B
rannon Potts' unorthodox approach to real estate investing has yielded a lucrative build-to-rent strategy, poised to catapult him into early retirement. By adhering to the '1% rule', he ensures his rental properties generate positive cash flow. This involves matching the monthly rent with at least 1% of the property's construction cost. Potts' meticulous approach has allowed him to design and build each of his 10 rentals, a niche strategy that's reaping significant financial rewards.

    As a seasoned investor, Potts is driven by conservative principles, insisting on properties yielding at least $200 in monthly cash flow per unit. Currently, he's exceeding this threshold with an average of $330 per month per door, translating to approximately $40,000 in annual passive income. His new builds require minimal maintenance, freeing up time for his real estate-related YouTube channel and family life.

    Potts' success hinges on a simple yet effective formula: determining the property's construction cost and researching local rental rates to ensure the 1% rule is met. This approach has been replicated by other investors, such as Atif Afzal in upstate New York, who applies the same principle when purchasing existing properties.

    As Potts continues to expand his portfolio, he's discovered that multi-unit properties tend to generate more revenue. To maximize returns, he encourages creative thinking, such as adding auxiliary income streams like ADUs or storage units. For instance, on a recent project, city regulations forced him to build a triplex instead of a fourplex, but he capitalized on the remaining space by constructing four storage units, which now yield an additional $220 in monthly revenue.

    Potts' long-term goal is to reach 20 doors, allowing him to step back from property management and focus on his family and YouTube channel. His build-to-rent strategy has proven to be a lucrative path to financial independence, and he's eager to continue refining his approach to optimize returns.