I see alot on the site about buying and selling but i dont see alot on the site about a specific amount of monthly passive income.  I want 10,000 a month in passive income. so do i buy 50 sfr  or a 250 unit apartment building.  i would like to hear from some seasoned investors in how they have been able to replace w2 income with passive income.

JJ

Best way to find what you are looking for is to use the search box in the top right corner.  The podcast are also a great place to hear real life examples of people replacing w2 income with passive income.  This site is full of great examples.  10k passive income can be acquired through sfr and apartment buildings.  It is really a personal preference.

@JJ GONZALEZ II

@JJ GONZALEZ II

JJ, the best way to get to $10,000/month in Passive income is to find out what investment vehicle will help you achieve this goal and to start acquiring property accordingly. More importantly, what are your financial capabilities such that allows you to get there in a shorter amount of time. Lastly, what are representative cash flows for a single family home in Islip, New York (My grandparents lived there) as compared to Multi Family. If a single family home cash flows $500/month, then you need to acquire 20 properties. Since You have a monthly number, you now have to work backwards to see where you need to be in order to get there. 

    If you are looking for one thing to invest in to get to that number, everyone will tell you something different. You have to find a way to that fits your personal investment strategy and start working away on it. Realize that your strategy may change through the process and that's normal. Best of Luck getting to $10,000/ month in Passive Income. Cheers!

Stuart

Depends on your financial starting point, your knowledge base, the market you are looking in...and eventually will park yourself in, your team in place, your willingness to partner, etc...

That's the short list.

The answer to the question depends on your timeframe, too. Suppose you don't need or want $10k/mo until 15 years in the future when you are going to 'retire'. In that case, you would need relatively few rental properties if they were all fully paid off, which this time scale would allow For. Many investors choose to go that route. (There are many others, however, that can't stand the thought of having all that equity tied up in paid-off property when it could be out earning a higher rate of return.)

If, on the other hand, you set a goal of having $10k/mo in passive rental income in 5 years, that implies a different path to achieving that goal, one where there is a substantial amount of financing still in place.  The number of SFRs or apartment doors needed to achieve the goal will be higher.  There are other factors that come into effect as well, including the class of property, and area of the country.

Currently we're on a path to achieve $5k/mo in 5 years with 24 doors from some apartments.  We can raise that to around $7k/mo with aggressive pay-down of the remaining financing, but to get to $10k/mo, which is our 10 year goal for that complex, we need to add more units.  A colleague who has 10 duplexes (20 units) blew past $7k long ago, because he's invested in a higher rent area, and he purchased his properties 15 years earlier.  So, it all depends.

A 250-unit apt community to me has a lot more potential to be 'passive' than 50 single-family rentals.  An on-site team to take care of things.  Same building materials, location, etc.  Running around to 50 different houses sounds about as passive as 2 full-time jobs!

The timeline of the goal as @Ken P. mentions is a huge part of your equation, as is your team, capital, knowledge, where you are now, etc as others point out.    Piece it up and work backwards as you would go about achieving any goal @JJ GONZALEZ II

Where are you now? How soon are you trying to make this happen?

all great comments.  presently we are evaluating some syndication deals.  But i think the idea is going to be to find 1 or 2 partners to put up 250,000 each and buy a 2.5 to 3 million dollar apt building.  This was we will control the deal and be able to (depending on the property) reposition it with the idea of a cash out refi and then do the brrr method.

@JJ GONZALEZ II Thanks for the shout out. Rural Vacant Land is the best bang for your buck to get you to $10K a month. Once you have that stabilized, I would look for a combination of other rental investments like homes and apartments. Real Estate is full of tiny little niches. Once you complete a few deals, you will know which direction suites you best.

Try Vacant Land First.  It's the most profitable and fastest way to turn a great profit.

J.J. 

I respectfully disagree with most of the posts above.  

NOTHING about single family rentals or apartments is passive!  Regardless of whether you have a property management or not.  Even the best PM Company will still have to pass along a slew of "problems" for you to make decisions on - Most of which are costly. 

Take it from someone who had 80 Single family rentals, and 400 apartment units, in good areas - and with GOOD Property Management Companies. 

We eventually sold them all off, successfully staving off a trip to the looney bin and an eventual bankruptcy. 

1 year prior to that, we bought our first Self-Storage Facility with 252 units.  The partners were getting a "business divorce" and we were able to acquire it, and it was throwing off approximately $9,600 per month in Passive Income. 

Passive - Because there are NO Tenants, Toilets, or Trash.  

It changed my life! 

We painstakingly sold all the houses and apartments and purchased over 3,000 units. 

This Year, we'll buy 3-4 more facilities, and develop 1 from the ground-up. 

I would strongly consider the asset class.  

Good luck, 

I make close to that amount on a retail strip center.  I also make money with a couple of apartment buildings but they are much more work.  The apartments are on the market for sale.

There is a ton of money in turning poor performing apartments into efficient machines but you need to buy and sell to realize that upside.

I agree with @Scott Meyers about those examples not being passive. The more units a person has the less passive it is. Having property management reduces the work a fair amount, but there will be some calls to take and decisions to make.

That's what comes with rental investments and multi-family investing; however, this type of investing does yield a better return than a retirement plan through the stock market (even though I have two different plans) and placing it in a savings account. 

It sounds like for the least amount of headaches and work self-storage would be the way to go. 

@Jack Butala , what are you doing with this rural vacant land to make it generate money?  Building homes on it?  

@Tyler Brown

Thanks.  We buy it.  Then we sell it on terms.

Buy it for $1,500  Then sell it for $18,000 ($197 down and $97 a month) for years.

Please let me know if I can help.

Originally posted by @Jack Butala :

@Tyler Brown

Thanks.  We buy it.  Then we sell it on terms.

Buy it for $1,500  Then sell it for $18,000 ($197 down and $97 a month) for years.

Please let me know if I can help.

 Certainly sounds intriguing, but just to ask the obvious question, why wouldn't people simply buy it themselves for $1,500 and cut out the middle man?

@Tyler Brown

Great questions.  We send letters out to property owners in targeted areas.  The property is not published for sale anywhere.  No one knows its for sale.

We offer the seller cash on the spot for a reduced amount, put a nice presentation together on the internet, and sell it for way more than we pay.

We explain the process in great detail other places on the internet including in the BP blogs.

Steven I'm 9 months late to your post - where can I find out more about what you do with rural land?