Analyze My Investment Strategy

4 Replies

Hello all, I am hoping that you can help me with my overall strategy. I am new to investing, and have yet to purchase a property.

Goal: $30,000-$40,000 cash flow per year in 10 years. This will allow me to retire from my regular occupation at that time.

Plan: Invest in small multi-family properties, 2-4 units. I plan to try to keep my cash outlay as low as possible by using a HELOC on our home as the down payment, at least initially, as most of our savings is tied up in retirement accounts.

I am looking for properties in my area, and can get about $100/door/month cash flow.

Do you think that this is a reasonable strategy? If not, any suggestions? 

I do hope that someone can take a look at my plan and either validate it or shoot it down!

Hi @Scott Weaner  

IMO, what you have right now is a very broad goal. In order to get to $30,000-$40,000/year cash flow at $100/mo/door, you will need to have 25-33 units by year 10. Is that something you are planning to do?

With HELOC from your home, how many properties can you purchase using investor financing? What is your plan after you have exhausted HELOC?

it is a great plan and is certainly doable, but its going to take a lot of units and a lot of leveraging at $100 a door with 2-4 units as you know. And like Sharad mentioned, it is going to be slow using a HELOC. Is their anything you can do with your retirement to expedite this?

Thanks for the replies. I guess that I really have not thought past the first couple of properties. I could probably use the HELOC for the first 4 properties, then possibly use some of the equity in the new properties. It seems like I need to try to get more than $100/door to make it more doable.

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