How would you turn 2 million in equity into cash flow?

Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes

So I'm sitting on about 1.4 mil in equity right now. Projected to be nearly 3 mil in five more years. But let's say I have some hardships along the way so I conservatively figure I'll have 2 mil. I could retire with my current cash flow of about 30K a year right now, if I'm frugal, which I am in general. But I don't want it to always be so "tight" so to speak. Seattle is expensive but I plan on relocating anyway when I pull the trigger, so I'd have less expenses. Ideally I'd like to increase my cash flow to replace my six figure job income.

Would you buy an apartment complex with a loan? Turnkey rentals paid in cash? What kind of cash flow could I make from something like this? The apartment complex might offer good cash flow, but also the potential to increase the value of the property through increasing the NOI. Paid off turnkey rentals seem like they would provide cash flow, but not much else.

Also in line with this question, we all know W2 income is King when it comes to getting loans. So as much as I hate to, would it be better to keep the W2 income to qualify for loans so I can snap some up at the bottom of the next major crash? Until I have a few mil to my name and a six figure cash flow? I mean at that point I'd really feel comfortable to retire.

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Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

That's easy. Give it to me and I'll....OK, maybe not,...but it is an easy answer.

Buy a NNN commercial property for 2M with a Cap Rate of at least 6% and you'll have $120k in income with no expenses directly related to the property attached to it. No management, no decrease in income, no CAPEX, no problems. Make sure the company/tenant is at least AA rated, and it is the start of a lease at least 20 years in length...with bumps...so you'll get "raises" too.

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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
9y
That's easy. Give it to me and I'll....OK, maybe not,...but it is an easy answer.
Buy a NNN commercial property for 2M with a Cap Rate of at least 6% and you'll have $120k in income with no expenses directly related to the property attached to it. No management, no decrease in income, no CAPEX, no problems. Make sure the company/tenant is at least AA rated, and it is the start of a lease at least 20 years in length...with bumps...so you'll get "raises" too.
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David Thompson
Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
9y
Hi Jack,
Qualifying for a loan w/o a W2 does make it more challenging. Couple thoughts. I would be looking for other areas of the country that might be better for cash flow since that is your main objective. I've am both an active and passive player in REI to satisfy both spectrums for myself so you may want to look at a two pronged strategy and not put all your eggs into one basket, especially if you are a newbie to owning apartments. You could continue to research good markets that cash flow, start connecting through BP w/local players that are doing what you want to do, travel to the area and really get to know it more, make connections w/brokers, property managers, attend any local BP or MF meetups you find out about. Perhaps find a partner that is on the ground and other 3rd party partners that are experts in what you are doing (value add apt investing) and get going.
Alternatively, or in parallel, you can take some of your cash and invest w/experienced syndicators who do this all day long. Here, you are a passive investor (limited partner) and have limited risk, while the general partner does all the work. Value add syndicators have a leg up right now on inexperienced operators coming into the market at this time in the cycle. Several separators besides experience is connections and relationship w/brokers to get better deals, financial might to get larger deals and scale their operations, clustering strategies to further reduce risks and costs, etc.
Here's a few articles to think about. I really like syndication for geographic and niche diversification if you also like to venture into other areas besides MF apts, but maybe self storage and mobile home parks that have good demographic and supply/demand trends playing into their favor and throw off a lot of cash. Typical syndication returns can be 8% preferred returns (favor LP - you get paid first up to this amount) and cash on cash returns of 8-10%/yr and IRR of 18-20% over 5 yr typical hold. Bottomline, you can get solid returns w/experts, diversify better, while still not having to give up your desire to be a bit more active. I call this the hybrid approach. Later, as most folks realize, their portfolio will shift to more passive positions once they see the many advantages including solid results w/little effort on their part.
https://www.biggerpockets.com/blogs/9145/53820-why...
https://www.biggerpockets.com/blogs/9145/53959-vet...
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Craig Bellot
Property Manager · CT · Member since 2014 · 687 posts · 329 votes
9y
Refinance that equity into an apartment building under one property manager.
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
9y
I guess I would have questions:
1. How much cash flow do you want to have annually?
2. How many more years do you expect to be alive (reasonably ;) )?
3. How hands-on do you want to be with your portfolio?
I like SFH since they make sense in my market and I don't want to move, turn over my portfolio to someone else or compete with some super-conglomerates in the MFH market here. I aim for my equity to make a penny per dollar per month, and my portfolio comes pretty close to that (as we got better at this our later house buys were more profitable than the first stuff). That means $1 mil in equity = $10k per month income. So if I had your equity I'd be looking to bring in $20k per month. I think that's absolutely possible in a lot of markets (I know it is in mine).
Podcast Guest on Show #243
Skyline Properties
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @JD Martin:

I guess I would have questions:
1. How much cash flow do you want to have annually?
2. How many more years do you expect to be alive (reasonably ;) )?
3. How hands-on do you want to be with your portfolio?
I like SFH since they make sense in my market and I don't want to move, turn over my portfolio to someone else or compete with some super-conglomerates in the MFH market here. I aim for my equity to make a penny per dollar per month, and my portfolio comes pretty close to that (as we got better at this our later house buys were more profitable than the first stuff). That means $1 mil in equity = $10k per month income. So if I had your equity I'd be looking to bring in $20k per month. I think that's absolutely possible in a lot of markets (I know it is in mine).
This is interesting, are you able to build that kind of cash flow if you purchased now from the ground up?
1) I'm looking to have ideally 80K annually but 100K-120K would be bonus points.
2) I expect to live to about 80, at least based on how long my father has been alive.
3) I don't mind being hands on. I would prefer to have someone do the day to day, showing units, turnings units, hiring contractors, etc. but if I didn't have a primary job I wouldn't mind doing that so long as it is part time, 10-15 hours a week. I'm willing to wiggle on this if the numbers make sense.
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Craig Bellot:

Refinance that equity into an apartment building under one property manager.
I've actually considered doing this. I could tap the equity in my primary residence, roughly 350K as a nice down payment on a 1 mil apartment complex in Vegas. Trouble is, all the stuff down there seems to be over priced ghettos.
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Jack B.:

Originally posted by @Craig Bellot:
Refinance that equity into an apartment building under one property manager.
I've actually considered doing this. I could tap the equity in my primary residence, roughly 350K as a nice down payment on a 1 mil apartment complex in Vegas. Trouble is, all the stuff down there seems to be over priced ghettos.
Heck, I could actually refinance them all and probably buy a few apartment complexes while keeping my single family homes for appreciation for the time being...Hmmmm...You may be onto something here @Craig Bellot
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
9y
Originally posted by @Jack B.:

Originally posted by @JD Martin:
I guess I would have questions:
1. How much cash flow do you want to have annually?
2. How many more years do you expect to be alive (reasonably ;) )?
3. How hands-on do you want to be with your portfolio?
I like SFH since they make sense in my market and I don't want to move, turn over my portfolio to someone else or compete with some super-conglomerates in the MFH market here. I aim for my equity to make a penny per dollar per month, and my portfolio comes pretty close to that (as we got better at this our later house buys were more profitable than the first stuff). That means $1 mil in equity = $10k per month income. So if I had your equity I'd be looking to bring in $20k per month. I think that's absolutely possible in a lot of markets (I know it is in mine).
This is interesting, are you able to build that kind of cash flow if you purchased now from the ground up?
1) I'm looking to have ideally 80K annually but 100K-120K would be bonus points.
2) I expect to live to about 80, at least based on how long my father has been alive.
3) I don't mind being hands on. I would prefer to have someone do the day to day, showing units, turnings units, hiring contractors, etc. but if I didn't have a primary job I wouldn't mind doing that so long as it is part time, 10-15 hours a week. I'm willing to wiggle on this if the numbers make sense.
It would be a little harder now as the sales prices locally are climbing faster than rent; I've only been able to get one house this year that can make any money. So that's a fair question, I guess if I was starting today I might have to settle for 3/4 of a penny on a dollar, but that would still be a hell of a chunk of money on 2 million.
Half of that in an index fund would get you close to that, maybe 60-80k. So you really might be in a good position to just move some of that equity into the market.
As for work load, on a dozen units if there's no turnover it doesn't even average out to an hour a month for us. I talked about some of this stuff on the podcast if you want to check out the link below. Either way, I think you've got a super position to cash out of some of those high-equity positions for some cash flow.
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Skyline Properties
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Hank Keller
Rental Property Investor · Mansfield, OH · Member since 2017 · 151 posts · 117 votes
9y
@Jack B. - If you turn that equity into a line of credit, you could buy fund 18 SFH turnkey properties (@$70k) in Indianapolis with an average rent of $750 which would equate into over $13,000 per month of income. You would still need to cover your finance fee but just another option to consider...
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Drew Shirley
Attorney / Multifamily Investor · Houston, TX · Member since 2009 · 173 posts · 136 votes
9y
If you were able to pull out 70% of that equity, you'd have just under $1MM in free capital. Lot of options. Invest it in a syndicated apartment deal, and you might get a 6% preferred return ($5,000 per month) plus 2/3 of the additional profits, plus all those lovely tax write offs, plus another big kick when the property sells. A good apartment deal should pay 15%+ to equity investors on IRR.
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David Thompson
Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
9y
@Drew Shirley...good point Drew, even better, most syndicates target a 8% preferred return and accelerated depreciation.
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Ali Boone
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
9y
Well I'll throw in a few different points. Take or leave any of them, they are just what pop into my head-
- I don't agree about the NNN option. Then you're just stuck with the 6% or whatever it is...not really any way of increasing the value or the return.
- For reference, you can get a great turnkey at 8-11% cap rates right now, with appreciation potential, and with tax benefits. Those %s beat a lot of the suggestions people have given, imo.
- Leveraging is key for highest cash flow, but you may not need to worry about it with your level of capital if you just pay cash. It all depends on how the numbers pencil out. If paying cash will get you to your cash flow goals, then cool. If not, leveraging will for sure but then you are talking about the loans. You could certainly and go ahead and do the loan route now while you have the W2 so you can take advantage of it without having to hang onto that job for too long if you want it.
- You'll only need the W2 for residential loans though. If you go commercial, it's not as critical.
- Where are you planning to buy? If it's local, the options will be limited by the numbers. If you aren't set on buying locally (sounds like you're not), then you can just pick what feels better and has the better numbers.
- Residential rental properties (1-4 units) are the most tax-benefited asset class available.
- Residential vs. commercial in general: This is a a crazy-basic article, but might trigger some pros and cons thoughts for you on which to go-
https://www.biggerpockets.com/renewsblog/5-SFRs-or...
- Ultimately, what would you most enjoy buying?
1 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
9y
@Ali Boone If my NNN stayed at 6% I probably wouldn't do it either. The goal was $30k/year....this 6% is double what is needed. The point was how low of a CAP rate would be needed to achieve that goal based on the starting point of available funds. Also, I would be looking for a CAP Rate closer to 9% min.
Besides, that non-appreciating NNN is in fact appreciating...and with at least 5% bumps in the Lease every 5 years, that Original NOI of $180k from year 1 - 5, becomes $189k from 6 - 10, $198k from 11 - 15, and $218k from years 16 - 20. Then, with lease extensions, it goes up from there.
At this point, if you sold it at the same 9% CAP you bought it at, the sale price would be over $2.4M.
If you add it all up over that 20 year period, the numbers would look like this:
$2,035,000 Accumulated Cash Flow (NOI)
$ 422,222 Profit upon sale
$2,455,222 TOTAL over 20 year period....and no management responsibilities.
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Joe Villeneuve:

@Ali Boone If my NNN stayed at 6% I probably wouldn't do it either. The goal was $30k/year....this 6% is double what is needed. The point was how low of a CAP rate would be needed to achieve that goal based on the starting point of available funds. Also, I would be looking for a CAP Rate closer to 9% min.
Besides, that non-appreciating NNN is in fact appreciating...and with at least 5% bumps in the Lease every 5 years, that Original NOI of $180k from year 1 - 5, becomes $189k from 6 - 10, $198k from 11 - 15, and $218k from years 16 - 20. Then, with lease extensions, it goes up from there.
At this point, if you sold it at the same 9% CAP you bought it at, the sale price would be over $2.4M.
If you add it all up over that 20 year period, the numbers would look like this:
$2,035,000 Accumulated Cash Flow (NOI)
$ 422,222 Profit upon sale
$2,455,222 TOTAL over 20 year period....and no management responsibilities.
And then what? 20 years of inflation and now you're not sitting on a hefty chunk of wealth, remember, I started with 2 million...and I lived off that cash flow...Basically I would have very little left....
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Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Ali Boone:

Well I'll throw in a few different points. Take or leave any of them, they are just what pop into my head-
- I don't agree about the NNN option. Then you're just stuck with the 6% or whatever it is...not really any way of increasing the value or the return.
- For reference, you can get a great turnkey at 8-11% cap rates right now, with appreciation potential, and with tax benefits. Those %s beat a lot of the suggestions people have given, imo.
- Leveraging is key for highest cash flow, but you may not need to worry about it with your level of capital if you just pay cash. It all depends on how the numbers pencil out. If paying cash will get you to your cash flow goals, then cool. If not, leveraging will for sure but then you are talking about the loans. You could certainly and go ahead and do the loan route now while you have the W2 so you can take advantage of it without having to hang onto that job for too long if you want it.
- You'll only need the W2 for residential loans though. If you go commercial, it's not as critical.
- Where are you planning to buy? If it's local, the options will be limited by the numbers. If you aren't set on buying locally (sounds like you're not), then you can just pick what feels better and has the better numbers.
- Residential rental properties (1-4 units) are the most tax-benefited asset class available.
- Residential vs. commercial in general: This is a a crazy-basic article, but might trigger some pros and cons thoughts for you on which to go-
https://www.biggerpockets.com/renewsblog/5-SFRs-or...
- Ultimately, what would you most enjoy buying?
Ali didn't you start out in Seattle? I see you moved south...
Anyhow, the thing that scares me about NNN leases is demand. If a company goes out of business it can be very difficult to find a tenant. I like what Grant Cardone says about multi family: EVERYBODY needs a place to live.
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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
9y
Originally posted by @Jack B.:

Originally posted by @Ali Boone:
Well I'll throw in a few different points. Take or leave any of them, they are just what pop into my head-
- I don't agree about the NNN option. Then you're just stuck with the 6% or whatever it is...not really any way of increasing the value or the return.
- For reference, you can get a great turnkey at 8-11% cap rates right now, with appreciation potential, and with tax benefits. Those %s beat a lot of the suggestions people have given, imo.
- Leveraging is key for highest cash flow, but you may not need to worry about it with your level of capital if you just pay cash. It all depends on how the numbers pencil out. If paying cash will get you to your cash flow goals, then cool. If not, leveraging will for sure but then you are talking about the loans. You could certainly and go ahead and do the loan route now while you have the W2 so you can take advantage of it without having to hang onto that job for too long if you want it.
- You'll only need the W2 for residential loans though. If you go commercial, it's not as critical.
- Where are you planning to buy? If it's local, the options will be limited by the numbers. If you aren't set on buying locally (sounds like you're not), then you can just pick what feels better and has the better numbers.
- Residential rental properties (1-4 units) are the most tax-benefited asset class available.
- Residential vs. commercial in general: This is a a crazy-basic article, but might trigger some pros and cons thoughts for you on which to go-
https://www.biggerpockets.com/renewsblog/5-SFRs-or...
- Ultimately, what would you most enjoy buying?
Ali didn't you start out in Seattle? I see you moved south...
Anyhow, the thing that scares me about NNN leases is demand. If a company goes out of business it can be very difficult to find a tenant. I like what Grant Cardone says about multi family: EVERYBODY needs a place to live.
Analysis is still the key...as always. NNN analysis involves the rating of the parent company...and the industry.
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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
9y
Originally posted by @Jack B.:

Originally posted by @Joe Villeneuve:
@Ali Boone If my NNN stayed at 6% I probably wouldn't do it either. The goal was $30k/year....this 6% is double what is needed. The point was how low of a CAP rate would be needed to achieve that goal based on the starting point of available funds. Also, I would be looking for a CAP Rate closer to 9% min.
Besides, that non-appreciating NNN is in fact appreciating...and with at least 5% bumps in the Lease every 5 years, that Original NOI of $180k from year 1 - 5, becomes $189k from 6 - 10, $198k from 11 - 15, and $218k from years 16 - 20. Then, with lease extensions, it goes up from there.
At this point, if you sold it at the same 9% CAP you bought it at, the sale price would be over $2.4M.
If you add it all up over that 20 year period, the numbers would look like this:
$2,035,000 Accumulated Cash Flow (NOI)
$ 422,222 Profit upon sale
$2,455,222 TOTAL over 20 year period....and no management responsibilities.
And then what? 20 years of inflation and now you're not sitting on a hefty chunk of wealth, remember, I started with 2 million...and I lived off that cash flow...Basically I would have very little left....
I have no idea what you mean here.
0 Reply
Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
9y
I am in a very similar situation
This is what I am doing:
1. Cash out
2. Buy fixer uppers
3. Fix them
4. 1/2 sell with owner finance. The other half Lease option. Lease stating renter is responsible for all repairs.
Check your state laws if you are considering this
0 Reply
Jack B.
OP
Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes
9y
Originally posted by @Joe Villeneuve:
Originally posted by @Jack B.:

Originally posted by @Joe Villeneuve:
@Ali Boone If my NNN stayed at 6% I probably wouldn't do it either. The goal was $30k/year....this 6% is double what is needed. The point was how low of a CAP rate would be needed to achieve that goal based on the starting point of available funds. Also, I would be looking for a CAP Rate closer to 9% min.
Besides, that non-appreciating NNN is in fact appreciating...and with at least 5% bumps in the Lease every 5 years, that Original NOI of $180k from year 1 - 5, becomes $189k from 6 - 10, $198k from 11 - 15, and $218k from years 16 - 20. Then, with lease extensions, it goes up from there.
At this point, if you sold it at the same 9% CAP you bought it at, the sale price would be over $2.4M.
If you add it all up over that 20 year period, the numbers would look like this:
$2,035,000 Accumulated Cash Flow (NOI)
$ 422,222 Profit upon sale
$2,455,222 TOTAL over 20 year period....and no management responsibilities.
And then what? 20 years of inflation and now you're not sitting on a hefty chunk of wealth, remember, I started with 2 million...and I lived off that cash flow...Basically I would have very little left....
I have no idea what you mean here.
I started out with 2 mil to invest, and your numbers indicate that I made 2 mil in cash flow over 20 years (lost value with inflation and I have to LIVE on that money), and when I sell the place I'll profit 422K. That's not only not more than I started with, it's LESS. Your example is basically like living off capital gains by selling stocks until you have no stock.
I'm looking for something that pays me dividends but increases in value over time, adjusted for inflation....
0 Reply
Will G.
Rental Property Investor · Maryville, TN · Member since 2009 · 529 posts · 414 votes
9y
Americans are starved for yield right now and there is tremendous pressure on anything realestate that throws off cash. Even the experienced syndicators are having trouble finding deals. Stupid cap rates out there with a lot of trouble ahead if rents should start to fall. Side note; seattle 1 bedrooms are having dramatic increases in vacancy rates.
The retail apocolypse that will kill 40 percent of that sectors square footage needs in the coming decade, no yeild in bonds, artificially cheap money(interest rates) and an old bull equities market has everybody fishing in the same shallow pond.
Please keep your job until you have something SECURED. If you need to sell your primary to get liquid do it soon, and dont fall for the "wait for the top" mentality, as you only see a top in the the rearview.
Count you blessings, dont try to hold onto every dollaras you move to your next stage in life, and pick something you will feel good about!
1 Reply
Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
9y
I must be missing something. With 2M in equity you never have to work again
Take your 2M put it into a quality income fund and kick back with a solid 6 figure annual income and never touch your principal. You defiantly do not have to diddle with real estate.
If you want to retire get out of real estate not deeper into it.
0 Reply
Ali Boone
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
9y
@Joe Villeneuve A lot of that will depend on the structure of the NNN too. I've seen it different ways--some have lease terms with fewer rent increases. Some keep you responsible for the roof or structure. So to pin the number down specifically, will depend on the structure. Hands-off, yes, but missing a lot of income streams.
@Jack B. No, I grew up in Atlanta and now live in LA. My mom is from Seattle though :) I agree with you too about the NNN tenants. I was shopping for NNNs earlier this year (hence why I have an opinion) and that was one of my arguments (among others). Especially with fast-food...while many argue KFC and McDonalds will never go out, what if they do? I never see fast food buildings re-rent well. Same with random Mattress Firms or something. I dunno, I just get itchy about what companies will still be here in 20 years. Those are always odd buildings to have to rent back out.
0 Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
9y
Originally posted by :

A lot of that will depend on the structure of the NNN too. I've seen it different ways--some have lease terms with fewer rent increases. Some keep you responsible for the roof or structure. So to pin the number down specifically, will depend on the structure. Hands-off, yes, but missing a lot of income streams
That's right, but I wouldn't call that a Absolute NNN. What you described is often called it though by brokers, and that's just misleading. A true NNN covers everything.
Hands off yes is important. This is for retirement. You're getting a steady income with bumps and no work for 20 plus years. The example I gave averaged around $200k/year in cash flow.
0 Reply
Leslie Pappas
Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
9y
Agree with a lot of what @David Thompson shared about syndications.
Jack, I view large multi-family apartment investing as very attractive area especially for folks that want to invest w/experts that do value add investing for a living and you can help fund the acquisition and share in the profits. I've written a few blogs you might find of interest. Most folks I talk to migrate away from even doing turnkeys due to the extra hassles and distance of managing your own properties even if you have property management. If you like to be somewhat active, great, do that locally but for distance and diversification, its hard to beat being a part of a 200 or 300 unit apartment investment in a strong market where trying to do this yourself would be very difficult to do.
https://www.biggerpockets.com/blogs/7993/48729-are...
1 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
9y
Originally posted by @Jack B.:

So I'm sitting on about 1.4 mil in equity right now. Projected to be nearly 3 mil in five more years. But let's say I have some hardships along the way so I conservatively figure I'll have 2 mil. I could retire with my current cash flow of about 30K a year right now, if I'm frugal, which I am in general. But I don't want it to always be so "tight" so to speak. Seattle is expensive but I plan on relocating anyway when I pull the trigger, so I'd have less expenses. Ideally I'd like to increase my cash flow to replace my six figure job income.
Would you buy an apartment complex with a loan? Turnkey rentals paid in cash? What kind of cash flow could I make from something like this? The apartment complex might offer good cash flow, but also the potential to increase the value of the property through increasing the NOI. Paid off turnkey rentals seem like they would provide cash flow, but not much else.
Also in line with this question, we all know W2 income is King when it comes to getting loans. So as much as I hate to, would it be better to keep the W2 income to qualify for loans so I can snap some up at the bottom of the next major crash? Until I have a few mil to my name and a six figure cash flow? I mean at that point I'd really feel comfortable to retire.
Many looking to retire with actual passive cash flow go the reit or nnn route. I know of no one who decided to pick up more single family rentals for passive retirement cash flow. I am sure many have and many wish they had not if they wanted more passivity. Reits could throw off around 150k annually on 2 mil and nnn depends but usually less without financing. Both reits and nnn can and do appreciate.
Good luck!
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