How Many Doors Needed?

[Brandon Seider]

Novice REI here, wondering:

- Is it realistic to think I can obtain $1,000/month NOI on a single door ($12,000/year)?

- If yes, can I simply divide $300,000 by $12,000 to determine I would need 25 Doors to reach $300,000 Annual NOI?

[Bill B.]

The $300/mo cashflow doesn’t include the $400-$600/mo principle payoff. So you could/should be making in excess of $800/mo, it just isn’t all cash, unless you do a cash out refi. And it should be close to tax free. Paid off properties should make an easy $1,500-$2,500/mo each in cashflow, depending on the market and the property. 

Don’t forget, cashout refis are tax free  “cashflow”. So either work on getting 10-20 paid off properties by using the property’s income or doing cash out  refis on some to pay off the others. 12 paid off properties brings in $250k without trying, with property management, working an hour a month. And don’t forget, this is taxed much lower than regular income with depreciation, expenses and no social security taxes. That $250k is probably worth more than $300k, especially in states with state income tax.