My monthly Extraordinary Lives series is one I truly enjoy, and I’m excited to share another insightful interview. Earlier in the series I spoke with JP Livingston, who retired with a net worth of over $2,000,000 at age 28. Today’s interview features Paula Pant, a 34-year-old real estate investor who owns seven rental units that last year grossed $125,000 and produced $43,000 in net income after expenses.
You may already know Paula from her informative blog Afford Anything. I’ve followed her work for a long time and was thrilled to have the chance to interview her.
In this interview you’ll learn:
- How Paula began investing in real estate.
- How she was able to acquire multiple rental properties.
- What criteria she uses when evaluating rentals.
- Which types of properties she prefers.
- How much time and capital it takes to get started.
- How she manages properties from a distance.
- About her worst tenant experience and how she handled it.
- The lifestyle sacrifices she made to reach financial independence.
This interview is full of practical, actionable advice for aspiring rental property investors.
Paula also offers a course called Your First Rental Property that teaches beginners how to locate, analyze, purchase, and manage their first rental. Enrollment opens periodically; check the course page to see whether it’s available when you’re ready to start.
Related content:
- How This 29 Year Old Is Building A Real Estate Empire
- How We Reached Financial Independence Using Airbnb & Real Estate
- How I Retired At Age 30 with $500,000
- 10 Best Books on Flipping Houses To Make Money
- How To Start Investing In Rental Property For Beginners
1. Tell me your story. Who are you and what do you do?
Today I split my time between travel and running an online business, and I consider myself financially independent—my investments provide a comfortable foundation. But that status came after a lot of deliberate choices and years of hustle.
I graduated college in 2005 and took my first job at $21,000 per year. By the time I left that role in 2008 I was earning $31,000—the most I ever made as a salaried employee. During those early years I freelanced on the side for magazines and websites, and eventually saved $25,000 to backpack around the world for two years while living on less than $1,000 per month.
When I returned to the U.S. in 2010 I moved away from the traditional 9-to-5 and focused on growing freelancing into a full-time business. Within roughly 18 months I was earning the equivalent of a six-figure income in my business and enjoying my first five-figure month.
Instead of increasing consumption, my husband and I chose to invest. At the time we paid $200 a month for rent each, sharing one bedroom in a three-bedroom apartment with several roommates. We lived frugally—driving an old car, buying inexpensive food from Costco, and avoiding unnecessary purchases. Over time we saved $26,000 and used that as a down payment on our first rental property, a triplex. We moved into one unit and kept renting to our roommates, so our housing costs were effectively zero. Within another year we saved $21,000 and bought a second rental property.
Fast forward to today: we own seven rental units that last year grossed $125,000 and netted $43,000 after expenses. I also run an online business that generates six-figure revenue annually.
2. How did you afford to purchase so many homes?
The short answer: extreme frugality combined with entrepreneurship. We deliberately lived cheaper than most people would tolerate, which enabled rapid savings. At the same time my freelance and online income escalated faster than a traditional salary would have, allowing us to accumulate capital more quickly. When you earn significantly and keep housing costs near zero, you can save and deploy funds toward property purchases at an accelerated rate.
3. What have been some of your favorite financing strategies?
I don’t love leverage for its own sake and I prefer paying cash when possible. My favorite financing approach is to buy properties inexpensive enough to pay for outright—typically homes priced at $50,000 or less. I’ve purchased two properties that way, and paying cash remains my preferred strategy. That said, I will use loans when appropriate; the key is buying deals where the math works.
4. How would you recommend finding good income-producing rentals? What do you look for in a rental?
Finding strong deals typically requires effort beyond browsing MLS listings on Zillow or Redfin. Many of the best investments are created rather than simply found on public sites. Strategies include driving neighborhoods to spot properties showing deferred maintenance, running public-record searches for absentee or out-of-state owners and sending targeted letters, or partnering with wholesalers who source off-market opportunities.
Another path is specializing in foreclosures and short sales, which is one method I’ve used. In short, deals rarely fall into your lap—you need to proactively search.
When evaluating a rental, I use a few core metrics. First, as a minimum screening rule I look for gross monthly rent to be at least 1% of the acquisition price (purchase price plus initial repair costs). This helps make apples-to-apples comparisons between properties that require different levels of repair.
Second, I examine the cap rate to understand the property’s income yield relative to its value. To calculate cap rate, estimate rental income at full occupancy, subtract vacancy allowance, add supplemental income (laundry, parking, pet fees), then subtract operating expenses such as maintenance, management, property taxes, and insurance. Do not include debt service (principal and interest) when calculating cap rate. The result—the net operating income divided by property value—gives you the cap rate, which helps compare the income potential across assets.
5. What types of properties do you invest in and why?
I focus on residential rental properties: single-family homes, duplexes, triplexes, and fourplexes. Properties with five or more units fall into the commercial category. Residential assets are often simpler to finance, buy, and insure, which makes them approachable for beginners. I don’t claim any asset class is universally superior; each has trade-offs. My advice is to specialize in one niche, learn it deeply, and become excellent in that area.
6. How much time and money should you expect to invest when getting started?
If you’re willing to invest where returns are compelling rather than restricting yourself to your hometown, you don’t need a large sum to begin. In many U.S. markets you can find decent single-family homes priced between $40,000 and $60,000. A 25% down payment on a $40,000 property is $10,000. Alternatively, if the property is in your area, an FHA loan might allow a 3.5% down payment—about $1,400 on a $40,000 home—provided you owner-occupy for a year first.
One caveat: don’t start until you have a solid emergency fund in place.
7. Do you buy turnkey properties or those that need work, and why?
I generally avoid turnkey companies; there are many red flags in that space. All of my properties have required significant work. I prefer buying fixer-uppers because the opportunity to purchase below after-repair value creates forced appreciation in addition to ongoing rental income. That said, buying rent-ready homes can also offer strong cash flow; it’s a matter of strategy and preference.
8. How do you manage rentals from another part of the country? What happens if repairs are needed or a tenant moves out?
Management is straightforward when you build a reliable team. If a repair is needed, the property manager calls a contractor; if I self-manage, I call the contractor myself. This is no different from any business operating remotely—many companies oversee locations in other states. With the right systems and trusted vendors you can manage properties from anywhere.
9. What challenges have you had with management companies and how have you handled them?
We once used a property manager who was sloppy: poor listing photos and low attention to detail. We replaced them with a better manager. My top recommendation: don’t penny-pinch on property management. Prioritize professionalism and competence over saving a percentage point or two in fees. I’d rather pay 10% to an excellent manager than 8% to someone mediocre.
10. Have you ever had a bad renter? How did you deal with them?
Yes. One tenant moved out and left the unit in terrible condition—holes in the walls and soiled carpets. We hired a contractor who assembled a crew to repair, repaint, and replace carpets within 24 hours. That’s the advantage of having a strong contractor and team: they handle restoration quickly and professionally.
11. What work is required from you to manage your real estate portfolio?
Once you hire an excellent property manager and a reliable contractor, day-to-day operations largely run without your constant involvement. Your role becomes oversight and decision-making rather than micromanaging every repair. The most time-consuming work is finding and underwriting deals. After that, systems and the team handle routine tasks.
12. What sacrifices did you make to reach this milestone?
My husband and I lived with roommates into our early 30s, which kept our personal housing costs at zero and accelerated savings. I drove an old car for many years. We prioritize low-cost activities like hiking and camping, travel using frequent flyer miles and favorable exchange rates, and mostly eat vegetarian food to reduce expenses. These choices helped us save and invest aggressively.
13. Do you have predictions for upcoming strong rental markets?
I don’t try to time or predict markets. The best approach is to buy when the numbers make sense today. Don’t speculate on future price changes—focus on current cash flow, cap rates, and fundamentals.
14. What’s the best way for someone to get started?
Read practical articles and listen to real estate podcast episodes that cover fundamentals. Decide on a specific state, city, neighborhood, or ZIP Code to target for your first property and begin your market research and underwriting there.
15. If you could start over, what would you do differently?
I would have outsourced more work sooner. I mistakenly believed doing tasks myself would boost profits, but that undervalues time. Outsourcing early frees you to focus on business growth—working on the business rather than in it.
16. What is your best tip for someone who wants to reach the same success?
There’s no single silver-bullet tip, but if I must pick one theme: focus on increasing your income rather than only cutting expenses. Frugality helps, but your capacity to earn more will have a far greater impact than trimming small expenses. Emphasize entrepreneurship, investing, and long-term thinking—this is a multi-year effort focused on meaningful progress over five to ten years.
Are you interested in getting into rental real estate? What other questions do you have for Paula?