Here’s how I made $65,000 PER MONTH in Real Estate in 2017 (Income Breakdown + Strategies)

So for the $480,000 that I made from the first two income sources, plus the $300,000 in appreciation, that comes out to about seven hundred and eighty thousand dollars in 2017, which works out to be about sixty-five thousand dollars per month in real estate.

What's up, you guys? It's Graham here. So really quick, before I get into it, full disclosure: I've seen way too many videos like this on YouTube where someone claims that I make 1 million dollars per year, but you watch the video and they're so vague. They never really get into specifics; they never really share exactly what they did, and by watching the video, you actually come out of it more confused than before you had even seen it.

So I want to break that mold, and I want to share with you guys exactly how I made about sixty-five thousand dollars per month last year in real estate. I want to break it down, share with you guys exactly what I did, where the money came from, and some of the concepts and strategies behind that, that you could begin implementing.

I really want to make this so much more than just a "how much money I made last year," but actually share with you guys some strategies and concepts and things that have worked really well with me that you could begin using as well. Frankly, when I watch these types of videos on YouTube about other people, it ends up just being inspiring to me. I've watched other videos where people are making millions of dollars per year, and I take that as just motivation for what's possible and what I can do myself.

Then, I take the little bits and pieces from that, that I could begin implementing in my own life and business. So when it comes to making money in real estate, I have three sources of income. My first source of income is what I make as a real estate agent. The second source of income is the net rental income that I receive from the rental properties that I have, and the third source of income is the forced appreciation when I renovate one of these investment properties.

And that, by the way, is not counted on the screenshot I'm about to show you because Mint does not include that, and there's no way to really show that. So you guys are just gonna have to trust some random dude on the internet that I'm not making this up. In terms of forced appreciation, you're just gonna have to trust some dude on the internet making YouTube videos on that one. But for credibility purposes, because this is YouTube and people could say whatever they want and then it's up to the viewer to believe that or not, here's a screenshot for you guys.

Now keep in mind that equity is not included in this figure, and so keep in mind that I also have some other random small sources in here, but I'm not gonna get into that. I want to kind of round it out as best as I can. And then keep in mind for rental income, that's net rental income and not gross. I have a separate checking account for every single rental property that I have. I don't include that in Mint; I just include what I take from those checking accounts into my personal account.

So with that said, let's get into it. Let's talk about my number one source of income and my largest source of income, and that is working as a real estate agent. For me, that is the number one priority. It's not investing in real estate; it's not rental income; it's not YouTube videos. My number one priority, my main business, is working as a real estate agent, and absolutely everything else comes second to that.

And for me, working as a real estate agent pretty much funds everything else. If it wasn't for me working as a real estate agent, I wouldn't have the money to invest in real estate. I wouldn't have the money to be able to go and make YouTube videos for fun because it's something I enjoy doing. If it wasn't for that, I wouldn't have all of these other things.

So everything else that you see is really a result of me working as a real estate agent. So in terms of working as a real estate agent, let me break it down a little bit further. In 2017, I had 19 total transactions for the year. That's broken down from 11 sales and 8 leases, and the total sales volume of that was 21 million eight hundred and thirty-eight thousand and one hundred dollars.

Now, in terms of me working as a real estate agent, that business isn't so much structured around me trying to sell as many homes as possible and going out there trying to hustle every single day for new business. Instead, it's really serviced around providing my existing clients and their referrals the best service possible. It's really focused around fewer, higher-priced listings within my current clientele base.

Now, keep in mind that income is gross income; that's before other miscellaneous realtor expenses and other things that come up with that. And that's also before taxes, and California has such a delightful tax rate that I am happy to pay. And that's pretty much how I've structured my business working as a real estate agent.

Now, I didn't intentionally set out to do it this way. In the very beginning, when I started my career, I would work with absolutely everybody possible. I would do anything I could to pick up new business. But as I continued on the career, I realized that people would use me over and over and over again when it came time for them to buy something or sell something.

I also noticed that they would refer me a lot of other business, and it was at this time that I realized that there's a huge potential here to service my existing clientele and their referrals and cut back on some of the other things that I was spending my time on. That essentially gave me more free time to focus on the things I really enjoyed doing, and meanwhile, giving my current clients and their referrals better one-on-one service just because I wasn't running around like a chicken with my head cut off all the time.

I can really focus on the people that I really enjoyed working with the most, and almost all of the clients I have today were pretty much an origination from business that I did in the very beginning of my career working in leasing. I would help people find rentals, and even though there was pretty much no money in it— I mean very little money to the point that I would either break even on my time or sometimes make, you know, a really small amount— but it wasn't much.

These clients ended up buying stuff a few years later through me or referring me other leased clients that ended up buying something through me or ended up referring the other business that would straight up to buy something straight from me. So a lot of this was from that in the very beginning of my career doing things that at first didn't really pay off that took a few years to really cultivate, and then it paid off massively in the future.

The way I saw it back then is pretty much just like planting seeds that every lease I did, I figured three to five years later, they're gonna end up buying something. Every client that I had was basically like you plant a seed, and then you watch the seed grow into a tree that provides fruit. That is pretty much how I've structured my entire business.

It just ends up taking a lot of work and patience in the very beginning, but something that could be sustainable long term. And that's exactly how I was able to do nearly 22 million dollars in sales volume for 2017 without much prospecting, without working crazy hours, without driving myself crazy, while still being able to make two to three YouTube videos per week for you guys, still have a bit of a social life, still do everything else I do, and still increase my sales volume year after year in the process.

This is why I'm such a huge proponent of customer service and doing things with a long-term outlook that's sustainable long term, especially in real estate, especially anything in sales. It has to benefit the other person more than it benefits you. You have to put the other person first before yourself, especially in real estate. You can't just go and sell someone a house just because it's a quick commission and you get them something, and you push them in something that they're not gonna be happy with.

Because trust me, they're not gonna be happy with it. They're never gonna use you again; they're never gonna trust you again. The real benefit for you as an agent, or really in anything, is having repeat and referral business because that one person could lead to ten different sales. It's gonna benefit you way more than if you just make one quick sale, leave a bad impression, and move on to the next one. It's not sustainable.

So now that that's out of the way, my second source of income is the net rental income I get from the rental properties that I have. Now right now, I have seven tenants. Now, keep in mind for 2017, my rental income was about 30% lower for half of the year because it was in the process of buying a duplex. Now it's a little bit higher, so that's reflected also in the number that you see in the screenshot.

Now, it works out to be about forty-six hundred and fifty dollars per month or so. Now, I do have to mention this because this is probably one of my most common comments: “Of course you're making that. It's not that easy just to get the rental properties. It's not that easy just to get thirty-six hundred and fifty dollars per month.”

One of the things that I want to mention that many people fail to see is that that was six years' worth of saving and investing and being in real estate between 2011 and 2012. For me to get to that point, it's very easy just to see this point right now and be like, “That's a lot” or “I can't achieve that” or “That is not possible for me right now.” Believe me, that was not possible when I was 18 years old either.

It was not possible when I was 19 years old. This is something that happened with a ton of work involved in that, so I do want to throw that out there for anybody who thinks that this is just not possible or that they can't do it. Trust me, I was in the same position; I wasn't able to do it. Not to mention that was also me living basically off of like $5 Subway sandwiches to try to save as much money as possible to save up to end up buying something like this.

So just so you know, it didn't come easy; it didn't come quick. People try to discredit all the work that was put into that. Just keep in mind it was a lot of work, and it did take a lot of time. But I do want to throw that out there.

So like I said, that rental income tends to be about forty-six hundred and fifty dollars per month, maybe plus or minus a few hundred dollars depending on what expenses come up that month. This is also where I try to keep my expenses every single month as well. So basically, if I can keep my expenses at whatever the rental income produces, it allows me to save pretty much everything else I make so I could just end up reinvesting it.

The way I see it— even though I make way more money— there's no sense spending money on something if I don't absolutely have to. Also, by keeping my expenses pretty much what my rental income generates, it guarantees I'm never gonna run out of money if something ever happened to me working as a real estate agent or, you know, if all my other sources of income dried up for whatever reason.

I'm never really gonna have to worry about making more money because I kept my expenses and whatever the rental income produces. Now finally, my third source of income is the forced depreciation in equity when I renovate a property.

Now, because people got so triggered in my passive income video and got so upset when I counted paying down my mortgage as income, I'm not even gonna mention it in here. I'm not even counting paying down my mortgages as income, not even gonna mention that in equity. But instead, I'm going to focus on the forced appreciation of two of the properties that I bought because I bought them specifically to renovate to force appreciation in areas that I felt were really up-and-coming.

Now, the other three properties I have went up in value, but I feel like it's just, you know, we don't even need to count that, so let's exclude those. But we'll focus on the two that I bought most recently that I figured would go up the most in value. The first one was in an area that was close to West LA; it was somewhat close to Silicon Beach and all that's going on there, but a little bit further inland. I figured that was an area that was poised to go up in price because everything else around it was so expensive.

I was right, and it went up in value by about a hundred and fifty thousand dollars last year. The second place is the duplex I bought, and again, I purposely bought this because I believed it was another area that was gonna see a large jump in price. I was able to force a lot of appreciation by purposely buying something that was about eighty-five thousand dollars undervalued. By the time I bought it, I put money into it and forced more appreciation, and that also went up in value by about a hundred and fifty thousand dollars.

So this means that in 2017, I was able to make about three hundred thousand dollars in tax-free equity between those two properties. Now before people get triggered again and they're just like, “Graham, that's not income, that's appreciation! You can't do that,” keep in mind I bought these properties specifically because I felt they were going to go up in value. I bought them specifically because I expected this to happen.

I'm gonna be doing a cash-out refinance to pull out some of that extra money and then reinvest that. So to me, I count that as income because I purposely expected for this to happen, and this is what I was banking on. Plus, if I wanted to sell them and flip them for a profit, I could, but I would rather keep them as rentals, have them go up in value more, and just do a cash-out refinance and then invest the remaining money that I get.

This has always been my philosophy when it comes to real estate: to try to find something that's undervalued, buy it, renovate it, rent it out, keep it for a while, and then at the right time, you can do cash-out refinance, pull out some of that money, and then reinvest that into another property, do the same thing, cash-out refinance, and another property, do the same thing over and over and over again.

The whole process might be a little bit slow to start, but over time you're gonna start building it up. You're gonna get better at what you do, and from there, you could really build it up to something nice. So for the $480,000 that I made from the first two income sources, plus the $300,000 in appreciation, that comes out to about seven hundred and eighty thousand dollars in 2017, which works out to be about sixty-five thousand dollars per month in real estate.

Now, of course, there were some other little income sources that were included in that screenshot, but I'm not about to go through a year's worth of my expenses trying to break it down exactly what came where. It doesn't really matter; it's not that significant. But you get the idea, and I'm sharing that number just so you get the general idea of what that was like versus the appreciation that I made.

So anyway, from that, here are a few takeaways from this. The first one is that in any business, customer service is so important, and do it for the long run. Don't have a short-term outlook on something. Now obviously, if there's an opportunity for you, if it's short-lived, I'd say go for it. But don't do it at the expense of your future business. Don't do it at the expense of your clients or your customers.

If there's something you can do long term, I love it. If there's something where you have a short-term opportunity where only something is good for maybe a year or two, like, let's say a fidget spinner, I'm not saying don't do fidget spinners because it's not long-term. But don't sacrifice your clients and piss off your customers just because you want a really quick sale. Instead, you want to build as strong of a business as you can with whatever you're doing, and oftentimes that comes with amazing customer service— putting the other person before you and really building something that's truly sustainable.

This is exactly what I've done when it comes to real estate. Also, it doesn't happen overnight, so don't be discouraged if it doesn't happen in the first year or two years. Again, this is something that takes a very long time to cultivate, so be patient with it.

The next takeaway from this is to save as much as you can. You could see I make way more money than what I end up spending. It doesn't matter if you're making fifty thousand dollars per year or five hundred thousand dollars per year. What really matters at the end of the day is how much you can save. Even though it's way less sexy to be frugal and saving money than it is to be ballin’ so hard— bottle service all the time, Rolexes, Easys, Lambos, Ferraris, and all that fun stuff— that's great.

But at the same time, you're gonna thank yourself in the future if you end up saving money. It also just gives you the option in the future if you decide you want to ball really hard by Lambos, Ferraris, Rolexes, and all that great stuff. You have the option to do that. Also, once you save that money, invest it and invest it consistently.

At some point, I would love for the rental income I make to match what I can make as a real estate agent. Now, that's a huge lofty goal, but at some point in the future, I feel like that's a realistic possibility if I continue on the path of saving and investing as much as I can. That $300,000 I made would not have been possible if I didn't save up the money to invest in real estate.

If I didn't save up the money to renovate real estate so I can force that appreciation and buy in areas that I really believed in, that wouldn't have been possible. And finally, to end this, it's so important to diversify your income and not just rely on one source of income. For instance, if for whatever reason something happens to me working as a real estate agent, I still have a rental income; I still have income from owning stocks; I still have YouTube income. I can still do other things to make money.

You could do the same thing. You don't have to rely on just one source of income. In fact, I think you can end up making a lot more money by relying on more than one source of income because chances are the other sources of income will be a little bit more passive, won't require as much of your time, and can scale a lot easier than what you can do with your own time.

So with that said, I really hope you guys enjoy this, and I hope you guys can appreciate the openness and transparency of this. Because when I watch videos like this, I like to see other people being transparent. I like to see them being open about it, and I really like to see what's worked for them. Personally, I find that motivating and inspiring for my own self.

So I hope this video has the same effect. If it doesn't, I've just failed, but I hope I didn't fail. Let me know down below, you guys, in the comment section if I failed at this or not. So as always, you guys, thank you so much for watching. If you've enjoyed this video, all I ask, if you guys are open to it, if you're not already subscribed, make sure to smash that subscribe button.

Also, if you are subscribed and you enjoy the video and you want to see more like this, make sure to smash that like button as well. Also, feel free to add me on Snapchat and Instagram. I post pretty much daily, so if you want to be a part of it there, feel free to. I'd be there.

Finally, if you guys want to be a part of the private Facebook group, I set up a Facebook group for people who want to talk about real estate investing and real estate working as a real estate agent. It's primarily based on real estate, but we talk about other little subjects here and there.

It's an amazing community; we have over a thousand members right now. Everyone is super active, very supportive; everyone's answering each other’s questions. It's pretty cool. If you want to be a part of it, the link to that is in the description. Highly recommend you guys join that; it's totally free.

So that's it, you guys. Thank you so much for watching again. I hope you enjoyed this, and until next time.