all while collecting thousands of dollars of cash flow a month. He would have never been able to get to this place if he hadn’t followed a strategy many investors are too scared to try. Mike Johnson knew the best way to take bigger career risks was to have a backup plan. The ultimate passive income plan? Rental properties. But he didn’t want to put 20% to 25% down on each property he bought, so he started where many investors do—house hacking. Four years later, he’s continued his repeatable house hacking strategy, purchasing a new property every year, living in one unit, and renting out the others. This has allowed Mike to build a portfolio worth $3.4 million in just four years while buying in B+ or A-class neighborhoods and taking home a healthy amount of cash flow. But he has dealt with his fair share of headaches—squatters, non-paying tenants, and a lot of purple paint. Mike still says investing has been a massive win for him, and you can repeat his same strategy! In This Episode We Cover: How to start investing in real estate with little money using the house hacking strategy Why your primary residence IS an investment (and a phenomenal one at that) The biggest mistake Mike made that led to him buying a property with a squatter in the unit The new 5% down multifamily loan you can use to buy bigger, better, more expensive properties The cash flow AND appreciation market Mike is bullish on (and keeps investing in) When to self-manage vs. hire property management for your rentals And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Ask Your Question on the BiggerPockets Forums BiggerPockets YouTube Apply to Be a BiggerPockets Podcast Guest! Mikes Instagram Mikes LinkedIn Maximize Your Real Estate Investing with a Self-Directed IRA from Equity Trust Save $100 on Real Estate’s Biggest Event of the Year, BPCon2025 Grab the Book “The House Hacking Strategy” Sign Up for the BiggerPockets Real Estate Newsletter Find Investor-Friendly Lenders Download the “Should I Buy Points” Resource Connect with Mike Connect with Dave (00:00) Intro (01:28) Investing to KEEP Working? (03:32) First Deal with $19K Down! (09:12) 3.5% Down 4 Unit! (13:27) Worst Tenant Ever (18:51) 3 More Units and Hiring Management (23:32) $1.5M Property for $38K Down! (23:41) SOCIAL - 38k cash for a $1.5m property (28:14) Your Primary is the BEST Investment Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1099 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This investor bought a property worth $1.5 million in a great neighborhood in a major U.S. city with only $35,000 cash in 2024.
0:11.1	It is actually possible.
0:18.1	Hey, friends, welcome back to the Bigger Pockets podcast. I'm Dave Meyer, head of real estate investing
0:23.4	here at Bigger Pockets. And today on the show, we're talking with Mike Johnson, an investor in Chicago.
0:29.4	Mike started his investing journey with a $13,000 down payment on a duplex in 2021. And he has
0:35.9	house hacked his way into 13 units in just four years.
0:39.7	Now he's living in one of Chicago's most desirable neighborhoods with thousands of dollars
0:44.5	in monthly cash flow and the potential for millions in appreciation over the next couple of years.
0:50.4	And Mike isn't doing anything that the vast majority of people can't do.
0:54.7	He's found deals on the market.
0:56.6	He's putting down as little as possible.
0:58.9	He's done relatively hands-off renovation.
1:02.3	And now he's sitting on this incredible portfolio just a couple of years later.
1:07.3	Mike today is going to tell us how his deep analysis of investing options has led to real estate in the first place, how one of the more extreme problem tenants I've ever heard of led to a free rehab for him and why he's a fan of the extremely long clothes.
1:24.6	So here we go. This is me talking with investor, Mike Johnson.
1:28.8	Mike, welcome to the podcast. Thanks for being here. Nice to meet you, Dave. Thanks for having me.
1:32.9	Thanks for having me. Excited to be here. Yeah. So give us a little bit of background. What were you doing
1:36.7	when you first got into real estate? And how long ago is that? So I got into real estate
1:41.9	four years ago during COVID in 2020, and I was a medical
1:45.9	device sales rep that sold devices in the operating room. So once COVID happened, we were restricted
1:50.9	access to hospitals, which was a major part of my day. Ironically, this was about the same time where
1:55.6	I had no student debt anymore, and I had this nest egg that was building. So naturally, I started looking at
	...

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