From Zero to $8,000/Month Cash Flow in Just 2 Years (While Working a W2)

0:00Hey, everyone. Dave here. Happy holidays from all of us here at BiggerPockets. To wrap up 2025, we're sharing a few of our favorite episodes from across the BiggerPockets network this year. Today, it's an investor story from Real Estate Rookie that was originally published back in April. So you can enjoy this episode. It's Ashley Kerr and Tony Robinson speaking with investor Luke Tetreault, and I'll be back with new episodes of the BiggerPockets podcast starting January 2nd.

0:32This is the Real Estate Rookie Podcast, and I'm Ashley Kerr. And I'm Tony J. Robinson. And let's give a big, warm welcome to Luke. Luke, thank you for joining us today, brother. Thank you, guys. I appreciate it. So, Luke, you work as a welder for your full-time job, but you've told us you don't love your job, per se. So, how did you land on real estate for your next steps for financial freedom? Well, I think it kind of started with it was a little bit more than a dislike of my job. I found myself pretty, pretty miserable, just kind of disappointed in myself how I kind of ended up where I was at in life.

1:09I always felt like I should be doing something a lot bigger, a lot more. And I just never felt like I quite fit in with the guys I was working with, you know, the long 60, 80 hours a week we were working. and you know before I knew it I was 25 years old and I'm like I started welding straight out of high school I didn't go to college um just went kind of straight to work and I just felt like my life just kind of I snapped and all of a sudden all of my younger years are over and I'm just not really getting anywhere um so that's kind of how I kind of started thinking outside of the box getting out, what am I going to do?

1:47And real estate kind of fell into my lap because I had one mentor in my life and it was my best friend growing up's father. He was a custom home builder. He had a few single family rentals and it was just kind of always topic of conversation. I can remember when we were younger, just he was going to pick up rent or he was going to fix a house. I don't think I really took much to it. When we were in high school, I was 18, You know, our mind was on some other things. And but I think that kind of ingrained somewhere in my mind. You know, I always kind of knew I could fall back on that. So I think once I got to almost a breaking point of where I needed to make a change, you know, I kind of I called him up.

2:30I we had a quick phone call and I was like, yeah, let's now or never. Let's just try it. I'll find a deal. and I kind of made an agreement with him where he'd essentially be my first private money guy. And I ended up finding the first deal. It kind of all just snowballed from there. I want you to take us through your first deal, Luke, because I'm told that you found your first real estate deal on Facebook Marketplace, which is almost the quote of like finding a good deal on Craigslist, right? So walk us through how you found this deal. It gets even better than that because the top off the fact that it was off Facebook marketplace, I sent my now fiance to go walk it because I work a lot.

3:13So it's hard for me to be free during the day. And she's never done one construction job. She's never bought a house before. She has zero real estate experience. So she walked it. She's like, oh, I guess it looks all right. And I negotiated with him over Facebook Messenger because they didn't want to take a phone call. and I bought it sight unseen to kind of make things a little more interesting. And to not even talk to the person either that they want to take a phone call. Oh, my God. So I guess let me just ask, like, Luke, how did you not at any point feel that this might have been a scam given that Facebook Marketplace didn't want to talk on the phone?

3:51Were you worried at all about that? Honestly, I had like 20 mutual friends with them. So to me, that was a real person. So I didn't know him personally, but I was like, you know, it's got to be it's got to be legit. And she showed up. They were there when she was there and they walked through it. There was a tenant in there. So she was like her first experience of tenants. She's walking over all their stuff. They're kind of like walking them through the homeowner. She said it was just wild. And yeah, we decided to go through with it. So let me ask you this for like your first steps as, OK, you guys negotiate through Messenger.

4:28you have a deal. What's the next thing that happened? Did you hire an attorney? What are those next crucial steps to actually close on the property? Luckily, I kind of really leaned on my mentor there because he's been in real estate for 30 years. And so as soon as we agreed on a price, I just kind of went to him and he sent me to his attorney. They drew up all the paperwork. I didn't know what I was looking at. I barely even read the contract, if I'm being totally honest. And we just bought it. That was kind of how it was. I don't know if it was ignorant, me being naive or just ready to go. I don't know.

5:12But luckily, it worked out. And Luke, obviously, you're in a unique position because you had this mentor, someone who had a lot of experience in real estate. And for a lot of the rookies that are listening, you may not have someone like Lucat that can kind of hold your hand and guide you through this process in real life right next to you, but there is a way to kind of create your own board of mentors. And I think a lot of it starts with building the right team to support you. So for me, the folks that really helped me early on were my agents and my lender, and they were kind of my conduit to introduce me to the other people that I needed to meet.

5:48So for the Rickies that are listening, use the BiggerPockets agent finder, use the BiggerPockets lender finder to get connected with folks in your specific markets that are already working with real estate investors and can hold your hand to say, hey, you found this amazing deal, Luke. Here's who you need to go talk to next. So just trying to make sure that for the Rickies that are listening, you understand what those options are for you as well. So Luke, you find this deal. I guess, give us the numbers on it. What did you end up buying it for? And how did you know that it was actually a good deal?

6:19So they had it listed for like 85 grand, I think. And after, I mean, I really just kind of took it upon myself to comp a property. So I went on Redfin and all the solds and I was kind of doing the whole jebang. And I figured it'd probably be worth right around 120, 130. And it didn't need much work for what it was, I mean, from the pictures I saw. So So I figured my original plan was I was going to be the one to fix it up along with my mom. She helps us do stuff and my fiance. So I figured we could fix it up pretty cheap. I budgeted for$20 ,000. And I was like, you know, after kind of listening to your guys' podcast and to some other people, I was like, you know, we could refi out and then move on to the next one.

7:11And that's kind of how it went. We ended up putting a little over 20 grand into it. And we got it rented. I took it to the bank and they appraised it at like 135, 133, somewhere in there. And I pulled out as much as I could. I paid him off. We profited a little, took home a little less than 20 grand. And we were off to the races, I guess you'd say. That's awesome. What a killer first deal. Yeah. Yeah, it was at the time I didn't know that because I had done so little research and stuff. But now kind of where I'm at now, it's yeah, it was a pretty good one. So with that property, you ended up renting it out.

7:50What was the rents? What was the cash flow? Yeah, so we ended up now it's rented for like$1 ,350 and it cash flows about$400 a month. That's awesome. Yeah, yeah. With no money into the deal. You pulled all your money back out. Yeah, yeah. It worked out great. This might be one of the best first deals, Luke, that we've heard on the podcast. You found it in a very unconventional way, messaging someone on Facebook. You had a private money lender line up the whole thing. You estimated 20K in rehab. You actually spent 20K in rehab, which isn't normal. You refinanced, pulled cash out, and you're still cash flowing several hundred dollars per month.

8:26That is amazing. Looking back now, it is pretty funny that it all worked out that way. Luke, I have a question about your friend's dad being the private money lender. Does your friend invest at all, too? Or is this just something that you've done? And I guess why, if your friend hasn't, why hasn't he with his dad's help? No, he does not, actually. And I don't know why. He's, me and him kind of, as, you know, once high school hit, me and him kind of went two different ways. He was a great lacrosse player. He actually won a couple of national championships. Unfortunately, it came from a little different family, and I went right to work after high school.

9:06So I think we just kind of had different mindsets. I think he's kind of back in town now, and I'm sure he'll eventually get into it. But I also kind of – his dad helped me. I mean, to this day, I love him, and I call him my dad. But he built his portfolio brick by brick, cash, save up cash for the next house, like no banks involved, no nothing. So when I started kind of going this route, it quickly turned into him calling me crazy. So that was the one and only deal we've ever done together. I just find it interesting because my story started out very similar where I started working for my childhood friend's father as helping him with his real estate as a property manager.

9:53And I, you know, he was my first mentor, but my first deal, I actually partnered with his son. So my friend growing up and we did our first deal together and kind of my pitch was like, look what your dad is doing. We should do that. We're going to take a real quick break, but when we come back, Luke, I want to hear more about your journey and how you were able to scale so quickly to 35 units in two years. We'll be right back. As a real estate investor, the last thing I want to do or have time for is play accountant, banker, and debt collector. But that's what I was doing every weekend, flipping between a bunch of apps, bank statements, and receipts, trying to sort it all out by property and figure out who's late on rent.

10:37Then I found Baselane, and it takes all of that off my plate. It's BiggerPocket's official banking platform that automatically sorts my transactions, matches receipts, and collects rent for every property. My tax prep is done, and my weekends are mine again. Plus, I'm saving a ton of money on banking fees and apps that I don't need anymore. Get a$100 bonus when you sign up today at baselane.com slash BP. The Cashflow Roadshow is back. me, Henry, and other BiggerPockets personalities are coming to the Texas area from January 13th to 16th. We're going to be in Dallas. We're going to be in Austin.

11:15We're going to Houston, and we have a whole slate of events. We're definitely going to have meetups. We're doing our first ever live podcast recording of the BiggerPockets podcast. And we're also doing our first ever one day workshop where Henry and I and other experts are going to be giving you hands-on advice on your personalized strategy. So if you want to join us, which I hope you will, go to biggerpockets.com slash Texas. You can get all the information and tickets there. I have an uncomfortable question for you. If your rent collection dropped to 80 % next month, how long would your cash flow hold up?

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15:36Go to costsegregation.com and use code TAXDEADLINE to get 10 % off your first report. Don't overpay the IRS. Head to costsegregation.com before April 15th. Okay, let's get back into the show with Luke. So Luke, you've had your first successful BRRRR that you completed. What is the next move for you? What did the next couple of deals look like? We kind of just kept the ball rolling with the next one. I found, honest to God, another house off Facebook Marketplace. What market are you in, Luke? We didn't mention that. What market are you in? I'm in a small market outside like Rochester, Syracuse area of New York.

16:14kind of in a bunch of, we've kind of stuck to the smaller towns. And I don't know if that plays a difference, but I've bought quite a few deals off Facebook marketplace. We kind of went, walked it, same deal. It was disgusting. So this was a lot different where we were going to be getting into some real rehab on this one. And I bought it for 40 grand. We put another 40 into it. And at the end of it, it ended up appraising for like$145 ,000. So that was another great one. But it was a lot of learning lessons along starting to work with contractors because after that first deal, I didn't really mention, but halfway through it is when I started kind of building some relationships with contractors, with guys that do stuff because I got about a month in to me doing the work after I work.

17:05And usually I don't get out. We usually start working around 5 a.m. I work till 5, 6 o 'clock at night. So by the time I get over there, it's 7. And actually, productivity-wise, you're probably only getting an hour and a half of work done a night. And after about a month of that, I sat down with my fiance, and I'm like, this isn't going to work. This isn't scalable. This isn't repeatable. I mean, it's just... And I'm miserable. It sucks. and so we started finding people so then they kind of finished up that first one for us and then we kind of rolled them into this next one and immediately that didn't work out so I was on the hunt for contractors I found some more they came in and we ended up doing the property pretty decent they weren't the best to work with but it was kind of one of those things where I couldn't be too picky because we had the we had the house we had to get it done and so but yeah we ended up getting it done.

18:01We rented it out to an attorney and that, come to find out, cash flow a good$40 a month. When I ran my numbers, those are not the numbers I budgeted for. I thought I was going to be like the other one around 300, 400 bucks a month. And I had made some mistakes. I missed a couple. This was a different town and taxes were way higher for whatever reason. And I just, I skipped it, honestly. It was just me not kind of doing my due diligence. So that was kind of an eye opener to where we got it running. I was pumped. It was an attorney. She was great. And then we started kind of paying everything. And after like a few months, I'm like, this thing is, we ended up turning that one into an Airbnb now, actually.

18:48Interesting. So you guys pivoted the strategy a little bit. And since you made that transition, what has the cashflow looked like on that one? That one on average does like a thousand bucks a month. Yeah, that's amazing. All right. So to take it from 40 to a thousand. What a drastic change in cash flow by make transitioning that set of strategy. How much more did you have to put into the property to furnish it and things like that? Not much. I mean, we spent we only spent like five grand on getting it's a small little two bedroom. So we kind of we definitely went the cheap route. But I mean, it looks great and it does really well in the area.

19:23It's the number one Airbnb. You said something that was pretty amazing. So we got to pause in this, Luke, right? Because you said that you were netting$40 per month as a long term. You transitioned to short term and it went from$40 to$1 ,000, right? So that's an additional$960. I'm breaking up my calculator here. That's an extra$960 per month in profits, right? So 960 over 12 months is$11 ,520. You said the investment to get that additional revenue is only 5 ,000. So if we take our profit of$11 ,520, divide that by our investment of 5 ,000, we get a cash-on-cash return of 230%. The reason why I point that out is because there are a lot of people who are listening that already have properties that, much like yours, aren't meeting their initial projections.

20:17but instead of focusing on buying the next deal, sometimes you can get a much better return by reinvesting into the properties that you already own. And that is an amazing proof of concept because you invested 5 ,000 bucks and got a 230 % return. Could you have put that money into a different deal and gotten a 230 % return? Probably not. But going back to your story, Lou, because I think it's amazing, I just wanna make sure I have your stats right. 35 rentals, 13 flips, 8K monthly cashflow in two years. It's not entirely correct because we have a few things that are under contract to sell and buy, but it's right in there, yeah.

20:57Generally speaking, right? Yeah, yeah. So I think the biggest thing is, I can't even wrap my head around that level of activity in such a short timeframe. So how were you able to scale so quickly? What was kind of like the secret sauce that allowed you to move at such a rapid pace? I think it was a mixture of just my mindset, mentality, and kind of really reflecting on the deals we've done and kind of looking at those, how we did them and how can we kind of do them again. So I was just kind of going back to where we originally talked and where I was in life. I just, you know, I was ready to get out of it.

21:36And I'm the type of person that once I kind of reach that point, I don't care. I will go and I'll make it work. So I kind of had that mentality. And then once I did the first deal with my buddy's dad there, I learned that that was an option. And then obviously exploring all the forums and YouTube and podcasts and stuff, learning about private money, different ways to get money. um i actually went out and joined our local country club to try and network and that's where i found a couple of guys that i do all my deals with now what a great idea like i know our like local country club i mean it's on the sticks but that's like it's like a hundred dollars a year for a social membership if you don't play golf and you just want to go and be a social member like what a great investment that was kind of where our head was and that was why we joined i I like to go off.

22:33So, but we, I didn't need to, you know, necessarily join the nicest place in town, but me and my fiance kind of talked about it and we figured it'd be, it would probably be good for business. And it, it definitely has been. Luke, let me ask, right? So you joined the country club first. What was the cost? It's like 3 ,500 bucks a year. Okay. So not a small expense, but definitely not a major expense either. But that's what somebody would pay on a mastermind. Yeah, exactly. Or even more than that in a lot of situations, right? So$3 ,500 for the year. You join. You're a member now. How do you go from I signed up to getting to the point where the folks who are in this country club are actually lending you money?

23:14Because, like, are you just going in there handing out your business cards and I'm Luke, give me your money. I'm Luke, give me your money. Like, what is that? What are the actual conversations look like? Well, so luckily for me, I kind of have a foot in the door because I'm very good at golf. so when I go and sign up for like leagues or tournaments everybody wants to be on my team and that's not cocky at all it's just no no no no I love the honesty of it just the reality of it yeah it would be the literal opposite for me like no one would want me on their team if we were golfing because I am terrible so I'm glad you had that working for you yeah so and that's kind of how um I've met so many people because I would just get I started to get random text messages Just like, hey, you know, there's a tournament going on next Friday.

23:58Would you want to go? So because of that, I've just met like the biggest roofer in our town. I know him. I have a cell phone number now. So he does all of our roofs. I met a guy who owns a couple big fence companies. So they do our fence. I mean, like just all these relationships that have come of it. It's just it's it's worked out great. Tony's literally looking up golf lessons right now. Not golf lessons, but I'm looking up our local country club right now to see like I've never even looked into it before. But how cool to take something that you enjoy doing, that you love doing, and turning it in a way to network and to make those connections.

24:36That's just kind of what I did. Whenever we play, I just would make a point of talking about what I had going on. And I've learned that guys with money, everyone kind of thinks the same. Everyone's trying to make money with money. So they hear of a young kid who's hungry, who's doing deals. they're not afraid to throw them 100 grand. And you're good at golf, so you must be press ready. Yeah, of course. I guess, Luke, one final question on that piece. Was it a very direct ask on your part after you had built these relationships to go to some of these folks and say, hey, you know, I'm in real estate.

25:10I've got this deal. Let me know if you're interested. Or was it more, I guess, kind of the inverse where they were like, hey, Luke, if you ever have anything, let us know. I work with three main guys now and two of them came to me. And then the first guy, I actually printed out the entire deal. I brought it to his office where he works. And we kind of sat down and went over all the numbers. And I kind of sold him on the deal. And since then, it's been a lot easier now that I have stuff going on and kind of people know what I'm doing. And that was like the biggest thing I preached to anybody I talked to was I wouldn't ask for any money that I couldn't pay you back, whether this house burned up in flames.

25:52And I truly meant that and I truly would never borrow money unless I had a way of getting them paid off in other deals or in other equity lines I have. So being very open and honest about numbers and kind of where I'm at. And then in terms of structuring these deals with the various partners, was it all private money? Were there equity partnerships? Again, how are you actually structuring the relationships on these different deals? So we do a very basic, depending on who I work with, it's either 10 % to 12%. And it's just a flat 10 % to 12 % interest, whether I have the money out for a month or a year.

26:27And it's a year, I always cap it at a year. So that's how I've done every deal. I haven't done any equity positions yet. I'm looking at some bigger deals that we're trying to possibly talk about that. But as far as everything I've done with them, it's kind of been smaller stuff where we buy it, we go in, we fix it up, either sell it or refi them out and get them out of it pretty quick. Now, you mentioned some bigger deals and you've got your rentals, you've got the flips that you've done. So what are these bigger deals that you're looking at? Obviously, I just closed on a 18-unit mobile home park.