Help with achieving a Goal

[Account Closed]

I'm setting a goal to have 10k/ month in passive (doesn't have to be truly passive i'm ok managing the properties myself) income by November 2016. I have 500k liquid to work with. 

Real Estate/personal background info. I'm 28 years old I live in Biloxi, MS. I've rehabbed and successfully flipped two apartment complexes (57 units total), bought and sold a courthouse step property, and had a few other real estate ventures that failed. Long story short I'm fairly comfortable at this point in searching for single family or multi family deals to buy and flip but what i'm looking to do is effectively be able to retire if i chose to do so in the next 12 months. So i'm looking to start buying and holding some things. I'm in the planning stages right now and trying to map out what i'm going to attempt to execute over the next 12 months to make this a reality. 

I have some questions.

1) Is my goal possible? I understand my market is different from your market but what I want to hear someone who has experience say is. "Absolutely, or it's highly unlikely". Absolutely but it's highly unlikely is acceptable as well. :)

2) How would you spend the money? Can someone give an example of why paying cash for 5 different SFR @100k would be a BIG mistake vs leveraging the money and buying 20 SFR putting 20% down on each.

3) Does anyone have a spreadsheet or a link to one that gives you cash on cash return after you factor in depreciation and interest paid etc..? 

I feel like overall what i'm asking is difficult to answer since the market i'm going to be investing in will differ from yours but I think it'd be very helpful to hear what some of your plans would be in your current markets with 500K cash to work with. What would you do?  Any feedback is greatly appreciated. 

[Matt Motil]

My first thought is, yes, you have $500k in liquid money. At a 5% simple interest rate this is $25k, so 2.5x your goals in passive income... class dismissed. 

Now, assuming you wanted to use that money to purchase buy and hold property that would generate passive income, I think your goal is light, to be honest. If you hoped for a 10% ROI, that's a property (or multiple) that generate 50k/year in returns (income minus expenses). For easy math, assuming $500/month in NOI per unit ($500 x 12 = 6000) you only need 8-9 units to generate this kind of income. If you think you will get less return, then you might need more units. Make sense?

You then take what the per door costs are in your area and you come up with the total purchase price of what you need to buy to meet your goals. Assuming 50k/door, you can buy 10 doors in cash, or get a loan at 70% LTV which would get you around a 30 unit building. 30 units x 500/month x 12 months = 180k/year. 180k/500k = 36% ROI.

180k/12 = 15k/month in passive income. And this hasn't taken into account any appreciation, depreciation costs, equity gain, etc.