Our Why and the Best Strategy to Acheive Our Retirement Goals

Member since 2024 · 49 posts · 30 votes

Hello all,

My husband and I are a bit late to investing, but we know it can help supplement our retirement. We are about 10 years out. I don't think we will ever have enough "doors" to replace an income in this time frame, but we would like to get to 5 doors in the next 5 years which we would sell in 10-15 years to help supplement our retirement income. We are considering long term holds using the BRRRR method focusing on marekts that will be likely to appreciate to reach this goal but have also heard a flip in today's environment may be a better place to start. We have good cash on hand to start and very good equity in our primary home for any rehab costs. Any advice would be greatly appreciated!

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Eric Gerakos

Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes

Anne, I would advise you to focus less on the number of “doors” and more on the quality of your investments. Better to own a few quality properties than a bunch of crapboxes that end up damaged and vacant and eventually lose money. Best of luck to you.

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Joe S.Pro Member
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
2y
Quote from @Anne Christensen:

Hello all,
My husband and I are a bit late to investing, but we know it can help supplement our retirement. We are about 10 years out. I don't think we will ever have enough "doors" to replace an income in this time frame, but we would like to get to 5 doors in the next 5 years which we would sell in 10-15 years to help supplement our retirement income. We are considering long term holds using the BRRRR method focusing on marekts that will be likely to appreciate to reach this goal but have also heard a flip in today's environment may be a better place to start. We have good cash on hand to start and very good equity in our primary home for any rehab costs. Any advice would be greatly appreciated!
Well, the advice I have is…get after it. The journey of 1000 miles begins with one step.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
2y
Quote from @Anne Christensen:

I don't think it's too late at all. I started investing at the age of 47. I just turned 55 and have 33 rentals and 135 storage units.
You may be better off buying as many properties as possible for the next 5-10 years, then paying them off, starting with the smallest mortgage and working up to your largest. You'll have 100% equity and can live off the cash flow the rest of your life.
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John MorganPro Member
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
2y
@Anne Christensen
I started 9 years ago at 44 years old. Buy n hold investor with 29 SFR now. You'll be set if you give yourself 5-10 years.
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Eric Gerakos
Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
2y
Anne, I would advise you to focus less on the number of “doors” and more on the quality of your investments. Better to own a few quality properties than a bunch of crapboxes that end up damaged and vacant and eventually lose money. Best of luck to you.
7 Reply
Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
2y
Where are you at? Where do you want to get to? How much time?

Then determine your method.

Use your strengths.
No capital gains for 2out of 5 years. $250,000 per married individual.
Do value add primary residence and keep selling.
Identify lot splits along with your primary.
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Anne Christensen
OP
Member since 2024 · 49 posts · 30 votes
2y
Quote from @Nathan Gesner:

Quote from @Anne Christensen:

I don't think it's too late at all. I started investing at the age of 47. I just turned 55 and have 33 rentals and 135 storage units.
You may be better off buying as many properties as possible for the next 5-10 years, then paying them off, starting with the smallest mortgage and working uI p to your largest. You'll have 100% equity and can live off the cash flow the rest of your life.
I think this makes a ton of sense. Thanks for your reply!
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River SavaPro Member
Lender · USA · Member since 2022 · 1k+ posts · 1k+ votes
2y
Hey Anne – Sounds like you've got a great plan lined up. Reaching 5 doors in 5 years is definitely within reach, and focusing on the BRRRR method in appreciating markets sounds like a smart way to go. Have you started looking at specific markets yet, or are you still narrowing down your options?

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y
@Anne Christensen
it's definitely never too late to start to invest but you need to be sure that what you're doing aligns with your goals.
BRRRR is an equity play. with the right BRRRR you will be break even, or even cash flow negative, likely for several years. and it's very hands-on and requires a lot of time and effort.
the same with flipping. if we could all go out and buy any old property and paint it and make a quick 50K, we would. but it's really, really tough right now as there is limited inventory, tremendous competition for deals, money is expensive, and good contractors are booked up.
the equity in your home is an example of very expensive money. yes, you can tap it, but at a high interest rate. that just puts more pressure on whatever you're investing in to be a home run and beat the rate you borrowed at. a 9% return is great... unless you borrowed at 10% to get it. then it's not.
if you have enough cash you could buy a single, solid deal and see if you like it and see how well it does. again, though, it's not going to cash flow much, or at all, if you finance it, and it may not appreciate enough to offset both your buy and sell costs in just 5 years, or even 10. buying and selling is also expensive - fees, fees, fees.
not trying to be discouraging, just realistic.
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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
2y
I have made a lot of money using the brrrr method. I was doing them long before I ever heard of the term. I agree with @Nicholas L.
- brrrr and flips are not passive. They require a lot of time and work.
- to do a successful brrrr involves a lot of skills. To have a successful brrrr requires more than paint and flooring.
- I have not done a brrrr since the rates increased in early 2022 because in my market they bleed cash after I perform a refi to extract some of the value add.
- it is almost certain that my next RE acquisition will not be a BRRRR. Changing conditions may dictate pivoting.

Good luck
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Nicholas Davaul
Rental Property Investor · Katy, TX · Member since 2022 · 63 posts · 31 votes
2y
Quote from @Dan H.:

- it is almost certain that my next RE acquisition will not be a BRRRR. Changing conditions may dictate pivoting.

Hi Dan, you mentioned that you were using the brrrr method, however in the upcoming years, you are planning on pivoting. Can you elaborate on which direction you think/plan on taking?
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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
2y
Quote from @Nicholas Davaul:

Quote from @Dan H.:

- it is almost certain that my next RE acquisition will not be a BRRRR. Changing conditions may dictate pivoting.

Hi Dan, you mentioned that you were using the brrrr method, however in the upcoming years, you are planning on pivoting. Can you elaborate on which direction you think/plan on taking?

My current focus is 2 fold with the first being the more likely next: 1) nice area STR. Revenue potential for cost and potential STR regulations will be prioritized over a long distance value add. We have looked and made offers at emerald coast and are looking in the CA sierras currently. Note I have no illusion that this path will create returns close to equivalent of what I used to be able to achieve via brrrr (I have infinite return on most of my existing portfolio) 2) sophisticated partition via coop/Tic and maybe CA SB9 on my OO. this can achieve great return but capital Outlay is prohibitive for most (virtually everyone).
We have 4 STRs (2 long time, 2 a couple years old) that we have made a lot of money on all of them but only 2 achieved (past tense) good cash flow and even those 2 are not achieving good cash flow today. In 2019 the 2 had revenue of $160k (not quite evenly split). I think they will do about $120k this year. But the ROE is even more drastically worse compared to the past as the value of them continues to rise but income has not. Even the STR market in my market is not currently achieving good cash flow (especially if using a PM). Fortunately the appreciation has produced outstanding overall returns.
Good luck

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