I'd like to spit ball a few ideas I am thinking about to reach my goal of $2k net monthly cash flow.
I currently own a condo free and clear that is worth aprox $65,000. I make about 50K pretax a year at my job. I have little savings.
One option is to save for a down payment on a multifamily home, and move into the smallest unit and rent the rest. I would also rent my condo out for about $900 before HOA, taxes, and repairs. I would then save for a down payment on another multi family or a single family home.
Another option would be to use the equity I have now to finance a single family home, and use the brrrr strategy to acquire more single family homes.
Yet another option would be to sell my condo, use an FHA to buying a quad-plex, and the remainder of the money from the condo to get a loan on another quad-plex.
My goal is to hit $2k net monthly cash flow as soon as possible. I'd like to get their and still own this condo free and clear if it is doable. However, if using the equity or selling the condo would help me get their faster, I am open to that too.
What would you fine people do if you were in my situation? Thanks for taking the time to read and reply to my post!
If you see rents continuing to rise long term on the condo, cash out refi and pull ~$40k out to reinvest. If you're not bullish on rents in the area, sell the condo and reinvest in a larger asset. Rates look like they're going up for the next few years, my goal would be to lock in as much long term debt (safely and with appropriate leverage/reserves) as possible.
BRRRR seems to me to be for most the quickest way to scale. although i would think 50k a year in income may limit you somewhat when it comes to refinancing..
BRRR or buying small multifamily I would say. My own first cash flow goal is around 2k per month and I should hit that in about 5 years total of investing
I am a big fan of the BRRRR technique and starting with an FHA loan on a fourplex, as you noted, is a great way to start.
Sell the condo and utilise the cash to invest in multi to BRRRR. The money is worth far more to you than you will ever get by leaving it in the condo.You should be able to reuse it several times to reach your goals with BRRRR.
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