10-Year Retirement Plan

5 Replies

(assuming adequate capital each year from salary)

Year 1 -- Buy 150-200k single family or duplex with 75k down payment on 10-year mortgage

-Rent property (may cash flow, but happy to just break even)

Year 2 -- Buy 150-200k single family or duplex with 75k down payment on 10-year mortgage

-Rent property (may cash flow, but happy to just break even)

Years 3-10 -- (same thing each year)

Year 11 - Take out another mortgage on the house from Year 1, which is now completely paid off. Live off that money and retire. Continue renting to pay mortgage. (alternatively, HELOC??)

Year 12 - same cycle. 

Please tell me why this is impossible or what I need to watch out for...


Not a bad plan but I do see a couple of flaws.  With a few tweaks, you could make it more bullet-proof.

  • No Cash Flow - A 10 year mortgage will likely make these properties negative or no cash flow.  What do you do if you have vacancy or need to drop in a new HVAC system?  Cash flow gives you staying power.  What if the HVAC goes while and you get laid off?   The empire collapses.
  • Lawsuit Target - When a landlord has no equity and there is a lawsuit, the suit typically goes after insurance.  When a property has a lot of equity, the equity itself becomes a juicy target.

Consider buying more properties with a smaller down payment on a 30-year mortgage.  You can effectively do the same thing as your plan but with less risk.  Even better, the cash flow is offset by depreciation so you aren't paying taxes on the cash.


Thanks for your thoughts. 

So you don't think it would be realistic to (barely) cash flow or net zero on a property on a ten-year mortgage, even if half the value of the home is paid right away with the down payment? I hear you on your concerns, but I'm hoping to keep this as simple and as formulaic as possible. I'm hoping to--theoretically--have some of the monthly revenue go toward reserves, but, in general, I'll plan to keep plenty of cash on hand if something goes wrong. 

As for the lawsuit aspect, I hear you on that. As a litigation attorney, it's not the biggest concern of mine, but I will surely set up individual entities to protect the network of homes to the extent I can. 

I think it's a solid plan, assuming you're adequately reserving for maintenance and CAP Ex on the properties. The only thing that looks challenging, on paper but I don't know your financial situation, is to continue to be able to come up with the $75k for the downpayment every year without dipping into the equity on the previous properties you purchased.

Another way to do this is to BRRRR your first couple of deals and use the equity gained from those as the leverage for the downpayment on the rest.

Putting down a larger downpayment and having a shorter amortization schedule just gives you the return of the loan. Which would be most likely under 5% which really isn’t great when real estate should be commanding closer to 20% returns