Good day BP,
I am looking to generate about 100k per year from real estate investments and wondering if the plan below can be optimized to get to that goal sooner.
1. Starting capital $400,000 invested in 12% private equity and syndications with 8% preferred + 15% projected IRR in 5 years.
2. No additional money is contributed for this analysis during the 5 years to keep the math simple.
3. Taxes are not factored in again to keep the math simple.
4. First syndication folds in year 5 generating capital gains, which is why the Year 5 number is high.
|Investment||Capital Invested||COC||Year 1||Year 2||Year 3||Year 4||Year 5|
|Year 1 Principal - Private Money||200000||12%||24000||24000||24000||24000||24000|
|Year 1 Principal - Syndications||200000||8%||16000||16000||16000||16000||86000||Syndication folds - IRR 15%|
|Reinvest Year 1 Cashflow - Private Money||40000||12%||4800||4800||4800||4800|
|Reinvest Year 2 Cashflow - Private Money||45000||12%||5400||5400||5400|
|Reinvest Year 3 Cashflow - Syndication||50000||8%||4000||4000|
|Reinvest Year 4 Cashflow - Syndication||50000||8%||4000|
|Year End Cashflow||40000||44800||50200||54200||128200|
|Year 5 Ending Equity (Capital Invested +Year 5 Cashflow)||713200|
1. What ways can the strategy be optimized to reach the 100K goal sooner?
2. If I have access to more money, up to $1mm how does this strategy change? (a lot of money is tied up in primary home equity)
3. Is owning a small multi family generates better cash flows?
4. Is partnering with someone as a money partner to co-sponsor a deal better way to go assuming I can find someone in the near future to work with.
Thanks for your feedback.
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