Real Estate Side Hustle: 10 Properties in 10 Years With Jonathan Sanchez

investing in multi family apartments

real estate side hustle interview

Welcome to the Wealthy Nickel Side Hustle and Entrepreneur Interview series, where I share inspiring stories of people pursing financial freedom through entrepreneurship.

Today I got the chance to interview my friend and fellow blogger, Jonathan Sanchez. He and his wife decided to invest in rental properties to build wealth for their family, and have a goal of acquiring 10 properties in 10 years. In addition, he runs the blog Parent Portfolio, where he shares his experiences raising a family while investing in real estate.

As you know, real estate is near and dear to my heart, as this is how my own family was able to grow our net worth to seven figures and beyond.

While many people consider real estate to be “investing”, it really is more of an entrepreneurial side business. You have to find properties, manage contractors, deal with tenants (or at the very least deal with property managers), and more. It can be fairly passive, but the more of an active role you take, the more money you can make as you’ll see from Jonathan’s story.

Since there is such an overlap between Jonathan’s story and my own, I will be interjecting a lot to share my own experiences. I hope this interview inspires you to consider real estate as a great side hustle and wealth generator!

What is your side hustle or business?

I’m a real estate investor and own a couple of investment properties in my local area. Our ultimate goal is to buy 10 properties in 10 years.

What made you want to start a real estate side hustle?

My wife and I began our small real estate business as a way to teach our kids how to be fiscally responsible.

We were looking for ways to generate passive income and read one author mention how they use real estate to build wealth. The more I self educated myself on the topic, the more confident I felt about investing in real estate.

Do you do real estate full-time or do you have a day job? If you have a day job, how do you juggle both? 

Real estate investing is not my full-time job, although I do have a day job.

A couple of my investment properties are along my way to work. So, when my properties are in the process of rehab, I would sometimes stop by the property during a lunch break or on my way back home.

My job is also flexible enough where I can take breaks to make phone calls, if necessary.

Wealthy Nickel Note: In my experience, the time commitment ebbs and flows. As Jonathan mentioned, when we first bought a property or had a rehab going on, I would stop by a few times a week to check on things. I also have the flexibility in my day job to make the occasional phone call, which is nice.

I wouldn’t let having a full time job stop you from investing in real estate. While I like to manage my own properties, you can also outsource all of that to a property manager to make it more passive.

How and when did you get started with your real estate side hustle?

Around March 2019, I shared with my financial advisor that I would like to invest in real estate. He connected us with a friend and seasoned real estate investor to mentor us. Two months later, we bought our first investment property.

Do you have a mentor, coach, or training you used to help you get started? If so, how did that help you?

Yes. Our mentor is a real estate agent and owns several investment properties in our area. He introduced us to a network of other professionals in the real estate industry. I attribute a lot of our success to the help of these connections and relationships we’ve built.

Wealthy Nickel Note: In my opinion, having a mentor is a key component of succeeding in real estate investing. A mentor can give you the advice and confidence needed to take that first step and buy a property, which can be a huge mental barrier.

Whether it’s a real estate agent that invests on their own (like Jonathan’s mentor), a local flipper or rental property owner, or even an online community such as BiggerPockets, having a place to go with questions will go a long way to determining your success.

real estate side hustle pinterest 3 - Real Estate Side Hustle: 10 Properties in 10 Years With Jonathan Sanchez

What are the main costs involved in your real estate business?

One of the major expenses is making a down payment, which is usually 20-25% of the purchase price. If improvements need to be made to the property, then you’ll also have to pay for contractors.

However, utilizing the BRRRR method is a way for investors to recoup their initial investment. If you find a great deal, the rental income should be sufficient to build up a cash reserve to cover vacancies and repairs.

Wealthy Nickel Note: If you are unfamiliar, BRRRR stands for Buy, Rehab, Refinance, Rent, Repeat. You can often find good deals on run down properties that need a little love.

If you can buy a property for $100,000 that needs $20,000 worth of work, and afterward will appraise for $150,000, you can pretty much refinance all of your money out at the end and have a cash flowing rental with no money down! Of course it doesn’t always work out perfectly, but it is a good strategy to reduce the amount of money you have tied up in your rental properties.

Tell me about the day to day activities involved in your side hustle (what’s a “day in the life” of a real estate investor like?)

When I’m working on a new house, I frequently follow up on the progress of the contractors about four times a week. A rehab project can take about two to three months to complete. 

Once the property is rented out, I spend no more than eight hours a month managing tenant concerns.

How did you build the business up to where it is now from where you started?

I always kept my eye open for good deals. A property was not worth pursuing unless the numbers made sense and projected a decent return. I also used the BRRRR method to my advantage to scale so quickly.

Wealthy Nickel Note: We were always on the lookout for good deals as well. Real estate is fairly non-liquid and when people want out quickly (e.g. a tired landlord), you can often buy for 7o or 80 cents on the dollar. This is one way we were able to build wealth so quickly – we had built in equity of $20-30,000 on most of the properties we bought!

It’s also crucial to know your numbers and whether a property will make sense as a rental. If you’re looking for some resources there, I’ve written extensively on real estate investing calculations every investor should know, and particularly the 1% rule for rental properties.

What do you think made you successful where others have failed?

I live in an area where properties our relatively inexpensive to purchase that also generate cash flow. Some investors in other parts of the country are not as fortunate. They have to invest out of state, which is a strategy that not everyone accepts.

Wealthy Nickel Note: Not everyone can find cash-flowing rentals in their backyard, but out of state investing is not a bad way to go either. I sometimes wish all of my properties were out of state so I were forced to hire a property manager and give up managing my own rentals. I have a bit of a control problem!

I think one place I see a lot of investors fail is that they have unrealistic expectations. You will not become a millionaire overnight.

A really good deal on a rental property will generally net you a couple hundred bucks a month after all expenses. You aren’t retiring on cash flow alone.

However, there are many longer term benefits to owning real estate such as tax deductions, appreciation, and the fact that the tenants are paying down your mortgage. If you look out over a 5 or 10 year time horizon you can easily be making 20-30% annual returns on your initial investment, it just doesn’t hit your bank account every month.

Tell me a story about your best deal…

I acquired my first property for about $135k. After making improvements, the property appraised for over $171k+. After two years, the current market value of property is about $205k+. 

Wealthy Nickel Note: This goes to show the power of real estate and being able to find good deals. Where else can you turn $135,000 into $205,000 in two years? Jonathan didn’t say how much he put into the rehab, but mine are typically $20-30k. So if he put 20% down ($27k) plus a $25k rehab, he had $52k of cash invested in the property, and his equity is now $45k. Almost doubling his money in two years!

What obstacles have you had to overcome to achieve success?

My first property was broken into during the rehab phase. The thieves ripped open the drywall and stole $50 worth of copper from the basement bathroom. The repairs cost over $8,000!

I had to accept at that moment that real estate investing is mental and that I had to decide how I was going to respond. I bought my second property six months later.

Wealthy Nickel Note: I think every investor has a story like this. We made lots of mistakes with our first rental property, including having our contractor skip town with over $15,000 of our money in his pocket. It was a huge loss at the time and I thought about giving up. But looking back, that property is still one of our best rentals and has more than made up for the money we lost in the beginning.

What are your goals for the future of your real estate side hustle?

The current real estate market is very hot right now, which pushes prices to point where they will not cash flow in my area. Thus, we’re currently just waiting and keeping our eye out for the next good deal.

Wealthy Nickel Note: Right now is a tough time to find a house, but even in my red hot market (Dallas, TX) there are deals to be had if you know where to look. A few months ago we bought a house off the MLS – which everyone says can’t be done in this market. There were at least a dozen bids and we came in under the highest offer by almost $20k! But we were able to offer cash and a quick close, which was important to the seller. Be patient and keep an eye out, you never know when you’ll find your next property!

What are the pros and cons of this side hustle?

The pro is the immense cash flow the property will generate after the debt service is paid off. Unfortunately, investors will have to work with tenants, who, if not properly screened, can be a major headache. 

What advice do you have for someone looking to get started? Who would be an ideal fit?

I advise people interested in investing in real estate build a relationship with a local banker familiar with real estate investing. Also, start living stingy to help save up for a down payment. It will be a small temporary sacrifice in order to acquire their next rental property.

Thank you for sharing your story Jonathan! It’s great to see others pursuing financial freedom through real estate.

If you want to learn more about real estate investing, here are a few articles I’ve written about our journey:

Our First Rental Property (And How You Can Learn From Our Mistakes)

Is Investing in Real Estate Worth It? 6 Lessons from an Actual Investor – Me!

Income Report: How We Made an Extra $100k Last Year

Andrew Herrig is a finance expert and money nerd and the founder of Wealthy Nickel, where he writes about personal finance, side hustles, and entrepreneurship. As an avid real estate investor and owner of multiple businesses, he has a passion for helping others build wealth and shares his own family’s journey on his blog.

Andrew holds a Masters of Science in Economics from the University of Texas at Dallas and a Bachelors of Science in Electrical Engineering from Texas A&M University. He has worked as a financial analyst and accountant in many aspects of the financial world.

Andrew’s expert financial advice has been featured on CNBC, Entrepreneur, Fox News, GOBankingRates, MSN, and more.

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