Starting out in Seattle and Strategy questions
Hi Everyone. I have been on Bigger Pockets for a month or so. Mostly quietly but getting more active.
I was born and raised in Seattle and have spent the last 15 years working overseas for a humanitarian organization. I am working on my strategy to get out of the rat race in the next 5 years and then concentrate on real estate and other businesses (including a B&B on the beach in Jamaica)
My short and long term goals are below.
5 year goal
To make $5,000 per month passive income from real estate by 2020 to enable my retirement from the UN at 55. Buy at least one new property per year. The long term strategy is based on buy and hold, but will flip existing property when it makes sense. Focus on small apartments (5-50 units).
All cashflow will be reinvested in real estate to continue building the portfolio, in addition of approximately $20,000 per year cash from savings.
First year goals:
- Create real estate investment strategy based on growing portfolio every year. Purchases should combine current cash flow and appreciation potential with a cash on cash return of at least 15% and projected IRR of 50% after 5 years on overall portfolio.
- Build real estate investment team including property management, real estate broker, mortgage broker / banker, investment partners, and other support professionals including accountant and lawyer.
- Sell West Seattle townhouse and buy new property with at least 4-8 doors and $1,000 cash flow per month (Invest up to $150K cash) through 1031 exchange. New property to be managed professionally.
- Learn as much as possible about the real estate industry to determine where my short term and long term niche lie and to enable utilizing my strengths to add value in partnerships.
My questions to the community:
I prefer to invest in the greater Seattle or Washington / Oregon area. Mostly as I have family who can check up on my investments and this is where I will spend at least 50% of my time once I retire. (The balance will be in Jamaica but that is another story and strategy)There is a lot of discussion on BP about investing for cashflow versus appreciation. As I usually only travel to the US 1or 2 times a year, I also prefer to travel to the NW then the Midwest or Texas. As I will not buy (or manage) sight unseen, this also brings me to the NW. What other areas in Washington and Oregon should I be considering? Bellingham? Yakima?
What are reasonable cash on cash returns and IRR based on passive investing? Is building a portfolio to return $5,000 a month reasonable investing from a distance? What is a reasonable cash flow and IRR goal of a $100,000 cash investment.
The Seattle area is very hot right now and finding cashflow deals are difficult, especially from overseas. What is a reasonable mix of cashflow versus appreciation in the portfolio?
I will be in Seattle in the last three weeks of August. I would like to meet like minded investors and potential partners team members to either pick your brains for advice and create synergies for possible future partnerships. Lunch is on me.