I have a goal for passive income, is it too far-fetched?

Question

Hi all-

I'm just getting into real estate investing as I would like to quit the rat race and stay at home with my newborn daughter. My goal is to have passive income of $75,000 within a year....is this crazy? Would love any and all advice on how/if i can make this happen. Thank you in advance for the comments!

Arpan Patel · Answer

Last thing to add onto what everyone else has been saying is if you know people with money. You can pool funds together and take down a large multifamily. for 75k passive with a 50/50 split with an investor and a typical unit will yield $100 a month cash flow you'll need to take down 125 units which you can do in one deal if you can find a partner that can qualify for the loan (say FHA), obtain the funds and you run it properly. It's been done and I think there are a few podcasts about people who did just that on their first deal (100+ units). You have some challenges ahead but then again, everything worth doing will have challenges. I hope this helps and Happy Hunting!!

John Casmon · Answer

@Janessa Knowles As others have pointed out, your goal is not crazy or far-fetched, but it depends on your exact situation and how much you currently have to passively invest. If you only have $1,000 then yes, it's far fetched to make $75k a year passively. However, if you are an accredited investor with significant savings, look into syndications as @David Thompson mentioned. You could also look to be a silent partner for a rehabber, but there are more risks and depending on the structure, this may not be considered passive. Also, you can use the BRRR strategy to buy a property, rehab it, rent it and refinance. Not exactly hands-off, but can be done part-time (or with a partner) and is still considered a passive investment.

Bill Pate · Answer

Good luck.  I have been a REI for 10 years and I am just now at $50k.  You need to have at least 10-12 properties in your portfolio to get that much income and they need to be performing properties.   @David Thompson is correct.  You would need about $750k at 10%.  Personally I have about $250k at 20%, but this is only after really carefully building my portfolio over the last decade.  My primary source of income comes from my job, and REI is a part-time gig.  Definitely plan to make it full-time as I am currently taking classes to get my real-estate license.  I am going to work part-time as an agent until I meet the requirements to get a broker's license.  Then I will move into property management full-time.  Good luck.

John Mathewson · Answer

@Janessa Knowles Anything is possible. You just have to want it bad enough. Most aren't willing to do what is necessary to get to that level of passive income. It's not easy, it will cost your more than you thought, it will take longer than you expected, you will face obstacles you didn't plan on but is it worth it? Of course. You can do it. Keep your head down, learn everything you can on here, network like crazy and always keep an open mind. You got this. If I can ever help please let me know.

David Thompson · Answer

Probably need about $750K to yield about 10%.  If you are accredited, there are deals that target that type of CoC return each year, paying you distributions quarterly along the way and w/some upside in refinancing and sales down the road that could get you in the high teens to 20% IRR over 5 year type hold periods.  But conservatively speaking you should be able to get that in most conditions if the syndicate is in strong markets, has a good track record, finds good value add deals and underwrites conservatively.  Certainly achievable in our world.

Patrick Liska · Answer

Janessa,

not saying it cannot be done, but i wish you all the luck. that is a good goal, but real estate is not a get rich quick thing like they show on tv. if you have enough money or happen to invest in some big apartment complexes' you may reach your goal.

Boynton Clune · Answer

Janessa

If like more info on how to get passive income have a lot of my partners  making 15k an up a month an it takes work but can be accomplished  if serious an interested  love to help have a great night.

Boynton

I have a goal for passive income, is it too far-fetched?

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