091 | Rich Carey Real Estate | Building a Rental Real Estate Snowball Machine without Debt

First Steps

Rich Carey shares his journey into real estate, starting with his first property purchase in Montgomery, Alabama. He initially bought a $30,000 property, investing an additional $15,000 for renovations, and rented it for $750 a month 1. Despite initial challenges, he quickly expanded his portfolio, purchasing six properties in cash within ten months 1. Rich emphasizes the potential of smaller cities like Montgomery for real estate investments, noting that these areas often offer better opportunities than popular, high-cost cities 2.

Montgomery is one of lots of cities like that where these types of things are possible.

--- Rich Carey

His rapid acquisition strategy was facilitated by selling a house in Washington, DC, which provided the capital needed to continue buying properties in Montgomery 3.

   

Remote Management

Managing properties remotely, Rich relies heavily on a property management company to handle day-to-day operations. From the outset, he engaged a management company to avoid the hassles of direct landlord responsibilities, such as maintenance calls 4. This approach allowed him to focus on expanding his portfolio while living abroad 4. Rich's management company handles all financial transactions, depositing rental income directly into his bank account and providing detailed monthly reports 5.

I wasn't involved in the management of my properties at all.

--- Rich Carey

Trust in his property managers was crucial, as they were empowered to make decisions on minor issues, ensuring smooth operations without constant oversight 6.

   

Strategic Approach

Rich advocates for a conservative investment strategy, emphasizing the importance of financial stability before entering real estate. He advises against risky financing methods, such as buying properties with no money down or using credit card debt 7. Instead, he highlights the significance of the 1% Rule, which he learned later in his career, to ensure properties generate sufficient rental income relative to their purchase price 8.

Do it from a position of strength, do it from the right place.

--- Rich Carey

Rich's success in Montgomery was partly due to his strategy of making low-ball offers on multiple properties, often securing deals on foreclosures and short sales 9.