What holes are in my strategy?
Hello! This is only my second post on BP. I am a new investor from NE Ohio. My husband and I recently purchased/are waiting to close on our first duplex (50/50 rule applies perfectly, making $600/mo profit or 300 each and we already have tenants lined up to move in).
elow is a summary of what we are planning on doing for our 7-8 year investment strategy. I am not looking for suggestions on changing our strategy (since we all have our own strategies) I am just curious to know what I can expect specifically as far as financing loopholes or issues we may encounter. I will preface this my saying both my husband and I work full time and have stable incomes. I was raised in a real estate family with my mom owning her own RE firm and my dad laying floors for a living and has rehabbed his own investment property once. My husband and I gutted and rehabbed (biggest job was a new kitchen) our first home ourselves (aka no hired help) as well so we are not afraid of getting our hands dirty.
year 1 - buy a duplex with 600/mo profit
year 2 - buy second duplex with 600/mo profit
year 3 - buy a third duplex with 600/mo profit
year 4 - sell all properties and use the cash and equity from them for 25% down payment on a small apartment building (550-600k selling price) with 4800/mo profit (10-20 units depending on the rent)
year 5 - ride it out and save the profit
year 6 - ride it out and save the profit
year 7 - sell the apartment building and use the cash and equity as a 25% down payment on an apartment community (2-2.5M selling price) with 14-20k/mo profit
We chose duplexes for a specific reason starting out because of the market in our area makes them a better investment than single family homes. It is very easy to find duplexes in our area with a solid 50/50 rule while single families don't make as much per unit. Once we get our third property, my mom is going to be our property manager and my dad and uncle will be our maintenance department (unless we have to go out of the area to find a property in which case we will hire help).