Dominic Kosteris has been working for most of his life.
“I was delivering newspapers when I was in eighth grade,” the 54-year-old high-school history teacher told Insider.
His paper route was in Chicago, where he’s lived since he was a toddler.
Kosteris’ parents emigrated from England to the States when he was 2 years old. They taught him the importance of keeping a good chunk of his paycheck, he said. “I’m pretty frugal. That’s a trait my parents passed down. They were World War 2 refugees and told stories about how they would have to ration their food.”
Today, Kosteris technically doesn’t have to work, thanks to the real-estate portfolio he’s built over the past 27 years. He owns 64 single-family homes, which Insider verified, including the one he lives in. Twenty-five of them are completely paid off.
His earnings fluctuate, but at the end of each month, after he pays his mortgages and other housing expenses, he profits up to $45,000, he said, adding: “That’s if I’m not reinvesting.” It’s significantly more than his teaching salary and more than enough for him and his family to live on, he added. Even so, he chooses to continue working his day job.
“I enjoy what I do,” said Kosteris, who’s been teaching for 31 years. “Also, if I retire now, they would tax the heck out of my pension.”
Living at home and working 2 jobs before buying his first home in 1996
Kosteris graduated debt-free from Chicago State University in 1991, and “like every good little Greek boy, I stayed at home with mom and dad,” he said.
Living with his parents allowed him to save most of his income — and for a couple of years, he had two incomes: his full-time education salary plus a part-time salary from the local grocery store he’d been working at since he was a teen.
“I was still working at the food store stocking fruits when I first started teaching, so I was able to save a lot of money,” said Kosteris.
He took those savings and bought a $53,000 two-bedroom townhouse that he financed with a three-year adjustable-rate mortgage and a 10% down payment.
It was something his mentor at the time encouraged him to do, he said: “There was a guy who lived in my neighborhood who I knew pretty well and he’d been buying and holding real estate. I figured I’d pick his brain. I just asked him question after question and he was very accommodating. I would go on ride-alongs with him to see tenants and to the Home Depot, and I thought, ‘I think I can do this.'”
Kosteris was 28 when he bought his first home and moved out of his parents’ place.
“I love my family, but opening the door and not waking anyone up — it felt really, really good,” he recalled.
His monthly housing payment, including his mortgage, came out to about $335 a month, he said. Rents in the area, however, were about $750 month. That’s when he started thinking about buying and renting property as a way to make some side money.
“Four hundred bucks in 1996 was a lot of money, so it really piqued my interest,” Kosteris said.
He bought his first investment property in 1997: a $59,000 single-family home that he also financed with a 10% down payment. His grocery-stocking job, which he did between 1985 and 1994, helped him come up with the up-front costs, he said. “When I worked there, I got into their profit-share plan, which is kind of like a 401(k). When I left there after nine years, I amassed around $11,000, so I had a decent war chest at the time.”
Kosteris got a tenant and started profiting about $500 a month right away, “so I did it again,” he said.
The next two properties he bought were in Hammond, Indiana. He found out about them through his real-estate agent, who had in-laws living there. He still owns the pair of homes but has invested only in Chicago real estate since then.
Scaling up during the 2008 housing crash: ‘I was like a kid in a candy store’
About 12 years into Kosteris’ investing career, the housing market crashed.
“During the boom, I kind of sat out,” he said, referring to the mid-2000s, when home prices rose rapidly before peaking in 2007. “I wasn’t as active because the deals just didn’t make sense.”
When 2008 came around, though, “I was like a kid in a candy store,” he said.
He landed his first deal in March 2008: a home originally listed for $55,000 that he scooped up for $45,000. “Had I waited two months, I would have gotten it for a lot less,” he added.
In the aftermath of the crash, “I was buying about four houses a year,” said Kosteris. “I probably could have been a little more aggressive and bought more but my kids were younger and I probably would have missed out on a lot of their upbringing. You can’t put a price tag on your kids growing up.”
Around 2010 is when the rental income from his portfolio surpassed his day job income.
He started to experience “the income snowball,” he explained. “The more homes you get, the more money you get at the end of the month and the less time you have to wait to save for down payments.”
Adding to his portfolio during the pandemic: ‘It was the perfect storm’
Kosteris was in the position to buy more aggressively when mortgage interest rates plummeted during the pandemic.
He’s scaled up even more over the past two years than he did in the aftermath of the Great Recession, he said. “It was like the perfect storm. A lot of my properties were almost, or even fully, paid off. I was getting more money from rents, and then the interest rates fell and I was coming across some pretty good deals, so the cash flow at the end of the month was much, much better.”
Plus, he had implemented systems and was using technology that made it easier to manage his properties and collect rent.
Despite owning more properties, “paradoxically, I spend a lot less time landlording than I did three years ago,” said Kosteris, who puts in about seven hours of work a week on his portfolio. He used to knock on every individual door he owned to collect rent each month from his tenants, but nearly all of them now have Cash App or Zelle, saving him time, he said.
He’s never had a property manager, but his wife, Maria, helps with the business. He also has a “de facto manager,” he said, who lives in one of his homes at a discount in exchange for answering phone calls and doing handyman jobs as they arise.
While collecting rent has become more of a seamless process, it’s not always easy landlording.
“Humans are complicated, and if you have 61, 62, 63 tenants, you deal with different personalities,” he said. “I think being a teacher helps, because you have to manage 30 personalities in every classroom and you have to learn how to diffuse certain situations.”
As a landlord, Kosteris has learned to pick his battles wisely.
“If I’m making a heck of a whole lot of money and they’re $20 short on the rent, that’s an early Christmas present,” he said. “I think I’m fair and that goes a long way.”
Kosteris plans to continue buying and renting single-family homes in Chicago. In 2023, his goal is to expand to 80 properties. By 2025, when he plans to retire from education, he’d like to have 100.
Investing in real estate started as a way to make some extra cash so “in case something happened with my job, I wouldn’t be left out in the cold,” he said. “I didn’t think I’d ever get this far.”
The financially independent investor’s top advice is to find a mentor.
“In any endeavor, whether you want to open up a pizzeria or buy real estate, find someone who’s been there and done it,” he said. “Shadow them. Take them out to lunch and buy them lunch — because the advice that they’re going to give you can be priceless.”