I want to develop a 3-5y plan to turn $500k into $200k/year cash flow.  I’m comfortable in the commercial space but also considering Multi Family.  Most of my current 40k sqft is healthcare.

Help me develop my game plan.

This is a cash flow per door question.  For instance, you’ll need 66 doors earning $250 per month per-tax cash flow.  Cash flow goes up and you don’t need as many doors and vice-versa.

$500k has $2.0 to $2.5 million buying power.

@Thomas Willingham In columbus OH I've done 2 deals better than a 40% CoC return, which is what you'd be looking for. One was with VA financing which made my initial cash outlay very minimal, using the 0% down payment. This is not scalable.

The other time I received an INF CoC return was by pursuing the BRRRR strategy. Which to be honest I think there was some lucky timing with that one. Although, this is scalable. My suggestion would be for you to BRRR a larger MF property. Maybe even like what @Mark H. Porter said, 50+ units. You may need more operating cost on the rehab/construction side of things. I've used short term capital for operating cost. 

That's the goal I'd pursue! All the best

Originally posted by @Austin Steed :

@Thomas Willingham In columbus OH I've done 2 deals better than a 40% CoC return, which is what you'd be looking for. One was with VA financing which made my initial cash outlay very minimal, using the 0% down payment. This is not scalable.

The other time I received an INF CoC return was by pursuing the BRRRR strategy. Which to be honest I think there was some lucky timing with that one. Although, this is scalable. My suggestion would be for you to BRRR a larger MF property. Maybe even like what @Mark H. Porter said, 50+ units. You may need more operating cost on the rehab/construction side of things. I've used short term capital for operating cost. 

That's the goal I'd pursue! All the best

Congrats on the deals in Columbus, Ohio! What were the numbers on your BRRRR?

@Remington Lyman thanks!

The deal im talking about is Mellow yellow. 11** Miller Ave Columbus oh

@Thomas Willingham What Mark says is part of the equation. The other half is how much equity you are leaving in the property (velocity of money). The more equity you leave in the higher the CF has to be. For context, if you invested all $500K in $2M in RE and it earned a 10% monthly distribution, that is $50K annually. But what if you recycled the funds (BRRRR style) and invested $500K in $5M of RE, then you are amplifying your cashflow returns. Then, what if you syndicated your own deals, invested alongside your investors, and earned a management fee, acquisition fee, and a monthly distribution...? So I would say you have to find a BRRRR strategy (SFR, MF, commercial, etc) where you can recycle money and then bring on other funds eventually to hit $200K.

Originally posted by @Whitney Hutten :

@Thomas Willingham What Mark says is part of the equation. The other half is how much equity you are leaving in the property (velocity of money). The more equity you leave in the higher the CF has to be. For context, if you invested all $500K in $2M in RE and it earned a 10% monthly distribution, that is $50K annually. But what if you recycled the funds (BRRRR style) and invested $500K in $5M of RE, then you are amplifying your cashflow returns. Then, what if you syndicated your own deals, invested alongside your investors, and earned a management fee, acquisition fee, and a monthly distribution...? So I would say you have to find a BRRRR strategy (SFR, MF, commercial, etc) where you can recycle money and then bring on other funds eventually to hit $200K.

Yes!  This is what I’m talking about.  I used to own a lot of dental offices across the south East before I sold out.  I know I can do it in dentistry, but that’s far from passive and I have no desire to have 100 employees again.  I don’t mind getting after it a d being aggressive for a few years. 

You may also want to look at NNN properties. I'm working in a deal for a single property that will give me a 12.7% ROE with absolute NNN. Now THATS about as passive as they come.

@Mark H. Porter

Would you explain me what NNN strategy is? As detailed it can be. Appreciate

@Alexandre Marques dos Santos

That’s where you pass off all your costs of owning the property to the tenants-property taxes, landscaping, etc. The landlord is only responsible for limited capex. So your costs go up? You pass them on to the tenants.

@Alexandre Marques dos Santos it’s not necessarily complicated but it’s probably best if you do your own research.  Each property and asset class can be treated differently.

@Lee Ripma

Thank you.

@Mark H. Porter

Thank you

Yes!  This is what I’m talking about.  I used to own a lot of dental offices across the south East before I sold out.  I know I can do it in dentistry, but that’s far from passive and I have no desire to have 100 employees again.  I don’t mind getting after it a d being aggressive for a few years. 

Do you mind me asking where there any other reasons to sell out dental offices, besides hassles and "no desire to have 100 employees again"? I would like to connect with you, pls.