$150,000 W-2 and RE investing. An observation

Member since 2019 · 145 posts · 91 votes

RE isnt going to get you there. Case in points.

1. Dave Ramesy loves RE yet readily admits biggest wealth generator is a W-2 job.

2. Notice how many SUCCESSFUL RE investors have joined the BP payroll. Im sure at healthy salaries. Do the math on how much RE it takes to benerate $150k a year at todays price levels. And remember HEALTH INSURANCE, all of a suddent that $150,000 is $180,000.

3. It takes years to benefit from simple rentals. And thats for those who arent recent buyers. Do the math on $100 plus a month rentals.

4. Those multis that everyone wants. They not so great after immense rate compression.

RE is just an investment. The only way you end up in Mauis surfing like Phil Pusjestoski is to sell programs that tell others to do what he does..................................lol.

Otherwise its a long slow grind.

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John Warren

Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes

@Account Closed after building a rental portfolio of 52 units in four years I agree, and I also disagree. The passive income from 52 units is very nice to have, and I make more than $100 per door per month on average. It is not yet enough for me to be on a beach either though. This rental journey ended up pushing me towards my current line of work as a realtor, which has ended up being fantastic.

I also agree that those making $150,000 or more per year will probably be nonplussed by most small multifamily investment opportunities. In fact, I regularly mention this to some of my clients who have high earning W2 jobs. I still think real estate investing can make sense for them due to the incredible tax advantages and long term wealth building, but I think for higher income folks it makes more sense to be a passive investor or to partner with someone else who doesn't have the balance sheet and liquidity.

Where investing shines is for those younger folks who are just starting out. A lot of my younger clients might be making 40-50k per year. For them, the difference between house hacking a three unit or renting is pretty incredible.

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John Warren
Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
7y
@Account Closed after building a rental portfolio of 52 units in four years I agree, and I also disagree. The passive income from 52 units is very nice to have, and I make more than $100 per door per month on average. It is not yet enough for me to be on a beach either though. This rental journey ended up pushing me towards my current line of work as a realtor, which has ended up being fantastic.
I also agree that those making $150,000 or more per year will probably be nonplussed by most small multifamily investment opportunities. In fact, I regularly mention this to some of my clients who have high earning W2 jobs. I still think real estate investing can make sense for them due to the incredible tax advantages and long term wealth building, but I think for higher income folks it makes more sense to be a passive investor or to partner with someone else who doesn't have the balance sheet and liquidity.
Where investing shines is for those younger folks who are just starting out. A lot of my younger clients might be making 40-50k per year. For them, the difference between house hacking a three unit or renting is pretty incredible.
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Account Closed
Rental Property Investor · Central, FL · Member since 2016 · 950 posts · 821 votes
7y
@Account Closed you make some very valid points Hate to admit it my wife and I debt this almost daily It is a slow slow grind to get from nothing to something generated from nothing more then some rentals it’s a piece of the puzzle I agree
1. Dave Ramesy loves RE yet readily admits biggest wealth generator is a W-2 job.
Yes making 150k generates wealth but only at the rate at which you can save it
2. Notice how many SUCCESSFUL RE investors have joined the BP payroll. Im sure at healthy salaries. Do the math on how much RE it takes to benerate $150k a year at todays price levels. And remember HEALTH INSURANCE, all of a suddent that $150,000 is $180,000.
I couldn’t agree more Real estate is a piece to the puzzle of living and some people need more puzzle pieces then others Listening to the BP money podcast is a great example of some smoke and mirrors Some of their FIRE people saying they live on 24,000 a year seems to me like a made up number. One of the most recent shows talked about their living expenses and unless they do nothing but walk everywhere and never vacation and/or don’t count “extras” as living expenses I call some BS on it.
3. It takes years to benefit from simple rentals. And thats for those who arent recent buyers. Do the math on $100 plus a month rentals.
I agree it is this slow grind that unless you have a source of money for downpayments your in for a long journey.
4. Those multis that everyone wants. They not so great after immense rate compression.
Preaching to the choir on this one. I’ve made 4 offers which were even more then I wanted to spend and barely netted me much in CF and the seller didn’t even respond to them. They then sold them for what my calculations come up with as a zero CF game with no value add on the other side.
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Grant Rothenburger
Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes
7y
@Account Closed
"Otherwise it's a long slow grind" - well, yeah, unfortunately it's not the lottery.
Everything you have highlighted is pointing out how you feel about real estate. If those are your feelings, I'd stop now, it's not for everyone, and it doesn't make you rich quick.
There are tons of people who have done well, but if you feel the way you described, I wouldn't focus on real estate.
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