A COVID-Proof Alternative Investment – Automated Teller Machines

Before I invest, I’m always thinking about how a particular investment will hold up during the next crisis, whatever it may be. We all know the crisis is coming; we just don’t know when or what form it will take. It’s not often that I make an investment that, in short order, gets tested by something completely unexpected, much less comes through it with flying colors. Well, that’s exactly what happened with my Automated Teller Machine (ATM) investments I began making in late 2017.

I invest almost exclusively in Alternative Investments (things outside the stock market), and the one investment that probably garners the most intrigue and interest is ATMs.  While some of us use ATMs more than others, we see them everywhere, and I bet you thought they were owned and operated by the banks.  The ATMs you find in the bank lobby or entryway are probably owned and managed by that bank.  The rest are just business assets and can be owned and operated by anyone, including investors like me.

ATMs By The Numbers

Before I get into the specifics of my ATM investments, here’s a general overview of the business.  According to a 2019 article in PR Newswire, the ATM market in 2018 was valued at $18.5B.  There are three primary players in the ATM space, the location owner (the convenience store owner, for example), the ATM owner/investor (the bank or me in this case), and the management company that locates, operates, and maintains the ATMs.  All parties are paid a portion of the fees charged to the ATM users, which average around $2.50/transaction.  The management company receives 45%, the location owner 25%, and the owner/investor 30%.  There is also additional revenue from advertising and signage.

I know what you’re thinking; the last thing you want to do is negotiate the lease of a tiny piece of real estate with a store owner, purchase an ATM, install it, insure it, and maintain it.  I totally get it!  I own dozens of ATMs all across the country by model and serial number, and I’ve never laid eyes, much less a hand, on any of them.  I simply write a check, and these ATMs are purchased, installed, operated, and maintained by third parties.  Every month since February of 2018 (even through COVID), I have received a check for $2,155, and this cash flow continues for a total of seven years.  At the end of seven years, the ATMs will be old and likely outdated and will be sold. 

My Actual Returns

So, what did I have to invest to get this stream of cash flow?  I purchased six ATMs for $104,000.  The monthly cash flow coming back to me is $2,155/month or $25,860/year for a total of $181,020 over seven years.  In the Internal Rate of Return (IRR) calculation below in the second block, the line items are simply the net cash in or net cash out (cash out represented by a negative number) over the seven years.  In year one, I purchased the six machines for $104K and received $25,860 back, so my net cash flow out for year one was -$78,140 ($104K less $25,860).  My net cash flow in years two through seven will be $25,860.  This will result in an IRR of 23.98%. 

But wait, there’s more!  The ATMs also came with a built-in tax advantage called depreciation.

In this case, Bonus Depreciation (While Bonus Depreciation wasn’t available at the time I purchased my first tranche of ATMs, it is available today under the current tax laws.).  So let’s recalculate the IRR taking Bonus Depreciation into consideration.  My initial investment was $104K.  The monthly cash flow coming back to me is $2,155/month or $25,860/year for a total of $181,020 over seven years.  Depreciation is the new element in this calculation.  I received a deduction or expense of $104K in the same year I purchased the ATMs.  I can use this to offset the ATM income itself or other “passive income.”  For this example, I’ll use it to offset the ATM income.

This means that I paid $0 income tax on the first $104K of ATM income.  With an annual income of $25,860, I will mostly deplete my $104K deduction in four years ($25,860 x 4 = ($103,440).  Let’s look at the numbers.

My net cash out in the first year is now $71,934 ($104K less $25,860 less $6,206 in tax savings). How did I come up with the $6,206?  If I’m in a 24% tax bracket, 24% of $25,860 is $6,206.  My net cash in years two through four will be $32,066 ($25,860 plus $6,206).  At the end of year four, I will have used almost all my $104K depreciation ($25,860 x 4 = $103,440).

In years five through seven, I’m back to my net cash in of $25,860.  The IRR in this scenario will be 35.20%, an 11.22% increase over the previous example.

 Keep in mind that I’m not a CPA or a financial advisor, and this is an oversimplification of depreciation and how it’s calculated.  What I’m trying to illustrate is the advantage of investing in an asset that has a built-in tax advantage.  In this case, an 11.22% increase in your return!

You might be wondering, if the money I receive as the ATM owner is based on the ATM fees, how is it that I receive exactly the same amount of money each month?  Great question!  After all, the number of transactions at each ATM varies day to day.  I receive what’s called a “blended return.”  Instead of receiving a varying amount of money each month depending on the number of transactions of each ATM, my ATMs are managed as a group with hundreds of other ATMs.  Regardless of each ATM’s performance in the group, all participants receive the same $2,155/month.

What I’ve described here is not a hypothetical example; I’ve done it many times.  With these ATMs, you get at least a 23.98% IRR, more depending on your tax situation. 

Are ATMs Risky?  

That’s a question that only each investor can answer. They have many of the same risks as any other investment: economic cycles, systemic risks, poor management, political and social unrest, war, natural disaster, technology risks, etc.  There is certainly no liquidity with ATMs; you’re in it for the seven-year term.  As far as withstanding the economic and systemic risk and the social and political unrest that 2020 threw at us, so far, at least, the ATMs have passed the test, delivering a durable and reliable stream of income throughout.

While I invest almost exclusively in Alternative Investments, I know it’s not for everyone.  However, I firmly believe that this asset class has a place in every portfolio. 


The Prolific Investor is Chris Odegard. Chris is an average guy who had a white-collar job in the corporate world and followed the only thing he knew for decades, conventional wisdom and conventional investments. This worked relatively well until 2009 when he experienced an illiquidity event where he lost 55% of his assets and thousands of dollars per month in cash flow. Then, Chris read Robert Kiyosaki’s Rich Dad Poor Dad, and his mind was opened to a different type of investing, investing in real assets and private deals mostly insulated from the volatility, risk, and taxation of the stock market. In just nine years, Chris recouped the 55% he had lost and multiplied it many times over and now shares his experience and knowledge with you through this alternative investment blog. If you’d like to learn more about Chris, Alternatives, or ATMs, please visit his blog at www.TheProlificInvestor.net.

Nothing on this website should be considered financial advice. Investing involves risks which you assume. It is your duty to do your own due diligence. Read all documents and agreements before signing or investing in anything. It is your duty to consult with your own legal, financial and tax advisors regarding any investment.

Chris Franckhauser

Vice President of Strategy & Growth, Advisory Partner

Chris Franckhauser, Vice President of Strategy & Growth, Advisory Partner for Left Field Investors, has been involved in real estate since 2008. He started with one single-family fix and flip, and he was hooked. He then scaled, completing five more over a brief period. While he enjoyed the journey and the financial tailwinds that came with each completed project, being an active investor with a W2 at the time, became too much to manage with a young and growing family. Seeing this was not easily scalable or sustainable long term, he searched for alternative ideas on where to invest. He explored other passive income streams but kept coming back to his two passions; real estate and time with his family. He discovered syndications after reconnecting with a former colleague and LFI Founder. He joined Left Field Investors in 2023 and has quickly immersed himself into the community and as a key member of our team.  

Chris earned a B.S. from The Ohio State University. After years in healthcare technology and medical devices, from startups to Fortune 15 companies, Chris shifted his efforts to consulting and owning a small apparel business when he is not working with LFI (Left Field Investors) or on his personal passive investments. A few years ago, Chris and his family left the cold life in Ohio for lake life in the Carolinas. Chris lives in Tega Cay, South Carolina with his wife and two kids. In his free time, he enjoys exploring all the things the Carolinas offer, from the beaches to the mountains and everywhere in between, volunteering at the school, coaching his kids’ sports teams and cheering on the Buckeyes from afar.  

Chris knows investing is a team sport. Being a strategic thinker and analytical by nature, the ability to collaborate with like-minded individuals in the Left Field Community and other communities is invaluable.  

Jim Pfeifer

President, Chief Executive Officer, Founder

Jim Pfeifer is one of the founders of Left Field Investors and the host of the Passive Investing from Left Field podcast. Left Field Investors is a group dedicated to educating and assisting like-minded investors negotiate the nuances of the passive investing landscape and world of syndications. Jim is a former financial advisor who became frustrated with the one-path-fits-all approach of the standard financial services industry. Jim now concentrates on investing in real assets that produce cash flow and is committed to sharing his knowledge with others who are interested in learning a different way to grow wealth.

Jim not only advises and helps people get started in passive real estate syndications, he also invests alongside them in small groups to allow for diversification among multiple investments and syndication sponsors. Jim believes the most important factor in a successful syndication is finding a sponsor that he knows, likes and trusts.

He has invested in over 100 passive syndications including apartments, mobile homes, self-storage, private lending and notes, ATM’s, commercial and industrial triple net leases, assisted living facilities and international coffee farms and cacao producers. Jim is constantly looking for new investment ideas that match his philosophy of real assets producing cash flow as well as looking for new sponsors with whom he can build quality, long-term relationships. Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Jim earned a degree in Finance & Marketing from the University of Oregon and a Master’s in Business Education from The Ohio State University. He has worked as a reinsurance underwriter, high school finance teacher, financial advisor and now works exclusively as a full-time passive investor. Jim lives in Dublin, Ohio with his wife, three kids and two dogs. In his free time, he loves to ski, play Ultimate frisbee and cheer on the Buckeyes.

Chad Ackerman

Chief Operating Officer, Founder

Chad is the Founder & Chief Operating Officer of Left Field Investors and the host of the LFI Spotlight podcast. Chad was in banking most of his career with a focus on data analytics, but in March of 2023 he left his W2 to become LFI’s second full time employee.

Chad always had a passion for real estate, so his analytics skills translated well into the deal analyzer side of the business. Through his training, education and networking Chad was able to align his passive investing to compliment his involvement with LFI while allowing him to grow his wealth and take steps towards financial freedom. He has appreciated the help he’s received from others along his journey which is why he is excited to host the LFI Spotlight podcast and share the experience of other investors and industry experts to assist those that are looking for education for their own journey.

Chad has a Bachelor’s Degree in Business with a Minor in Real Estate from the University of Cincinnati. He is working to educate his two teenagers in the passive investing world. In his spare time he likes to golf, kayak, and check out the local brewery scene.

Ryan Steig

Chief Financial Officer, Founder

Ryan Stieg started down the path of passive investing like many of us did, after he picked up a little purple book called Rich Dad, Poor Dad. The problem was that he did that in college and didn’t take action to start investing passively until many years later when that itch to invest passively crept back up.

Ryan became an accidental landlord after moving from Phoenix back to Montana in 2007, a rental he kept until 2016 when he started investing more intentionally. Since 2016, Ryan has focused (or should we say lack thereof) on all different kinds of investing, always returning to real estate and business as his mainstay. Ryan has a small portfolio of one-to-three-unit rentals across four different markets in the US. He has also invested in over fifty real estate syndication investments individually or with an investment group or tribe. Working to diversify in multiple asset classes, Ryan invests in multi-family, note funds, NNN industrial, retail, office, self-storage, online businesses, start-ups, and several other asset classes that further cement his self-diagnosis of “shiny object syndrome”.

However, with all of those reaches over the years, Ryan still believes in the long-term success and tenets of passive, cash-flow-focused investing with proven syndicators and shared knowledge in investing.

When he’s not working with LFI or on his personal passive investments, he recently opened a new Club Pilates franchise studio after an insurance career. Outside of that, he can be found with his wife watching whatever sport one of their two boys is involved in during that particular season.

Steve Suh

Chief Content Officer, Founder

Steve Suh, one of the founders of Left Field Investors and its Chief Content Officer, has been involved with real estate and alternative assets since 2005. Like many, he saw his net worth plummet during the two major stock market crashes in the early 2000s. Since then, he vowed to find other ways to invest his money. Reading Rich Dad, Poor Dad gave Steve the impetus to learn about real estate investing. He first became a landlord after purchasing his office condo. He then invested passively as a limited partner in oil and gas drilling syndications but quickly learned the importance of scrutinizing sponsors when he stopped getting returns after only a few months. Steve came back to real estate by buying a few small residential rentals. Seeing that this was not easily scalable, he searched for alternative ideas. After listening to hundreds of podcasts and attending numerous real estate investing meetings, he determined that passively investing in real estate syndications was the best avenue to get great, risk-adjusted returns. He has invested in dozens of syndications involving apartment buildings, self-storage facilities, resort properties, ATMs, Bitcoin mining funds, car washes, a coffee farm, and even a Broadway show.

When Steve is not vetting commercial real estate syndications in the evenings, he is stomping out eye diseases and improving vision during the day as an ophthalmologist. He enjoys playing in his tennis and pickleball leagues and rooting for his Buckeyes and Steelers football teams. In the past several years, he took up running and has completed three full marathons, including the New York City Marathon. He is always on a quest to find great pizza, BBQ brisket, and bourbon. He enjoys traveling with his wife and their three adult kids. They usually go on a medical mission trip once a year to southern Mexico to provide eye surgeries and glasses to the residents. Steve has enjoyed being a part of Left Field Investors to help others learn about the merits of passive, real asset investments.

Sean Donnelly

Chief Culture Officer, Founder

Sean holds a W2 job in the finance sector and began his real estate investing journey shortly after earning his MBA. Unfortunately, it could not have begun at a worse time … anyone remember 2007 … but even the recession provided worthy lessons. Sean stayed in the game continuing to find his place, progressing from flipping to owning single and multi-family rentals to now funding opportunities through syndications. While Sean is still heavily invested in the equities market and holds a small portfolio of rentals, he strongly believes passive investing is the best way to offset the cyclical nature of traditional investment vehicles as well as avoid the headaches of direct property ownership. Through consistent cash flow, long term yield and available tax benefits, the diversification offered with passive investing brings a welcomed balance to an otherwise turbulent investing scheme. What Sean likes most about the syndication space is that the investment opportunities are not “one size fits all” and the community of investors genuinely want to help.

He earned a B.S. in Finance from Iowa State University in 1995 and a MBA from Otterbein University in 2007. Sean has lived in eight states but has called Ohio home for the last 20+.  When not attending his children’s various school/sporting events, Sean can be found running, golfing, shooting or fly-fishing.

Patrick Wills

Chief Information Officer, Advisory Partner

An active real estate investor since 2017, Patrick Wills’ investing journey began like many others – after reading the “purple book” by Robert Kiyosaki. Patrick started with single family rentals, and while they performed well, he quickly realized their inability to scale efficiently while remaining passive. He discovered syndications via podcasts and local meetups and never looked back. He joined Left Field Investors in 2022 as a member and has quickly become an integral part of the team as Vice President of Technology.

An I.T. Systems Engineer by trade, he experienced the limitations of traditional Wall Street investing firsthand in his career and knew there had to be a better way to truly have financial freedom.

Unfortunately, that better way is inaccessible to those who need it most. His mission is to make alternative investments accessible to everyone who seeks to take control of their financial future and to pursue their passions in life.

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