What works best for you?

Question

When investing in a property what is your typical time frame you try to target to have ur investment repaid in full. I understand the sooner or better but I'm trying to learn peoples strategies and at what time frame does a deal start becoming less attractive to you

Joey Pignatelli · Answer

Thank you for your help

Ashish Acharya · Answer

@Joey Pignatelli,

Hey Joey! This is a really good question, and you’ve gotten some solid answers so far. I actually think this is one of the areas a lot of investors get hung up on, and in many cases, it ends up holding them back from investing at all.

Like Chris mentioned and from a tax perspective, a big part of the answer depends on whether the property is treated as passive or non-passive income. What he’s getting at is that while a lot of people invest for passive income and that’s great for some people, many investors (especially high W-2 earners) are actually investing for non-passive treatment.

The reason is tax-driven. When a property qualifies as non-passive, investors may be able to use losses, often created through depreciation and tools like cost segregation, to potentially offset other non-passive income, including W-2 income. That can materially change the economics of a deal.

So it really comes back to your goal with the property. For many investors, the first property isn’t meant to be the end goal, it’s leverage to help grow a larger portfolio over time. Because of that, the strategy isn’t always about paying a property off as quickly as possible.

From a tax perspective, it also shouldn’t always be about paying in cash. Mortgage interest is generally deductible, and debt can be a strategic part of a broader tax plan. When used intentionally, leverage, depreciation, and cash flow together often create a better after-tax outcome than focusing solely on a fast payback period.

That’s why these decisions are usually best made in the context of an overall tax and investment strategy. You don't want to miss out on any opportunities there. Good luck and happy to connect!

Germain Lesur · Answer

Hey Joey!

When I was doing investing for myself, I really cared more about cash on cash return, since I was investing primarily in all cash. The goal was 10-12% returns for me, which got the money back at a decent rate.

Now that we manage investments for others, all our clients have different numbers they focus on. Just like what Chris said, each client has a different "hands-on" level they aim to be at (which is why they hire us), and it does depend on how you're financing the deal, and what your exit strategy is. Are you hoping to do a cash-out refinance in a year? That's super doable in this area. Are you hoping to BRRR in a 3-6 month period like Kenneth said? Again, super doable.

It really does matter on how you're financing the deal and what you want to do with the money when you're done.

Kenneth Garrett · Answer

I like the concept of the BRRRR strategy where at some point you have none of your own money in the deal.  Theoretically, your property is being funded by your tenants.  Even if you had money stuck in the deal at some point your money is returned back to you in full through cash flow.  When I started I just banked the cash flow and bought more deals.  Never spent the cash flow.  My W-2 funded my lifestyle, but real estate investing created my family generational wealth.

Chris Seveney · Answer

Really depends on active vs passive - many hobby rule of 72 which 12% is 6 years and 9% is around 8 years.

if active typically try and accelerate that by 2x