I’m positive this subject/question is a dead horse kicked 1,000 times, however I want to get started investing in property for cash flow. I have a good job, a little savings, and a deep desire to exit the rat race.
I have ZERO experience, only a juvenile understanding from some books I’ve read.
I am seeking advice and resources to deconstruct and achieve my goals. How/what are smart ways to plan and execute my ambition?
Hey @Jeremy Willis !
I'd recommend to obviously keep building your knowledge up but you can also start building your team!
Network and find a solid broker, property manager, cpa, attorney, contractor, etc.
Surrounding yourself with an experienced team will boost your confidence to move forward!
Thank you. Team building is a theme I hear very often. What I’m unsure of is how much that costs generally speaking? I’m working from a very tight budget from my perspective. I understand fully that a team is an investment.
@Jeremy Willis - I have found that the easiest way to break down the process of getting started and achieving my goals is to have a solid calculator/spreadsheet. Whether you use what BP has to offer, or you create your own, breaking the finances in to very specific areas has helped me build confidence and understanding of what is achievable.
Just watched a BP video about that. I will become systematic in my approaches!
@Jeremy Willis Well starting with a Broker and a Property manager is free of charge, so I'd definitely start there and then slowly assemble the rest. You can leverage their knowledge and network :)
@Jeremy Willis you need to define your destination first, then map your route to reach it.
Let's say you want to earn $10,000 a month to ensure you are financially free forever. A single-family home rents for $1,000. This means you would need ten single-family homes to bring in $10,000 a year. (NOTE: you still have to pay taxes, maintenance, insurance, and other expenses so you won't actually have $10,000 in cash to live off of)
After determining how many houses you need, figure out what it will take to buy them. Let's say a single-family home that rents for $1000 a month will cost you $100,000 to purchase. You have to pay $20,000 down to purchase each home and you should have a reserve account to cover emergency maintenance, vacancy, or other expenses. After setting aside your money each month, you should have a solid reserve and then can start saving up for your next purchase.
Rinse and repeat.
After you own 10 homes, then you start paying off the smallest mortgage first and work your way up to the largest mortgage. Then you'll own them free-and-clear and can live in financial freedom.
There are a ton of variables in here. What if you purchase a multi-family instead of single-family homes? What if you use owner financing instead of a standard mortgage lender? What if you want $10,000 in cash every month but don't want to pay off the mortgages?
It’s my plan to start with a duplex and rent both units. I have a good job and a good living situation right now.
The end goal is to be financially independent and out of the rat race. I have reversed my goals/steps but each step needs detail. Multiplex units are where I want to be eventually.
I always suggest people get started with Wholesaling. It's a relatively inexpensive way to get started and gets you familiar with the areas of town and rehab estimates and such.