Feasibility of generating significant passive income with LTR

[Ankit Gupta]

Hello,

Having delved into the informative realm of the Bigger Pockets podcast and other materials, I've learned that, optimally, a long-term rental investment might generate a monthly profit of $100-$200 per property. To attain a passive income of around $5,000 per month, one would need to possess a portfolio of at least 25-30 properties. However, acquiring such a substantial number of properties necessitates a considerable amount of upfront cash for down payments. As a newcomer, I find this goal unattainable without substantial initial funds. If lacking cash, the time required to achieve this objective remains uncertain. What's the best way to understand this?

Thank you!

Ankit Gupta

[Mitch Messer]

@Ankit Gupta Welcome to BiggerPockets!

I see two flawed assumptions in your analysis:

First, you should be looking at deals where the monthly cash flow is closer to $400/mo. These DO exist, you'll just have to dig a bit to find them!

That drops the number of properties you'd need in your example by half.

Second, and this is the BIG ONE, your plan is to acquire by going to a bank and putting 20% down. We don't do that!

What if you could buy without involving a bank, and pay less than 10% upfront (sometimes FAR less!)

I recommend you investigate seller financing and "subject-to," both of which are discussed here on BP. Search the Forum and Blogs for details.

Happy Hunting!