Fun Feasibility: How would you go upon making 1 million in 5 years
Real Estate Agent · WA · Member since 2021 · 254 posts · 173 votes
Fun Feasibility: How would you go upon making 1 million in 5 years
Most Popular Reply
Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votesFirst, I'd find a better job and find a bigger shovel to pile cash. $20 per hr. in Settle isn't cutting it. $40 per hour should be the goal. The cost of living is crazy and the ability to invest in ____ would only ever be an after thought.
Second, growth that $10K and at least BEAT INFLATION. Learn to invest in value companies, stocks, bonds, or mutual funds. Max out your retirement accounts. Take advantage of employer matched $$$. This is base level investing in my opinion. If someone isn't doing these things they shouldn't be buying real estate; especially investment properties.
Third, network and market research. Spend 6-months researching the market and continue saving money. Target neighborhoods and understand what a deal looks like. By this time (1-2 years realistically) said person would be in a great position to buy real estate, house-hack, partner, or flip a property. Get things out of order and you're most likely putting the cart before the horse. If this ground work is laid out correctly you can rinse and repeat, buy and hold, and repeatedly growth the net worth.
35 Replies
- 3yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
First, I'd find a better job and find a bigger shovel to pile cash. $20 per hr. in Settle isn't cutting it. $40 per hour should be the goal. The cost of living is crazy and the ability to invest in ____ would only ever be an after thought.
Second, growth that $10K and at least BEAT INFLATION. Learn to invest in value companies, stocks, bonds, or mutual funds. Max out your retirement accounts. Take advantage of employer matched $$$. This is base level investing in my opinion. If someone isn't doing these things they shouldn't be buying real estate; especially investment properties.
Third, network and market research. Spend 6-months researching the market and continue saving money. Target neighborhoods and understand what a deal looks like. By this time (1-2 years realistically) said person would be in a great position to buy real estate, house-hack, partner, or flip a property. Get things out of order and you're most likely putting the cart before the horse. If this ground work is laid out correctly you can rinse and repeat, buy and hold, and repeatedly growth the net worth.
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
Can be done, but you you need to learn a lot about market analysis, how money works (strategies), and develop a financial plan based on your financial NEEDS using the markets you analyze and the strategies that work in those markets at the specific (changing) timelines in your plan.
Each step in the plan must lead financially to the next, and then to the next, and so on. The vehicle is your cash (cash flow and equity) moving forward, and not sitting still. Use your seed money, over and over again,...never spend it. Only spend your profits.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes3y
@Ran Iarovich
I will be the antagonist and say if you are working a w2 40 hours per week and only have $10k chances are probably 1/1000 (remember only 2% of Americans are millionaires)
You will either need to invent something that solves a problem or find a unicorn deal.
Your plan should be how to make your first 1,000 then 10,000 and how to get there before arbitrarily throwing out $1M in 5 years.
7e investments53 Reviews - 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
Also, why do you say "$1M in total net worth"? What are you going to do with that when you retire? Where specifically do you want to have this money?
- Rental Property Investor · Everett, WA · Member since 2015 · 457 posts · 386 votes3y
@Ran Iarovich I think having a target to work towards is useful but worry that aiming for a very specific dollar target could lead to taking excessive risks.
To answer your question, I would start by networking with other investors in the area you are interested in. I like the idea of switching jobs and would look into something like electrical or plumbing. This way you could build skills, earn more and develop connections that could help you as an investor.
Method could be as simple as purchasing a live-in flip / house hack.
John
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesYou do realize that electricians and plumbers must be licensed, and must go through training classes and pass tests to get there,...right? Those are not two examples of jobs to just "switch" to that would come to mind.
Quote from @John Barrett:
@Ran Iarovich I think having a target to work towards is useful but worry that aiming for a very specific dollar target could lead to taking excessive risks.
To answer your question, I would start by networking with other investors in the area you are interested in. I like the idea of switching jobs and would look into something like electrical or plumbing. This way you could build skills, earn more and develop connections that could help you as an investor.
Method could be as simple as purchasing a live-in flip / house hack.
John
Having a specific dollar amount as a target is a necessity. - Rental Property Investor · Everett, WA · Member since 2015 · 457 posts · 386 votes3y
@Joe Villeneuve Absolutely, but they offer apprenticeship programs that allow you to earn a solid income while completing all of your accreditation and a path to much higher income without going into debt.
It's not the express lane to overnight success and it is hard work. However, it could be a much more achievable / sustainable path for skills that will likely remain in high demand.
John
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesHe would be working more hours than he is now.
Quote from @John Barrett:
@Joe Villeneuve Absolutely, but they offer apprenticeship programs that allow you to earn a solid income while completing all of your accreditation and a path to much higher income without going into debt.
It's not the express lane to overnight success and it is hard work. However, it could be a much more achievable / sustainable path for skills that will likely remain in high demand.
John
- Rental Property Investor · Everett, WA · Member since 2015 · 457 posts · 386 votes3y
@Joe Villeneuve That's very true. Admittedly my bias is towards front loading the work / sacrifice to build the skills and network he could leverage later. Just one of the many different ways he could go about building his portfolio.
- Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes3y
Given the opportunities you can take advantage of with $10k--it is unrealistic.
Seattle is expensive, but there are other cities nearby--are they as expensive?
There are seductive looking opportunities in the Midwest, for those with a taste for out of state ownership, but having cash reserves for third party management led repairs and turns and evictions makes it a safer place to own.
If it were reasonably doable, people would be doing it--vs dreaming it.
If your goal is $1M net worth, begin working diligently towards it. Then keep working at it (taking advantage of opportunities that present themselves to you) until you reach your goal,,,,and do push yourself and adjust it for inflation.
And if you can get a better than min wage job, that is stable (that you can keep long term), apply the extra money to your investment funds...realizing lenders often like you to have cash reserves to make the loan (in addition to all other cash requirements--such as a years insurance paid in a advance, and etc..)
For instance look at the cash requirements for a borrower for an FHA 3.5% loan on a duplex with you living in one unit, then look at the closing costs you would pay in Washington (Go Huskies) state to get an idea of the cash money it takes to swing a deal.
Maybe you can find an OWC who is a don't wanter, but those typically come with problems that require knowledge and money to fix.
Just my two Cents
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesPeople are doing it.
Quote from @Scott Mac:
Given the opportunities you can take advantage of with $10k--it is unrealistic.
Seattle is expensive, but there are other cities nearby--are they as expensive?
There are seductive looking opportunities in the Midwest, for those with a taste for out of state ownership, but having cash reserves for third party management led repairs and turns and evictions makes it a safer place to own.
If it were reasonably doable, people would be doing it--vs dreaming it.
If your goal is $1M net worth, begin working diligently towards it. Then keep working at it (taking advantage of opportunities that present themselves to you) until you reach your goal,,,,and do push yourself and adjust it for inflation.
And if you can get a better than min wage job, that is stable (that you can keep long term), apply the extra money to your investment funds...realizing lenders often like you to have cash reserves to make the loan (in addition to all other cash requirements--such as a years insurance paid in a advance, and etc..)
For instance look at the cash requirements for a borrower for an FHA 3.5% loan on a duplex with you living in one unit, then look at the closing costs you would pay in Washington (Go Huskies) state to get an idea of the cash money it takes to swing a deal.
Maybe you can find an OWC who is a don't wanter, but those typically come with problems that require knowledge and money to fix.
Just my two Cents
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesMine is to work smart rather than work hard. Working hard is when you spend your time, which is limited. Working smart is when you spend other people's time, which is unlimited.
Quote from @John Barrett:
@Joe Villeneuve That's very true. Admittedly my bias is towards front loading the work / sacrifice to build the skills and network he could leverage later. Just one of the many different ways he could go about building his portfolio.
- Investor · Charleston, SC · Member since 2011 · 606 posts · 413 votes3y
1. Get a better paying job and work more hours and hopefully get some kinda 401k with a matching program because who does not like free money.
2. Ever waking minute you should be hustling to find properties you can buy without going the traditional route and getting a bank loan. There are people who will sell their property with lease option, owner finance, subject to, etc. Most of these deals take a small amount of money to get into. Yes it is hard but this is why only the determine make big money.
3. Rinse and repeat step 2. Then continue to reinvest the income into more properties or notes, etc.
- 3ySarah KensingerPro MemberReal Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
Join a mastermind and Co-host STR! ;p
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes3y
I'd probably be driving / riding for dollars and wholesaling to build my market knowledge and reserves. Bandit sign grass roots style.
$10k won't barely cover the excise tax of a WA sale over there. My last sale was $22k in that alone. Bird dog / wholesale and network at meetups / on BP.
- 3yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
serial live-in flip / house hack
i know people who have done this 5-10 times in a row
it won't make you $1M cash but it will let you own properties and build equity
- Rental Property Investor · FL · Member since 2016 · 271 posts · 92 votes3y
Quote from @Ran Iarovich:
Your profile:
- no assets
- no liabilities
- $10,000 in your bank account
- $20 minimum wage 9 - 5 job
- Location: Seattle, Washington
- connections already established with vendors, education, lenders, and agents
Your goal:
You must find a way to generate $1 million in total net worth within the next 5 years. All your friends and family members think you are crazy but you have a burning passion and $10,000 to your name. How would you spin together creative real estate financing to make this dream a reality within Seattle, Washington?
Leaning into the "fun feasibility", I would say create content on OF app, get them bananas from the tree.
Anyone's profile:
- no assets --> skip
- no liabilities --> skip
- $10,000 in your bank account --> Master monthly budget, assigned every dollar, that way you can start cutting out miscellaneous cost, and minimize gratification, entertainment, wasted spending. Frugal living = add more to savings. For your DP and closing cost. Apply for first time home buyer funds/credits in your local county/city. Buy a basic 2/2 or 2/3 using FHA loan or 203k or NACA. A property that you see wasted space that as a window and a vent. That way you can build a single wall/door/ and a corner closet to build equity ($10,000 to $20,000 low numbers, depending on property comps ranges from $30,000 to $50,000) simultaneously hack it. and so on. Now you can cross out
-no assets-$20 minimum wage 9-5 job ---> I was in this scenario, I looked for in-house opportunities, and vertically grew my skill set , received few raises, and knew my market to jump ship to continue to grow my income and value in such field. But at the same time remained frugal and keep the money in savings put to work as @Joe Villeneuve and others mentioned, get it moving, put that dollar to work for you.
-Location: Seatle, Washington ---> love that place.
-Connections already established with vendors, education, lenders, and agents ---> keep this going, everything you do mentioned above will keep getting you ready for the future opportunities with all these connections.
Best wishes
- Real Estate Agent · Denver CO · Member since 2019 · 209 posts · 332 votes3y
Realistic advice: I agree with @Jaron Walling parlay the $10K into a bigger shovel.
Unrealistic advice: Maintain the biggest shovel you can, drop your expenses to $0, invest the difference...Sleep in your car/shower at the gym, sell everything, geo-arbitrage, sell plasma, sign-up for paid experimental trials, etc...
Overall, I think you'd be better growing that $10K to let's say $500K in 5 years and moving to a cheaper part of the country or a cheaper country. In many places $500K can provide the same purchasing power of $1M in Seattle
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
Ok.... you want the reality check?
Sell your tv, and anything tv/entertainment like.
Get a 2nd ft job or 2 pt jobs. Than, draft a schedule for doing a dedicated 20hrs week education, as in seriously put it in a schedule and that is all you will be doing those hours every week.
Your life will consist of sleep, eat, work, study, repeat. 7 days a week.
That is reality.
You want to go from 0 too millionaire in light-speed, the only way to have any chance of achieving a monumental goal is with MONUMENTAL EFFOERT.
I am sure you expecting some jazy trick, system, scheme. DOESN'T EXIST. How did Musk become the beast-of-business he is today? Study on the guy, he works no less than 100hrs a week.
You have 168 hours in a week. Use EVERY one of them strategically, with purpose and intent. That's how.
If you want to be a 2%er than ya better be ready to do what 98% don't/won't.
And cut all living expenses to the absolute bear minimum. Live as cheaply as humanly possible. So this way you can dedicate the vast majority of income to income producing business building resources. Live on $1k mnth while earning $10k mnth.
- Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes3y
I'd find me a sugar mamma and gigolo it up for a few years. That's fun feasibility to me, not real estate.
If you think my advice sucks, then at least listen to @Chris Seveney or @James Hamling. - Flipper/Rehabber · Tallahassee, FL · Member since 2014 · 462 posts · 237 votes3y
@Ran Iarovich I started with nothing. So you’re ahead of the game. I earned less than $20 an hour. You have to start at the beginning. Start with your property. There’s lots of programs out there that will help with your down payment. Find them. Buy the biggest house on a reasonable street, preferably near restaurants and stuff to do. Make sure there’s enough parking for tenants. Do not listen to nay sayers that tell you there is nothing out there in your price range, there is. You’ve just got to get good at finding them. You will not find it on the mls or on Zillow or anywhere that everyone looks. Find a network of investors/wholesalers/realtors that actually invest and see if you can be of value to them. Help them out, be their sounding board become immersed in the business of real estate and opportunities will come up. 5 years is easy, try doing it in 3 and while your at it why not 2 million instead?
- Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes3y
This is going to be exceptionally more difficult now than it was 2 years ago
Step 1, no matter what you plan on doing will be to leave Seattle
Personally, I would partner with builders, developers, investors by offering to find deals and go on the loans with them as a guarantor. They provide the funds, I find the deals, I put everything together and we split profits. That way I don't have to actually bring money to the table.
If I started 2.5 years ago and rode the covid wave of stupid appreciation I could have it done in about 2 years.
If I started today, it might take 5-7 years to hit the same goals.
This obviously comes with a significant amount of risk.
- Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes3y
There are multiple ways to get to your goal and none of them are wrong, just different.
If you want to build quickly (and arguably safely), everything has to work for you. For example putting the money in a high interest savings account is better than a traditional one.
I would also decide what skillset you want to get very good at and make that your one thing. Everything else is secondary.
You are going to have to make more money with work. Investing in specific stocks can work but people spend countless hours learning, reading, and studying companies. Index funds might be a safer route.
Seattle is expensive and as a rental market has high risk (like New York, Los Angeles, etc.). However you will get to your higher net worth amount faster because you are dealing with bigger numbers. A 3% appreciation on a $1M home is better than a 3% appreciation on a $100K home.
If it were me (and I'm in Los Angeles) and I wanted to get aggressive with this goal, here is what I would do:
1. Find a job that pays better, even if it is a side hustle.
2. I would build up cash reserves. Moving quickly has its risks and you don't want to be left with no money, mounds of debt, and nowhere to go. I would keep the $10K as a cushion.
3. I would cut back my expenses considerably. Sorry friends, no movies, let's split appetizers, etc. You want this badly, sacrifices will have to be made. Pay off any and all debts unless the money can be better spent elsewhere. For example my car loan is at 2.5% and my high interest savings account right now is at 4.15%. I make more money in the account than I would paying off the car.
4. Talk to a lender about buying multifamily. Live in one unit with roommates and rent out the rest. This might cost you around $50K all in, but every payment builds equity. In Seattle, you likely will not be living for free with only 3.5% down so plan accordingly.
5. This is all while having some sort of side hustle. For me when I was starting I was getting paid to host open houses. I got paid $120/OH, which was about $30/hour back in 2010. What was great is during the down time of the open houses I would read and bring my laptop to further my knowledge. I was getting paid to learn! I would also explore Turo. I think renting out cars is interesting but look into the risks and insurance.
6. I would find a business partner to buy more real estate. Split the risks and scale faster.
- 3yAndrew HoganPro MemberRental Property Investor · Indianapolis, IN · Member since 2016 · 559 posts · 463 votes
Go watch and learn from Undercover Billionaire Season 2. Link to amazon prime.
3 people had to do this same experiment with $100, no contacts, and had to get to 1M in 90 days.
I won't ruin the ending but it's worth learning from!
One of them was dopped off in Seattle actually.
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