I Bought 30 Rental Units in 5 Years, EVEN with High Interest Rates

Jesse Walters, a real estate investor, shares his journey of scaling his portfolio from zero to approximately 30 rental units in just five years, despite challenging market conditions like rising interest rates and economic uncertainty. His strategy focuses on acquiring affordable housing and creating win-win scenarios for all parties involved. Walters began his real estate investing journey in 2021 with a 20% down, turnkey single-family home. Despite an increase in interest rates shortly after, he continued to acquire properties. In 2022, he purchased a value-add property, and in 2023, when rates were around 8%, he bought a fourplex that generated $3,000 per month in rent. His aggressive growth continued into 2024 with the acquisition of four houses for flipping and two rental properties. By 2025, he achieved a significant milestone by purchasing 11 rental units with $0 down, all of which are small, multi-family affordable housing options. His initial foray into real estate was in 2017, inspired by his wife's career as a real estate agent. After running a coffee business, they purchased their first rental in 2021 for $165,000 with 20% down. He self-managed the property, renting it out for $1,500 per month. In 2022, he became more involved with BiggerPockets, learning extensively and acquiring a second single-family rental for $130,000, investing an additional $15,000 in renovations. This property was rented for $1,500 per month. A significant turning point came in 2023 with the purchase of a fourplex in his hometown for $190,000. One unit was vacant, and he initially listed it for $700 per month, quickly realizing he had significantly underestimated the local demand. The high volume of inquiries indicated a substantial need for rentals in the area. While he honored the initial rent for the vacant unit, he gradually increased rents for other units as they became available, eventually reaching $3,000 per month across all four units after 18 months of renovations and tenant turnover. This experience highlighted a strong demand and limited supply in his hometown. Walters emphasizes the importance of relationships in sourcing deals. He initially connected with a lender who provided crucial guidance. His current deal-finding strategies include direct mailers, agent referrals, and online platforms. He has cultivated strong relationships with real estate agents who often refer him properties that require significant work and might be difficult to sell on the open market. He ensures these agents are compensated, including their commission, which fosters trust and encourages them to bring him more off-market opportunities. He believes in creating mutual benefit for all parties, including agents, tenants, and vendors. He employs a systematic approach to deal analysis, following a formula: Gross Rents minus 30% for expenses (taxes, insurance, mortgage). If the property breaks even or shows a slight positive cash flow after these deductions, he typically considers it a hold, especially if it's fully renovated with minimal ongoing work. He re-evaluates these properties after a few years, leveraging their equity if necessary. While he generally flips single-family homes and holds multi-family properties, this isn't a rigid rule. He emphasizes walking into equity on day one, which provides a safety net and multiple exit strategies. Walters shares a challenging flip experience from 2025. He purchased a ranch-style house for $265,000, budgeting $40,000 for renovations, primarily to finish the basement. However, the renovation costs escalated to $65,000, partly due to the market turning and a neighboring house not selling. He over-invested in finishes to make his property more appealing. The house sat on the market for four months, and after negotiations for a $10,000 deck repair and a needed roof replacement, his profit was reduced to a mere $600. This deal taught him the importance of accurate market analysis, especially during market shifts, and the need for higher-end finishes on higher-priced properties. He also learned the hard lesson of "fibbing on his own underwriting" to meet the seller's foreclosure deadline, which, combined with renovation underestimation, created a tight situation. Despite this setback, Walters is proud of his ability to learn from mistakes and pivot. He is currently undertaking a significant project: converting an 18-room motel in his hometown into a 10-unit (potentially 11-unit) apartment building. He purchased the motel for $325,000 and estimates a $300,000 renovation cost. The projected gross rents are over $9,000 per month, with a total project cost estimated between $600,000 and $700,000. He secured financing for this ambitious project with no money down by using a paid-off condo as collateral, a testament to his ability to build confidence with lenders by showcasing his track record and bringing in a reputable home builder as a partner. He plans to offer affordable one-bedroom ($850-$900 with utilities) and two-bedroom ($1050-$1100) units, which are competitive with existing market rates but offer improved quality and include utilities. This project aligns with his commitment to providing affordable housing and revitalizing the community. Walters also discusses his successful new construction strategy, where he partners with a builder. They acquire lots from the MLS, with Walters acting as the agent to reduce commission costs. The builder constructs the houses at cost, eliminating builder fees. Once completed, Walters lists and sells the properties on the MLS, again without taking a commission. The final profit is split 50/50 with the builder. This model has yielded profitable results, such as a recent project where a $52,000 lot and a $220,000 build resulted in a $330,000 sale price, leading to a $30,000 profit split. This approach simplifies the process for him, requiring minimal active involvement beyond signing documents. Currently, Walters' portfolio stands at under 30 doors, with an estimated value of just under $4 million. He is increasingly focusing on new construction projects and has also found success in flipping duplexes that don't cash flow well as rentals. He rents out one side of a duplex and sells the other vacant side, a strategy that has proven effective due to the high demand for duplexes. His investment strategy is evolving, with a greater emphasis on new development and a nuanced approach to duplex acquisitions.