Have Somebody Else Pay Your Mortgage

Have Somebody Else Pay Your Mortgage | The Kitti Sisters - 1

EP214: Have Somebody Else Pay Your Mortgage



Hi there!

We understand how daunting a multifamily property purchase can be. 

Even after the purchase, the monthly mortgage has got to be so high, right??

Well…actually no! 😋

That’s the beauty of owning multifamily apartments – the mortgage gets paid by other people, AKA the renters! 

This is truly one of the best things about multifamily apartment investing. 

Aaaand trust us. There are a LOT of great things about it. 

But this mortgage math? It just makes sense. 

We’re talking about having one building and one mortgage, but with tons of different income streams from multiple units! 👏

The result is never having to stress about the upcoming payments on even the largest income-producing properties. 

Because, as multifamily owners, we basically have other people paying the mortgage for us. 

Of course, there is some strategy involved in this exciting multifamily perk, but we’re about to break it all down for you in the episode! 🙌

Here’s to multifamily mortgage math making sense and saving money. 🥂

Palmy ➕Nancy
The Kitti Sisters


  • Dive into our strategy for letting somebody else pay a massive monthly mortgage on our properties.
  • Learn about smart investing in ‘A class’ multifamily apartments, ensuring steady cash flow and low delinquency, freeing you from financial burdens.
  • Discover how to turn hefty mortgages into profitable assets in our insightful episode. 💡

Have Somebody Else Pay Your Mortgage

🗓️ November 2023: $937,908 mortgage due. That’s not a typo.

That’s what we coughed up for our apartment properties’ mortgages.

Now, stick with us for some quick, eye-opening math.

✖️ Multiply that by 12. ✖️

We’re talking $11,254,896 a year.

Just sit with that number for a second.

You’re probably wondering why we’re not freaking out – that’s a mountain of cash, right?

Here’s the kicker: we’re not the ones paying it. 😌😌

Yep, you heard that right.

No catch, but there’s a whole lot of strategy behind this.

And we bet you’re thinking, “Come on, who’s actually footing this massive bill?”

In today’s episode, we’re diving deep.

We’re not just talking theory; we’re bringing a real-life case study to the table.

Fair warning there will be some math ➕➖🟰, but we promise we’ll try to make it as painless as possible.

Now before we begin we want to let you know the caveat is that we’re talking about income-producing properties here, we’re not talking about some stranger paying down your personal 🏡home.

We also need to clear the air on one critical distinction – the difference between mortgages on single-family rentals versus the multifamily beast we play with.

To explain this let’s use the analogy of ants. 🐜

Think about this: some ants can lug around 10 to 50 times their own weight.

Now, if you’re not wowed yet, let’s put it in human terms.

Picture a tiny 2-milligram ant hoisting a load 10 times heavier than itself.

That’s like a 180-pound person effortlessly hefting a full-sized cow over their shoulders.

Mind-blowing, right?

And you might think that’s nowhere near enough for an ant colony’s hefty food needs.

But here’s where it gets interesting.

💥 Multiply that by 100, 200, or 300 ants.

Suddenly, we’re talking about a whopping 6 kilograms!

Imagine this – that’s like hauling:

A hefty watermelon 🍉, the kind that barely fits in your fridge.

A whole sack of potatoes, enough for a family feast.

An array of pineapples, juicy and ripe.

A massive turkey, the star of any dinner table.

A large, family-sized bag of rice.

Or even several loaves of bread, enough for sandwiches all week.

Now, that’s a banquet fit for a queen (ant, that is).

And the best part?

If one little ant starts to flag, no worries.

It’s got a whole brigade of 299 buddies ready to step in and share the load.

This analogy helps explain the difference between single-family rentals vs multifamily rental mortgage payments.

With single-family rentals, it’s a straightforward game: one house, one tenant.

They pay rent, you pay the mortgage.

Simple, right?

You’d hope the rent’s more than the mortgage.

We’ve seen it go south, but let’s stay optimistic.

👉 Say, rent’s $2,000, mortgage $1,500 – you pocket the difference and pay the bank.

Sounds like clockwork ⏰, but here’s the twist: it hinges on one tenant. If they bail on paying, guess who’s coughing up the cash? You.

Now, flip the script to multifamily apartments.

We’re talking big league here – think 65 units and up. Our playground? 300+ unit monsters. 👻

Forget the staggering purchase price, that’s another story.

Here’s the clincher: Our risk isn’t tied to one tenant.

If a single rent check bounces, no sweat off our backs.

We’ve got an army of tenants.  😏😏

Our break-even isn’t a ‘one tenant makes or breaks its scenario.

We operate with a 50% economic vacancy buffer – meaning, even if half the tenants decide to play hide and seek with their rent, we’re still solid.

It’s all about economic occupancy, not just empty rooms.

This is where the big difference lies. In the single-family game, one family’s mishap is your emergency.

In our 🏢 multifamily world, a few non-payers?

Just a blip on the radar.

We’ve got a whole community backing us up.

Here’s another crucial strategy to ensure someone else covers your mortgage with ease: picking the right property. 🤓🤓

Our formula?

Aim for high-income areas. Why? Tenants there can easily afford the rent. This means steady profits for us, which go straight to covering the mortgage, ensuring a smooth cash flow and happy investors.

Our secret sauce?

We exclusively invest in ‘A class’ apartments. ⭐

These are modern, built in the 2000s or later. Plus, we have a golden rule: the median household income within a one-mile radius of our properties must be $100,000 or more.

When it comes to the rent-to-income ratio, we aim for a 3X benchmark.

For instance, if the rent is $2,000, we expect our tenants to have a net income of at least $6,000 per month. This ensures they can comfortably cover their rent without any hiccups.

And here’s the real kicker: In these ‘A class’ neighborhoods, our delinquency rates are incredibly low, often less than 1% per month. So, mortgage worries?

Virtually nonexistent, because our tenants are consistently reliable with their payments.

Alright, enough with the theory.

It’s time to do a Jerry Maguire and ‘show me the money.’ 🤟🤑

Let’s dive into a real-life example: a 200+unit beast we own in Dallas-Fort Worth.

We’ve been running this show for a few years, and we’re about to lay down the crucial numbers that spell success in this game.

Here’s the deal: when you’re eyeballing an apartment complex, whether you’re buying, operating, or thinking of investing, there are certain health indicators you gotta watch like a hawk.

Our playbook?

Simple. We don’t mess with anything below 90% occupancy.

We want properties that are already crushing it, not fixer-uppers that need a miracle. No heavy lifting, no risky flips. We’re in it for the steady climb, not the rollercoaster.

Let’s crunch some numbers. ⏬

You’ll see how we make it so that others are not just covering our mortgage, but also pumping cash flow into our pockets.

This isn’t just about covering that $900,000+ monthly mortgage. It’s about building an income engine.

What’s in it for them, the tenants?

Top-notch, affordable housing with a responsive, reliable management team. When they have a problem? We’re on it. This isn’t just a place for them to crash. It’s a home they’re proud of. And that makes us more than landlords; we’re partners in a win-win deal.

The tenants get quality living, and we get an asset that grows in value – all thanks to them. It’s not just about today’s cash flow; it’s about long-term growth, beating inflation, and increasing income.

That’s the hidden gem here. As the property’s value skyrockets, who wins? We do, along with our investors.

Alright, let’s zero back in on this Dallas-Fort Worth property. 🤠

Picture this: In November 2023, this powerhouse raked in $260,730.41 in rent.

But wait, there’s more. We’re not just sitting on rental income; we’ve got a whole other income stream.

This includes stuff like tech packages, utility reimbursements, insurance premiums, and carport rentals. That’s an extra $50,647.45 right there.

Add it up: $260,730.41 in rent, plus $50,647.45 in extras.

We’re talking a total operating income of a whopping $311,377.86.

Sure, there are expenses – staff, marketing, admin, property management fees, the works. This property? It clocked $48,363.32 in costs.

The big reveal here is $311,377.86 minus $48,363.32 leaves us with a net operating income of $263,014.54.

Circle that number.

It’s key.

Now, let’s talk about the other outflows – the non-operating expenses. We’re talking mortgage payments, the occasional paint job, and parking lot fixes. The heavy lifter here is the mortgage at $123,960.74.

But check out this ratio: $263,014 in net income against a $123,960 mortgage payment. See why we’re all in on these massive mortgages?

➡️ Here’s the Kitti Sisters spin: The mortgage cash isn’t coming from our wallets, not even from our LLC. 😘😘

It’s the tenants who are chipping in, paying down our mortgage while they enjoy their homes.

It’s the ultimate win-win.

Why do we love scooping up more large multifamily properties?


While we kick back, our mortgage is someone else’s worry.

We let a top-tier property management team handle the nitty-gritty. No fixing toilets, no midnight calls, no chasing rents. Our role? Strategic oversight.

And what do we get?

A steady stream of cash flow, juicy tax benefits, and an appreciating income-producing asset we can flip for double, or triple profits.

🔈 This, my friends, is the art of having others pay your mortgage. 🔈

Master this formula, and you’re not just playing the game; you’re rewriting the rules.

Now that you understand how to have somebody else pay your mortgage, tune into this episode so you can build your A-Team to get the job done.

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We're Palmy ➕ Nancy Kitti 〰️ The Kitti Sisters

A sister duo team obsessed with all things financial freedom, passive income, and apartment investing + apartment syndication, who turned a $2,000 bank account into a nine-figure empire.  Now, we're sharing with you the behind-the-scenes secrets of our wealth building strategy.

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