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This sounds interesting, but does managing and keeping up 26 rental units really count as "passive income"? It sounds kind of like a nightmare to me, unless you've completely outsourced that part to a property maintenance company. I guess the question is: how much time, or alternatively, what fraction of the income, goes to running it?

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Completely outsource. I answer maybe 2-3 emails a month and say "approve."

I kid you not.

So it sounds like you pay someone to manage your properties? How were you able to find a good trustworthy people? What does it do to your profits?

Also, how do you deal with major expenses, like if a furnace needs to be replaced, or roof damage? Do you maintain a rainy day fund for this? What kind of average expenses do you see for your properties over time?

Yes. Vetting a good property management company is difficult. I've fired more than a few.

But, now I have good managers in place.

Typically, you can expect 10% of rents for management fee--well worth paying.

You should factor this in when considering a property.

For major expenses, I have some reserves and I figure a 10-20% buffer again off of the rent of the property.

This covers the average expenses over time.

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