He’s Making Over $100K/Year Cash Flow with Small, Affordable Rental Properties

**Dave Meyer** (0:00)
When Nathan Nicholson cashed in his 401k to start buying real estate, people told him he would fail. They said he'd lose everything. But today, he owns 23 rental properties, generating more than $100,000 in annual cash flow. Nathan was 33 and the top salesperson at his company. But years of top performance still left him with only $30,000 in his savings account, hardly enough to dream about retirement.
So, Nathan liquidated his retirement fund, and he started buying rental properties in his hometown of Louisville, Kentucky. They were little brick houses, most of them under $100,000.
That was 13 years ago. Now Nathan generates six figures every year after all his bills are paid, and his financial future is secure. It's a simple formula. Buy the smallest house possible, fix it up, and watch the monthly rent checks roll in. Nathan's approach is so boring that he actually calls himself the tortoise. But don't let that confuse you. This strategy absolutely works. And today, he's sharing his exact repeatable formula. The one rule he never breaks, how he's managed to pay off 10 properties even as he scales, and how he's pivoted his strategy for 2026
What's up, everyone? I'm Dave Meyer, Chief Investment Officer at BiggerPockets. Thank you all for being here. We got a great show for you today. We're bringing on Nathan Nicholson, who is one of the most popular BiggerPockets guests in 2025 You can hear his full story by going back and listening to episode 1132 from last June. But today, he's back with an update, what he's been up to, how he's pivoting to make the most of current market conditions. So let's bring on Nathan.
Nathan, welcome back to the BiggerPockets Podcast. Great to have you here.

**Nathan Nicholson** (1:59)
Yeah, thank you for having me.

**Dave Meyer** (2:00)
Some of our audience may not have listened to your first appearance here on the show. So maybe just give us a little bit of background about yourself and your investing career.

**Nathan Nicholson** (2:08)
Yeah, my investing career, I mean, from the prior podcast, it was how to basically make money with $100,000 or less rentals, in all honesty with you. So realistically, my beginnings kind of happened with me really just realizing I have to do something different at the age of 33, been a top salesperson, and only having about 30 grand in my checking account. I go, man, if I'm really good at sales, why do I only got $30,000 in my checking account? And going, what can I do?
And I had a couple of friends of mine basically talk about real estate investing and what they were doing. And so I sold my 401k off, took every penny I had, had a dream to say the least, and put all my money into real estate at that time and just kind of been doing it ever since. So that's been about 13 to 14 years at this point.

**Dave Meyer** (2:52)
Tell us a little bit about what your portfolio looks like here today.

**Nathan Nicholson** (2:56)
Yeah, I mean, from the last time we spoke, it's grown a little bit. I'm sitting at 23 properties, all single family residents at this point, and about to pay off my 11th house, so I've got 10 free and clear.

**Dave Meyer** (3:07)
Oh, wow.

**Nathan Nicholson** (3:08)
And I just literally sent the wire on Friday, so I'm paying off a little two bedroom house that will net me about $600 a month.
But beyond that, I mean, as far as my breakdown, my rents have gone up, my total cash flow has been going up because I've been trying to surefy my property business, but my rents are at about $311,000 right now. Total cash flow, that's total in is $143,000. And my true net, which is what I go by, I don't say cash flow, I'll go by true net. True net is $112,000 right now. And I think the last time we spoke, it was at about $100,000.

**Dave Meyer** (3:39)
Is it fair to say then, you re-invest 100% of your cash flow back into some sort of business, even if it's not for acquisition of your next rental?

**Nathan Nicholson** (3:49)
100%, yeah.

**Dave Meyer** (3:51)
Is that hard for you? Do you ever get tempted to just live off of it or you're still in growth mode?

**Nathan Nicholson** (3:58)
I mean, it's, you know, I'm the tortoise investor, right? I'm very conservative. So to your point, I've thought about it. I'm 46 years old. I would love to retire at 55
I mean, I could probably retire now, but at the same time, it's one of those things where it's like, I haven't really accomplished really what I want to do yet. I think most investors will tell you the same thing. It's like, I have not reached that spot and that spot is coming. But yes, that's what I'm going towards. But at 55, I think I'll be there. I really want to be at 30 doors and have about 20 of them paid off before I really go full on real estate. And that's at about 55 for me.