Is this a realistic 7-8 year goal as a REI?
Commercial Property Manager/Facilities Manager · Boston, MA · Member since 2015 · 187 posts · 41 votes
Is this a realistic 7-8 year goal as a REI?
Most Popular Reply
Investor · Becker, MN · Member since 2014 · 144 posts · 82 votes
10yHi @Craig Moore. I like that you have a big goal!
You may find that you run into challenges down the road that make your ultimate goal difficult to accomplish. (For example, it gets more difficult to get financing after 10 properties.) But it's not impossible! Get out there, run the numbers, and buy that first deal! If you buy that first property you will be a lot farther along than most people. Taking that first step will get you closer to the goal. It will all depend on your drive and determination after that.
Best of luck!
20 Replies
- Investor · Becker, MN · Member since 2014 · 144 posts · 82 votes10y
Hi @Craig Moore. I like that you have a big goal!
You may find that you run into challenges down the road that make your ultimate goal difficult to accomplish. (For example, it gets more difficult to get financing after 10 properties.) But it's not impossible! Get out there, run the numbers, and buy that first deal! If you buy that first property you will be a lot farther along than most people. Taking that first step will get you closer to the goal. It will all depend on your drive and determination after that.
Best of luck!
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes10y
How many units do you have so far?
Everyone's idea of comfort is different. I know people that live "comfortably" off $1500 per month income, but that wouldn't be me.
Skyline Properties - Investor · Tavares, FL · Member since 2015 · 110 posts · 24 votes10y
It's possible, sure. There's a ton of questions to be asked and answered in this post.
Where are you getting the money between now and then? Are you going to be reinvesting the cash flow for the next 7 years? If so, you should be buying more properties later in process not a flat line of investing. What's your lifestyle like and are you willing to sacrifice in the beginning to live off less? Why stop working at 30? Keeping a source of income going that will allow you to reinvest your real estate profits will only get you to a wealthy state sooner. You don't have to stay at the job your at now, but I wouldn't consider not having any source of income other than the properties you acquire between now and 30.
- Investor · Hamilton, OH · Member since 2013 · 139 posts · 27 votes10y
i would assume that with such an aggressive purchasing plan that you intend to use the BRRRR method that is popular on here. One issue that you may run into is the refinance of small multis. Because they are not as popular as SFR and not necessarily based off rents in appraisal that it can be hard to find comps. So I think the appraisals may be hit or miss.
- Commercial Property Manager/Facilities Manager · Boston, MA · Member since 2015 · 187 posts · 41 votes10y
Originally posted by @JD Martin:
How many units do you have so far?
Everyone's idea of comfort is different. I know people that live "comfortably" off $1500 per month income, but that wouldn't be me.
Hi JD, I have 0 units thus far. I would say a rough estimate for monthly income would be around $12-$15K/mo. That's very comfortable for me.
- Commercial Property Manager/Facilities Manager · Boston, MA · Member since 2015 · 187 posts · 41 votes10y
Originally posted by @Jeremiah H.:
It's possible, sure. There's a ton of questions to be asked and answered in this post.
Where are you getting the money between now and then? Are you going to be reinvesting the cash flow for the next 7 years? If so, you should be buying more properties later in process not a flat line of investing. What's your lifestyle like and are you willing to sacrifice in the beginning to live off less? Why stop working at 30? Keeping a source of income going that will allow you to reinvest your real estate profits will only get you to a wealthy state sooner. You don't have to stay at the job your at now, but I wouldn't consider not having any source of income other than the properties you acquire between now and 30.
@Jeremiah,
I have been saving the money and building strong relationships with other seasoned investors. Yes, I will be reinvesting every dime. My lifestyle is very frugal and cheap. For example, I'm still wearing the same 2 pairs of pants I bought 3 years ago. I am more than willing to sacrifice any extreme purchases and the like. I'm not big into clubs, drinking, materialism, etc.
I may have phrased my original post wrong. I don't mind working until I'm 30, but 30 will be the cut off age for me. So from here to my 30th I have no problem working a FT-job.
- Commercial Property Manager/Facilities Manager · Boston, MA · Member since 2015 · 187 posts · 41 votes10y
Originally posted by @Dustan Marshall:
i would assume that with such an aggressive purchasing plan that you intend to use the BRRRR method that is popular on here. One issue that you may run into is the refinance of small multis. Because they are not as popular as SFR and not necessarily based off rents in appraisal that it can be hard to find comps. So I think the appraisals may be hit or miss.
Dustin,
You think one house a year is aggressive? I wouldn't know so I'm asking to learn not to criticize.
- 10yGino BarbaroPro MemberRental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
Hi Craig
Even if you started and bought your first duplex and rented out the other side to help with expenses, this is a great way to start. You could possibly be living close to rent free with this strategy.
I see no reason why you can't achieve your goal. You have to get educated on your niche and be constantly learning and taking action.
Gino
- Investor · Becker, MN · Member since 2014 · 144 posts · 82 votes10y
@JD Martinsuggested some people live comfortable off $1500 per month. @Craig Moore estimates he'll want $12K-15K per month. Someone has been reading The 10X Rule book?
My recommendation is to set small and achievable goals. Do your homework, analyze literally 50 deals in detail and rank the top 10 before you make your first offer.
To be successful in real estate takes a lot of work. If you are driven by "I want to retire because I don't want to work", it might not be right for you. But if you're willing to work hard you can do it!
Best wishes.
- Investor · Hamilton, OH · Member since 2013 · 139 posts · 27 votes10y
@criag Moore. I guess that would depend on the amount of capital that you want to use to start with and how much you will want to continue to out in. The BRRRR method can be aggressive (in my opinion). When I started my goal was to purchase one a year. But found that the seasoning requirement required me to wait for 12 months so the refi closing was more like 15 months then I had to find the next property. So I was looking at more like month 18 before I did the next house. But that was because I did not want to put any more of my own $$$ in. I strictly wanted to use the money I was able to refi out of the previous deal. Which forces me to be picky about which purchases I make. Becaue I then have to know what it will appraise for in 12-15 months. I am not saying there is no one buying more than 1 property a year. There are people doing multiple BRRRR each year. But they started by purchasing 2 or 3 and can refi those at staggered times.
- Commercial Property Manager/Facilities Manager · Boston, MA · Member since 2015 · 187 posts · 41 votes10y
Originally posted by @Tim Johnson:
@JD Martinsuggested some people live comfortable off $1500 per month. @Craig Moore estimates he'll want $12K-15K per month. Someone has been reading The 10X Rule book?
My recommendation is to set small and achievable goals. Do your homework, analyze literally 50 deals in detail and rank the top 10 before you make your first offer.
To be successful in real estate takes a lot of work. If you are driven by "I want to retire because I don't want to work", it might not be right for you. But if you're willing to work hard you can do it!
Best wishes.
I've read 10X but can't remember coming across those numbers haha. I would strong prefer to be self-employed, concentrate more on bodybuilding/fitness and have income coming in. I'm willing to work hard. I'm actually 9 weeks out of a bodybuilding competition.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes10y
@Craig MooreI think your goal of one property per year is a reasonable. I have read some other people starting out that have crazy high goals. I am not sure with that goal you will retire at 30, but maybe if you keep going you could retire at 35. Most likely you will not want to retire at 30. Although it sounds good today, you will want to be doing something even if it is actively building your rental business. I wouldn't worry about retirement today, because you will know the right choice when the time comes. It is great that you are frugal and willing to save your money.
As far as your numbers specifically. You are saying you could live off $12-$15K per month. I do not think buying one property per year for 7 years will get you there. That will mean that each property will need to cash flow around $2000 per month. Even if each property is a 4-plex, that is $500 per door. That is going to be challenging.
I guess to summarize, I think one property per year is a good goal, but I would move out my retirement plans. You could alternately increase the number of properties per year, but I am a firm believer in keeping goals achievable. I would start with one property, then see how it goes. Revise your goals each year. You may find after two years, you change your goal to 3 or 4 properties a year. It is hard to say, because so many factors play into this.
- Commercial Property Manager/Facilities Manager · Boston, MA · Member since 2015 · 187 posts · 41 votes10y
Originally posted by @Joe Splitrock:
@Craig MooreI think your goal of one property per year is a reasonable. I have read some other people starting out that have crazy high goals. I am not sure with that goal you will retire at 30, but maybe if you keep going you could retire at 35. Most likely you will not want to retire at 30. Although it sounds good today, you will want to be doing something even if it is actively building your rental business. I wouldn't worry about retirement today, because you will know the right choice when the time comes. It is great that you are frugal and willing to save your money.
As far as your numbers specifically. You are saying you could live off $12-$15K per month. I do not think buying one property per year for 7 years will get you there. That will mean that each property will need to cash flow around $2000 per month. Even if each property is a 4-plex, that is $500 per door. That is going to be challenging.
I guess to summarize, I think one property per year is a good goal, but I would move out my retirement plans. You could alternately increase the number of properties per year, but I am a firm believer in keeping goals achievable. I would start with one property, then see how it goes. Revise your goals each year. You may find after two years, you change your goal to 3 or 4 properties a year. It is hard to say, because so many factors play into this.
Awesome response, Joe. I'd like to rephrase. I don't necessarily have to be retired by 30. In fact, I don't want to be. An ideal situation would be: 30y/o, self-employed, ability to personal train part-time/body-build full time. I know I'll still be working but by 30 I would like it to be on my terms.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes10y
Well, here's the thing: you can alter the amount of money coming in, or alter the amount of money going out, to suit your particular needs. As I said, I know people who are living on $1500/month with no job. Personally, I don't think they live comfortably, but that's using my criteria of lots of rainy-day savings, good health coverage, ability to eat at any restaurant I want without looking up my banking balance first. It works for them. I am a fairly frugal person but I grew up really poor and there are certain things that are deal-breakers for me: junk cars that leave me on the side of the road, struggling to pay utilities, not being able to go to the doctor (actually, I have VA coverage so that doesn't really count), not being able to properly care for my dog. Just as examples.
If you get one unit a year between now and 30, and keep working, you are probably going to have a reasonably impressive portfolio in 7 years. But if you are really doing it, you are going to eat a lot of Ramen Noodles along the way. If you really want the business to support you to where having a job is optional, all of the "profits" from the business need to be reinvested for a certain amount of time. If you plan on drawing off the money you make from anything you pick up as you go, you're probably not going to live off your acquisitions in 7 years.
Skyline Properties - Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes10y
Originally posted by @Craig Moore:
Originally posted by @Joe Splitrock:
@Craig MooreI think your goal of one property per year is a reasonable. I have read some other people starting out that have crazy high goals. I am not sure with that goal you will retire at 30, but maybe if you keep going you could retire at 35. Most likely you will not want to retire at 30. Although it sounds good today, you will want to be doing something even if it is actively building your rental business. I wouldn't worry about retirement today, because you will know the right choice when the time comes. It is great that you are frugal and willing to save your money.
As far as your numbers specifically. You are saying you could live off $12-$15K per month. I do not think buying one property per year for 7 years will get you there. That will mean that each property will need to cash flow around $2000 per month. Even if each property is a 4-plex, that is $500 per door. That is going to be challenging.
I guess to summarize, I think one property per year is a good goal, but I would move out my retirement plans. You could alternately increase the number of properties per year, but I am a firm believer in keeping goals achievable. I would start with one property, then see how it goes. Revise your goals each year. You may find after two years, you change your goal to 3 or 4 properties a year. It is hard to say, because so many factors play into this.
Awesome response, Joe. I'd like to rephrase. I don't necessarily have to be retired by 30. In fact, I don't want to be. An ideal situation would be: 30y/o, self-employed, ability to personal train part-time/body-build full time. I know I'll still be working but by 30 I would like it to be on my terms.
Perfect response and the best reason to be in real estate. You get freedom to follow what you feel passionate about. I will be interested to hear about your first deal. Please make you update us on your progress. Of everything you have posted, the fact that you are ok living a frugal life, is the most powerful gift you have. Too many young people blow hundreds at the bar, on cars, clothing, etc. Much respect to you my friend. Good luck!
- Commercial Property Manager/Facilities Manager · Boston, MA · Member since 2015 · 187 posts · 41 votes10y
Originally posted by @JD Martin:
Well, here's the thing: you can alter the amount of money coming in, or alter the amount of money going out, to suit your particular needs. As I said, I know people who are living on $1500/month with no job. Personally, I don't think they live comfortably, but that's using my criteria of lots of rainy-day savings, good health coverage, ability to eat at any restaurant I want without looking up my banking balance first. It works for them. I am a fairly frugal person but I grew up really poor and there are certain things that are deal-breakers for me: junk cars that leave me on the side of the road, struggling to pay utilities, not being able to go to the doctor (actually, I have VA coverage so that doesn't really count), not being able to properly care for my dog. Just as examples.
If you get one unit a year between now and 30, and keep working, you are probably going to have a reasonably impressive portfolio in 7 years. But if you are really doing it, you are going to eat a lot of Ramen Noodles along the way. If you really want the business to support you to where having a job is optional, all of the "profits" from the business need to be reinvested for a certain amount of time. If you plan on drawing off the money you make from anything you pick up as you go, you're probably not going to live off your acquisitions in 7 years.
Good response. I'd say I'm very frugal as well. As I mentioned earlier, I still am wearing the same 2-3 pairs of pants that I bought 3 years ago. No new sneakers. I don't drink, smoke, watch TV, have a high cell phone bill. The only expenses that I have are groceries, public trans. passes and small living day to day things. I wouldn't eat Ramen Noodles due to health concerns but certainly get the context and am happy to live off of oatmeal...
- Specialist · Toronto, Ontario · Member since 2016 · 564 posts · 425 votes10y
A lot of this will depend on how much you are making now, and how much MF properties cost in your target area. If you're making a lot of money now and are frugal, you will have a lot left over to invest.
If you're not able to save a lot per year, it's going to take a lot longer to save up to buy property.
Good luck!
- Commercial Property Manager/Facilities Manager · Boston, MA · Member since 2015 · 187 posts · 41 votes10y
Originally posted by @Joe Splitrock:
Originally posted by @Craig Moore:
Originally posted by @Joe Splitrock:
@Craig MooreI think your goal of one property per year is a reasonable. I have read some other people starting out that have crazy high goals. I am not sure with that goal you will retire at 30, but maybe if you keep going you could retire at 35. Most likely you will not want to retire at 30. Although it sounds good today, you will want to be doing something even if it is actively building your rental business. I wouldn't worry about retirement today, because you will know the right choice when the time comes. It is great that you are frugal and willing to save your money.
As far as your numbers specifically. You are saying you could live off $12-$15K per month. I do not think buying one property per year for 7 years will get you there. That will mean that each property will need to cash flow around $2000 per month. Even if each property is a 4-plex, that is $500 per door. That is going to be challenging.
I guess to summarize, I think one property per year is a good goal, but I would move out my retirement plans. You could alternately increase the number of properties per year, but I am a firm believer in keeping goals achievable. I would start with one property, then see how it goes. Revise your goals each year. You may find after two years, you change your goal to 3 or 4 properties a year. It is hard to say, because so many factors play into this.
Awesome response, Joe. I'd like to rephrase. I don't necessarily have to be retired by 30. In fact, I don't want to be. An ideal situation would be: 30y/o, self-employed, ability to personal train part-time/body-build full time. I know I'll still be working but by 30 I would like it to be on my terms.
Perfect response and the best reason to be in real estate. You get freedom to follow what you feel passionate about. I will be interested to hear about your first deal. Please make you update us on your progress. Of everything you have posted, the fact that you are ok living a frugal life, is the most powerful gift you have. Too many young people blow hundreds at the bar, on cars, clothing, etc. Much respect to you my friend. Good luck!
Thanks again, Joe. I wholeheartedly agree. I wasn't a big party guy in college. My mind has always been stuck on "more". Not so much in a greedy way but I was always focused on obtaining more wealth. It is odd to not have the latest gadgets and stuff but I truly believe your 30s are when life really starts. If you make it that far.. I'll be sure to keep you guys updated! Still saving this money and looking for ways to find capital!
- 10yHenry R.Pro MemberRental Property Investor · Saratoga County, NY · Member since 2013 · 178 posts · 73 votes
Keep doing what you are doing now, stay connected to BP, read, ask questions, talk to @Brandon Turnerhe's a seasoned Investor as is many other multi time posters on BP, keep saving your money. People on BP have told me make offers, run the numbers, etc reah out to BP members, etc. Oh yeah if you haven't yet for me Rich Dad Poor dad is a must read. I read it twice! And will read it again.
You are young you have the time, keep learning and you will make it.
Best wishes to you
- Cincinnati, OH · Member since 2013 · 10 posts · 0 votes10y
I personally would focus on the math for your first property. Get that under your belt and focus on the take-aways. Give it a couple months and be acutely aware of everything that happens during the process. Did you buy in the right area? Did your financing come in as expected? Did you get great tenants? How is your relationship with profession resources now (bankers, realtors, insurance, property managers, etc)? Then, compile what's good and bad about your experiences. Can you tweak your formula to make it better, more even efficient, cleaner? Did you enjoy the experience so far?
NOW, get serious with short term and long term goals. The single most important thing is that you took action early. At your age, you have time to make plenty of mistakes and can easily recover from them. Think of the concept 'compounding'. Time is on your side, so start slow and SMART. EVERYTHING WILL BECOME MORE CLEAR AFTER YOUR FIRST FEW EXPERIENCES.
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