Personal Finance

How to Retire in 3 Years Through Real Estate Investing

Expertise: Landlording & Rental Properties, Personal Development, Real Estate News & Commentary, Business Management, Flipping Houses, Mortgages & Creative Financing, Real Estate Deal Analysis & Advice, Real Estate Wholesaling, Personal Finance, Real Estate Marketing, AskBP, Real Estate Investing Basics
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That's probably the response most people had when they read the title to this post. Retire in three years? Sure, maybe if the person was 99.9 percent of the way there. But there's no way the average person could retire in just three years using real estate… is there?

Well, that’s the question I was asked during one of my weekly BiggerPockets real estate investing webinars—and I took on the challenge. Here’s the gist of how I answered.

(By the way, did you know that every week I host a free online webinar to teach folks about various real estate topics? We've talked about how to invest while working a full-time job, how to invest using no money of your own, how to use fixer-upper rentals to make six figures, and so much more. Sign up for the next one here.)

OK, let’s get on with this discussion, because you’ve got three years until retirement and time is ticking. Here we go.

Let’s Make Some Assumptions About Retiring in Three Years

First of all, let’s make a few assumptions, because I don’t really know anything about you. I’m going to assume that you don’t need six figures to retire.

We’re not talking about buying a yacht, drinking Cristal, and swimming in cash like Uncle Scrooge. We’re talking about retirement—being able to pay your bills with passive income. So, for today’s assumption, we’re going to use $54,000 per year, or $4,500 per month.

Now, if you need more than that, that’s OK—keep listening and you can adjust these numbers on your own later.

So, we have a concrete goal of making $4,500 per month in cash flow from real estate within three years.

I’m a strong believer in turning lofty, undefined goals (like “I want to retire”) into tangible, specific goals (like “I want $4,500 per month in cash flow from rental properties within three years”). Now that is something we can go after.

Related: Want to Escape a Soul-Crushing Job, Reclaim Free Time or Retire Early? Here Are 3 Feasible Paths to Take.

Breaking Down the Big Goal Into the Number of Units

Now that we have our big goal clearly defined—$4,500 per month within three years—we need to break it down even further. What does that even mean?

Well, for me, I like to look at that number and ask the question, “How many rental units (houses or apartment units) do I need to hit that number?”

Of course, that's going to depend on the deal. A lot of people buy real estate, and they lose money every month. We don't want that. We want to buy real estate that is cash flow positive. That means that after all the income has been received and all of the expenses have been paid (and I do mean ALL of them, including vacancy, repairs, CapEx, management, utilities, the mortgage, and more), we should have a positive number.

gray and white small multifamily real estate

How positive?

For me, I like to see between $100 and $200 per month, per unit. That’s just a target I aim for and have been able to get most of my career.

So, let’s use a number smack dab in the middle of that: $150 per month, per unit in cash flow. To all the math geniuses out there, let me ask you a question. If you needed $4,500 per month in cash flow and each unit gave you $150 per month in cash flow, how many units do you need?

Anyone? Anyone?


Right! Thirty units.

Now we’ve taken this big, crazy goal of retiring in three years and condensed it down to a goal of buying 30 units that average $150 per month in cash flow each.

Now we’re getting somewhere—but we’re not done yet! We need to make a plan to get those 30 units.

Making Your Plan to Achieve Retirement

So, how do you buy 30 units over the next three years? Well, you could shop around and find a 30-unit apartment complex, and BAM! You are done.

But that would make for a slightly boring story, so let’s get a bit more creative.

You could also buy 30 single family houses, but that’s a lot of work. Let’s work on a plan that meets somewhere in the middle—small multifamily properties like duplexes, triplexes, or fourplexes.

Additionally, I want to break up our goal of 30 units into three mini-goals, one for each year.

We could say that we want 10 units per year for three years, but I don’t think that’s realistic. I say that because people tend to start a little slower and speed up over time. Instead, I want to set our goals to reflect that reality.

Rather than 10 units per year for three years, let’s set a goal of buying just five units the first year, 10 units the second year, and 15 units the third year.

Related: How Much Do I Need to Retire?

So, we’ve taken this big, lofty goal of “I want to retire in three years” and now, to be on track to hit that, we just need to buy five units this year. Think you could manage that over the next 12 months? I don’t see why not.

But plans are useless without action. The final step in this goal of retiring in three years is to take the action required to meet your goal each year.

Reaching Retirement

What does it take to buy five units over the next 12 months? It’s going to take action.

For example, maybe you'll connect with a local real estate agent and start looking for small multifamily properties. And maybe you'll find a duplex in a few months that gives you the cash flow you need, followed by a triplex a few months after that. Boom—you hit your year-one goal.

Of course, as we talked about earlier, not just any deal is going to work. You’ve got to kiss a lot of frogs before you find your prince. In other words, you will likely need to analyze dozens or even hundreds of deals before buying the right one that fits within your plan.

To help with that, I’d encourage you to check out the BiggerPockets Property Analysis Tools, where you can analyze an entire property in under five minutes to estimate important metrics like cash flow, cash-on-cash return, and more.

Finally, for those wondering, “How am I going to pay for all this?” I want to encourage you with this: If you want it bad enough, you’ll make it happen.

I bought my first 30 units using almost entirely other people’s money. Maybe you’ll partner with someone else. Maybe you’ll house hack. Maybe you’ll use a HELOC, seller financing, lease options, or one of the many other creative strategies that exist.

And if you want to know more about that, be sure to check out my first full-length book, The Book on Investing in Real Estate with No (and Low) Money Down.

The point is, real estate investing IS possible no matter how rich or poor you think you are. It can help you achieve your financial goals no matter how lofty they might seem. But it’s not going to happen by itself.

As personal development author Jim Rohn once said, “Life doesn’t get better by chance. It gets better by change.”

So get out there and break down your big goals—and take the action steps needed to accomplish them.


What does YOUR retirement plan look like? Does it involve real estate? Any questions for me?

Leave your comments below, and let’s talk!

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He is a nationally recognized leader in the real estate education space and has tau...
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    Bob C
    Replied over 3 years ago
    We are working hard to buy our first rental property, but the process is complicated by a business bankruptcy 18 months ago so no lenders are willing to work with us. We live in a small community and I do not know anyone our firwilling to partner with us. We are doing all the right things to build our credit which is up over 150 points since the bankruptcy, and we have saved $15k to go towards our first purchase. Our goal is to retire in five years when my civil seuyrvice retirement kicks in. Any words of advice to help us buy our first property?
    Rachel Luoto Rental Property Investor from Bremerton, WA
    Replied over 3 years ago
    WOW FI is much sooner than I thought… about to close on our first triplex with $300/door… planning to use PM and geographic arbitrage to live on $2k/mo… so I only need 4 more doors after this. I can retire in a year at 25?????? This seems way too simple. Am I missing something? Or is everyone’s freedom number just a lot higher than mine?
    Caleb Hall Investor from Los Angeles, California
    Replied over 3 years ago
    It all just depends on location and personal preference! Congrats! My FI number is higher just because I might want to stay in a higher cost of living area.
    Cody Campbell from Phoenix, Arizona
    Replied over 3 years ago
    Oh my gosh Brandon, this is a great article/plan. this is the plan I have for myself except I did not attach a three year achievement goal. My plan is to start by wholesaling 3-5 properties and then rehab 3-5 properties to build experience and cash flow. while I continue to wholesale/rehab my plan is to follow up with purchasing apartment complexes with 3 to 10 units each until I reach my goal of 50 units. I love my job at the Forest Service and plan to retire there or until they kick me out (haha), I enjoy hiking in the forest studying animals, trees, assisting hikers/campers and working the land. But I have a problem, a common problem.. you see I have been studying REI for over 20 years. I have been to countless seminars (Dave Delgotto, Carleton Sheets, Robert Kiyosaki, Than Merrill, Jerry Norton and many others), I have bought books, tapes, and yes I have even gone to camps. I have watched over 20 videos by Brandon Turner. I have been a member of Bigger Pockets for over 3 years and read countless articles on REI. I have gone to local meetings in my area including Renatus. I even have a mentor (Lloyd Segal), you get the point. I have a lot of knowledge, I have found the properties by doing drive by’s, craigslist, Zillow, Trulia, Redfin and other searches. I analyze the properties, I have contacted title companies to obtain PPI and contact information. But I never pull the trigger and make offers and put the property under contract. after I do all of the research I fizzle out. the fear of making that first purchase, getting financing and knowing what to do in the final steps has held me back for all of these years.. DO YOU HAVE ANY WORDS OR WISDOM OR ADVICE? I
    Byron Bohlsen Investor from Minneapolis, Minnesota
    Replied over 3 years ago
    Cody cambell shit or get off the pot. What’s your return on time at this point? A hole you may never get out of. Start now or get a different hobby
    Susan Maneck Investor from Jackson, Mississippi
    Replied over 3 years ago
    I started investing in 2011 and now my cash flow nearly replaces my earned income. At 61 I want to retire and was planning to retire in the next year. But right now with what is happening with ObamaCare I don’t dare. I can afford everything but the 15K I would need in health insurance under the Republican plan. According to Brandon’s calculations that would be another ten doors. Don’t think I can swing that. 🙁
    Erik W. Real Estate Investor from Springfield, MO
    Replied over 3 years ago
    Good article and very “back to basics” when it comes to making goals and simplifying them. A few things I think could be interesting to expand on… 1) Others have asked about sources of capital which Brandon answered with a list. I’m curious about RENEWING those sources of capital. That is to say, when that 5 year balloon comes due and you don’t have the W2 job any more….you’re at the mercy of whoever at the time wants to lend and you will pay their price. In a tight market or down market, it may be very challenging to find a new source of financing that is cheap enough to sustain the $150 per unit cash flow you’ve come to expect and rely on. Figure many notes amortize over 15-20 years at most and there won’t be a whole lot of principle paid off and you’ll have to repeat the refi process at least 2-3 times until the asset in entirely paid off. The last place you want to find yourself is 5 years into a 20 year am-schedule at 6-7%, then you have to refi and the best rates are 8-10%. It’s very possible we could see rates spike in the near future, especially among private lenders. $4500 / month income is not a lot of wiggle room if rates on your mortgages all go up 1-2% within a 3-year period. 2) $54,000/year income….I know you said adjust the numbers if needed, but this number itself fails to account for many “hidden” expense that come up when not employed. Health insurance, life insurance, disability insurances, etc. Many employers pay those and/or offer group rate discounts. Realistically, if I could survive on $54,000 today with a W2 job I ought to increase that amount by at least 20% to cover the employer-paid benefits we forget to include often. 3) Capital Reserves. I know CapEx is included in your initial figures taken out of the gross rents, but those take time to build up and CapEx can happen any time after Day 1 of owning the property. I think everyone ought to have at least $2000-$4000 per unit UP FRONT capital reserves since no one is going to lend you any money if the a tornado blows the roofs off 5 of your houses and you’ve got several thousand $$$ of insurance deducible and you have no W2 job AND houses where the income suddenly evaporated. Insurance helps, yes! Be sure to have “loss of rents” included so your income doesn’t tank. When you are the owner of your rentals you have to take multiple steps to protect your income. I like the concept overall and I would enjoy seeing follow-up posts to flesh out of the finer details. Maybe a Part 2 and Part 3, etc?
    Matthew Terui from Lihue, Hawaii
    Replied over 3 years ago
    One question I always have with these articles is related to the funding sources. “I bought my first 30 units using almost entirely other people’s money. Maybe you’ll partner with someone else. Maybe you’ll house hack. Maybe you’ll use a HELOC, seller financing, lease options, or one of the many other creative strategies that exist.” In many of those cases there is the issue of repaying the initial investment, right? Using OPM, HELOC, etc means you would have to pay-off the other people and your HELOC. So your cash-flow would be fully or at least partially tied up in paying back those accounts. Am I right? Or am I missing something? Then the real cash-flow would start once that “money down” is paid off.