18 rentals owned free and clear

Investor · Sarasota, FL · Member since 2016 · 45 posts · 19 votes

I have 18 rental properties Free and Clear bringing in 18K a month and worth around $1.6 million. I happily manage them myself but I want to retire in 7 years at the ripe old age of 55. How do I do this?

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Jason Chen

Tampa, FL · Member since 2017 · 240 posts · 153 votes

Step 1: Sell all properties

Step 2: Put 1 million dollars into cryptocurrencies

Step 3: Wait 7 years

Step 4: Collect 100 million dollars

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Jason Monroe
Investor · Oakland, CA · Member since 2016 · 89 posts · 50 votes
9y
@Adam Klugh It might be best to ask the moderator to close comments on this thread. As it doesn't seem as though any new value would be generated for the community from this discussion.
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Account Closed
Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
9y
Something doesnt add up. You have 18 properties worth $1.6M. So average value of each property is about $88K. 50% rule works at that price point so if you are netting $1K per month per property your rent is about $2K per month. Where do you find properties that rent for 2K that are only worth 88K? More likely that is your GROSS rent and net is about half of that. Still not shabby but not the same thing.
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Adam Klugh
OP
Investor · Sarasota, FL · Member since 2016 · 45 posts · 19 votes
9y
18k a month IS gross. But the taxes and insurance on them only amount to a little over $3k. So the net is a little less than $15k
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James Antoine
Residential Real Estate Broker · Huntsville, AL · Member since 2016 · 6 posts · 2 votes
9y
If by retire, you mean, you no longer want to be a landlord,Sell it and Hold the note. Reason: If you net 6-8%, you can do the same without being a landlord. Do the math, find out what terms work best for you and your mortgagor, verify, and go for it. Enjoy.
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Nancy Conrad
Investor · Phoenix, AZ · Member since 2009 · 15 posts · 9 votes
9y
Sounds like you're sailing smoothly. You could sell them as financed properties, live off the cash flow, get out of the landlord business and into the FINANCE business.
If someone stops paying, you take the property back, rinse and repeat.
You can also sell all or part of your cash flow to investors so you can buy more properties over the next 7 years.
We do a mix of this now and keep some properties as rentals because they're growing in value, and rents rise with inflation.
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
9y
Wow. Never would want to approach a forum creation topic in this way.
Approaching it that way can imply that someone will manipulate anything at any cost without thinking of repercussions to get the desired result.
That usually does not instill confidence from other investors who might want to cultivate a relationship or look to invest in a person or a group in the future.
I deal with highly affluent people and the relationship and trust is everything to them.
Everyone has freedom of choice to run their business how they see fit but this is not my cup of tea.
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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
9y
@John Thedford, A couple pages ago before the flaming arrows started flying you hollered at me about how someone could sell 12 properties into a 1031 exchange and not take a bath on them.
Your new negotiation tool of going to the buyer with that brief case full of 9mm could be one option.
Another less felonious and bloody option would be to do the reverse exchange. When you do that you now have 180 days to sell what you're going to sell into the parked property. 180 days is a long time especially since you're going to start marketing those relinquished properties 2-3 months prior to starting the reverse exchange. Do you think it possible that you could sell 12 properties within a 9 month period for market price? I do too.
However, it the clock runs out on the reverse you can always treat it as a stepping stone process. Put only the 6,7, or 8 properties you actually sell into the reverse. and place the other properties into a different transitional bigger property. At a later date combine the two (or three)
Building a portfolio is not an instant process. Shaping a portfolio is decades. Closing out a portfolio is also not going to be instant.
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
@Dave Foster
"Your new negotiation tool of going to the buyer with that brief case full of 9mm could be one option.
Another less felonious and bloody option would be to do the reverse exchange."
Cute. That briefcase is the real deal, not the fake stuff in Bond movies. I DO want to 1031 out of a few properties and am going to approach a hedge fund that just purchased one house from a flipper. They paid stupid high money. My goal would be to sign a contract with delayed closing so I could find a replacement.
BTW--got an unsolicited offer on the briefcase/MP5K setup yesterday. This is such a cool outfit I just don't know if I can part with it. The downside is: when you become your own best customer in the NFA business you can go broke fast:) So, I may have to shoot it a few times at the range, get my videos, and let it go. It truly is fun to go to the range, walk up to the line, and open fire with a briefcase. Most guys aren't prepared for that. It gets a second HUH along with big grins:)
You have a standing offer to go shoot some exotics with me if you wish!
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
@Dave Foster
Text me your number or use FB messenger. My phone blew up the other day (no, we weren't using it for targets) so I got a new one. Lost a LOT of contacts.
I am 100% sold on 1031...now to put together a package and get it sold. May even put it on BP.
BTW--just went back and read some of the comments, and the OP posted BOGUS info. I am done here....
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
9y
Originally posted by @Account Closed:

Something doesnt add up. You have 18 properties worth $1.6M. So average value of each property is about $88K. 50% rule works at that price point so if you are netting $1K per month per property your rent is about $2K per month. Where do you find properties that rent for 2K that are only worth 88K? More likely that is your GROSS rent and net is about half of that. Still not shabby but not the same thing.
If you self manage, properties are in good condition and tenants pay all utilities, the 50% rule assumes way too much expense. These rules are guidelines at best and don't fit all situations.
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Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
9y
Originally posted by @John Thedford:
@Dave Foster
This is my new executive briefcase. Note the trigger on the handle. Note the picture of the hole on the side of the briefcase. Note the 9mm MP5 machine gun inside. Can you afford to lose me??
Cool, that looks like my James Bond 007 Briefcase I had when I was 10 year old.
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Mike G.
Real Estate Agent · Las Vegas, NV · Member since 2016 · 589 posts · 275 votes
9y
Man oh man, am I the only one here who thought that the roller coasters were ONLY at six flags? Buckle up chaps......
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
Originally posted by @Ned Carey:

Originally posted by @John Thedford:

@Dave Foster
This is my new executive briefcase. Note the trigger on the handle. Note the picture of the hole on the side of the briefcase. Note the 9mm MP5 machine gun inside. Can you afford to lose me??
Cool, that looks like my James Bond 007 Briefcase I had when I was 10 year old.
LOL Ned. This is the REAL DEAL. All that Bond stuff was fake Hollywood. This MP5K cycles at 900 rounds per minute, is 9mm, and is the finest machine gun made. It has been used by many federal agencies, as well as top LE agencies world wide. The gun can be removed and fired from outside the briefcase if desired. The operational briefcase is one of the more difficult accessories to come by manufactured by Heckler & Koch and the last one I saw traded was a few grand. Add in the MP5K, and you are talking about 40K or so. If you google machine gun dealers, you will find my website NFAsales.com. I usually rank between #1 and #3. I also have the old MAC machine guns and the operational briefcases for them as well as an Uzi operational briefcase. They were cool, but HK is the ultimate. Who buys this type of stuff? Most of my customers are doctors, lawyers, and businessmen. It is an expensive hobby but LOTS of fun:) I will be taking this to the range in the next few days to give it a "shot" and make a few videos:)
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Javier D.
Investor · FL · Member since 2017 · 266 posts · 220 votes
9y
I'll take all the advice here. Thank you all . I have a similar post that didn't get any action so far(except its really me :) lol. Kind of annoying you would trick people though. You are asking for their experience and education while insulting their intelligence by misleading so it is pretty offensive. I know you didn't mean it that way though. good luck to you and your client. let me know what he decides. i'd like to know. Thank you all for your 2 cents.
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Michael Lucero
Rental Property Investor · Pasadena, CA · Member since 2016 · 164 posts · 149 votes
9y
Originally posted by @Jason Chen:

Step 1: Go to the bank
Step 2: Get a loan of $100,000
Step 3: Buy $100,000 worth of cryptocurrency
Step 4: Wait 7 years
Step 5: Collect $1.6 million
Step 6: Buy $1.6 million in real estate rental properties
Step 7: Make a post on biggerpockets about how to prepare your $1.6 million in rental units for retirement
Step 8: Sell all properties
Step 9: Buy $1 million in cryptocurrencies
Step 10: Wait 7 years
Step 11: Collect 100 million dollars
These are hilarious.
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
9y
@Adam Klugh Don't sweat the judgement. This is the internet after all and no one ever knows what is truth and what is innocent deception. Whether they are yours or someone else's the facts don't change and that is all that we should be interested in.
..Only the names were changed to protect the innocent.
I believe you are advising your client to go in the right direction the problem being that he will still be working long after he retires. His retirement plans, if he really wants to retire, should be to sell everything at some point and kick back.
You are never retired if you retain income investment properties. The question comes down to how much money is enough and unfortunately stats show that the more you have the more you will always want. Wealthy people usually work till they die or their children put them in a home.
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David Faulkner
Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
9y
Originally posted by @John Thedford:

Originally posted by @Ned Carey:
Originally posted by @John Thedford:
@Dave Foster
This is my new executive briefcase. Note the trigger on the handle. Note the picture of the hole on the side of the briefcase. Note the 9mm MP5 machine gun inside. Can you afford to lose me??
Cool, that looks like my James Bond 007 Briefcase I had when I was 10 year old.
LOL Ned. This is the REAL DEAL. All that Bond stuff was fake Hollywood. This MP5K cycles at 900 rounds per minute, is 9mm, and is the finest machine gun made. It has been used by many federal agencies, as well as top LE agencies world wide. The gun can be removed and fired from outside the briefcase if desired. The operational briefcase is one of the more difficult accessories to come by manufactured by Heckler & Koch and the last one I saw traded was a few grand. Add in the MP5K, and you are talking about 40K or so. If you google machine gun dealers, you will find my website NFAsales.com. I usually rank between #1 and #3. I also have the old MAC machine guns and the operational briefcases for them as well as an Uzi operational briefcase. They were cool, but HK is the ultimate. Who buys this type of stuff? Most of my customers are doctors, lawyers, and businessmen. It is an expensive hobby but LOTS of fun:) I will be taking this to the range in the next few days to give it a "shot" and make a few videos:)
LOL ... this reminded me of a salty old developer I used to know. He had a briefcase he would use to close deals too ... except that instead of guns, his breifcase had a martini shaker, strainer, 2 glasses, and flasks for the booze. I'm not sure which kind of briefcase you could close more deals with ... guess it depends on the client ... maybe you could play "let's make a deal" and have them choose if they want what was in briefcase #1 or briefcase #2 ... ROFL.
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