$100K/Year Passive Income with Cheap, Small, Repeatable Rentals

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Jun 9, 2025

Nathan Nicholson, an investor from Louisville, Kentucky, transformed his financial future with a strategic approach to rental properties, amassing 22 homes. He advocates for investing in small, affordable rentals, perfect for beginners, showcasing his 'tortoise approach' to wealth building. Discover why cashing out a 401(k) for properties can be worthwhile, and learn about effective property management to enhance profitability. With recent insights from the shifting real estate market, Nathan shares the importance of cautious leveraging and reinvesting for long-term success.

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ANECDOTE

Cashing Out 401k for First Deal

Nathan Nicholson cashed out his 401k to buy his first rental property for $32,000 cash.
This house became his best deal and foundation for building his portfolio.

ADVICE

Buy Small to Reduce Risks

Focus on buying small footprint houses under 1,000 square feet to minimize repair and rehab costs.
Smaller homes cost less to maintain and provide safer, steady cash flow.

ADVICE

Snowball Cash Flow to Grow Portfolio

Reinvest all rental cash flow back into new properties to grow your portfolio exponentially.
Buy a property more frequently as your income snowball increases over years.

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This investor is making $100,000 per year with small, affordable, repeatable rental properties. He started investing years ago but recently bought another home-run rental for just $87,000, which will continue to boost his passive income. His slow, steady “tortoise” approach is one that anyone (especially beginners) can use in 2025 to build wealth and massive passive income through rental property investing. How do you do it? He’s sharing his blueprint.

Nathan Nicholson woke up one day in his 30s to realize that his bank account had only $32,000 in it. While by no means is $32,000 a small sum, as a top producer in the mortgage business, he expected to have much more—something needed to change. After watching clients close (and make it rich) on rentals, he decided to give it a shot.

But instead of going for the biggest house his money could buy, he opted for a small, affordable property where less could go wrong. It was a good move and one worth repeating. Fast forward over a decade later, Nathan has 22 properties, 10 of which are paid off, with six-figure cash flow coming in every year. He scaled smart (and safely) using his “tortoise approach” to investing—an approach you can use, too!

In This Episode We Cover

Why buying small (less than 1,000 square feet!) rentals is a smart move for beginners

Taking the “tortoise approach” to wealth so you safely get to early retirement

Cashing out your 401(k) for rentals? Why Nathan says it’s worth it

One quick calculation (that beats the 1% rule) every investor should use

Why Nathan is buying even more as price cuts hit many major housing markets

And So Much More!

Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1132

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