I have enough now to retire in 5 years!

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I have enough now to retire in 5 years!

Ana Hyler
Lincoln, NE · Member since 2008 · 249 posts · 46 votes

We started investing 5 years ago… and we’re really proud of our accomplishments so far. In 5 years we went from being tenants to owning our residence plus 19 rental doors! Both my husband and I still have our full time jobs and also manage all of our properties… final goal….retire early and keep on investing on the side. We have decided to stop buying and concentrate on paying down the debt acquired with real estate. According to my calculations…in 3 to 5 years we should have enough net cash flow to retire. I’m excited about this new focus. The challenge… I’m an entrepreneur and I will have a very hard time staying put and not trying to keep on growing!
I’m excited to share this with all of my BiggerPockets colleagues…as we all have similar goals and aspirations! … Thoughts?
:D

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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
15y

Congrats! You can see the light at the end of the tunnel and it's not a train! (?) Make sure that retirement means more of a fixed income.

I have seen several of my friends retire on rental income, but it doesn't necessarily stay up with the cost of living, since rents can't be increased, in some cases, quickly, rents lag.
Shooting for 20% more than your needs is better than hitting a figure today and saying I can live off that.

And, don't forget maintenance, 15 years into retirement holding older properties may need attention. Just two aspects that retiring investors should address, IMO.

But, congrats, it sounds like you are well on your way, it's a great feeling isn't it? (!)

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  • Kevin Kaczmarek
    Real Estate Investor · Fishers, IN · Member since 2009 · 408 posts · 196 votes
    15y

    Ana, that is fantastic to hear! Congratulations to you and your husband. I love how it was something you both built the portfolio together. You should blog on here about the journey. I am sure its a fascinating story!

    1Reply
  • Chris L.
    Investor · Fort Wayne, IN · Member since 2009 · 391 posts · 257 votes
    15y

    Ana,
    That is fantastic.
    Keep the focus.
    Others need to hear of what can be accomplished.
    Congratulations

    1Reply
  • Kevin Lunt
    Private Money Lender · Omaha, NE · Member since 2010 · 146 posts · 47 votes
    15y

    Congrats, Ana! That is really great work!

    1Reply
  • Jon Klaus
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    15y

    Great job so far! Why not be prepared to opportunistically buy great deals that fit in very well with your current portfolio. Don't plan to buy, but be on the look out for something really extraordinary that comes along.

    2Reply
  • Account Closed
    Landlord · Seattle, WA · Member since 2010 · 3k+ posts · 1k+ votes
    15y

    Hallelujah!!

    It' a great feeling to know that you don't have to worry about your family's future. You'll have to share your plans and experiences with all of us.

    1Reply
  • Ana Hyler
    OP
    Lincoln, NE · Member since 2008 · 249 posts · 46 votes
    15y

    Thank you all for the cheers! I think I might find the time to blog about our experiences and where we're headed. Maybe a 2011 goal !
    We are thinking of retiring in South America...we will see how our plan progresses.
    And Jon, we will be open to great opportunities...if they arise we will not turn our back.

    0Reply
  • Mat Lewczenko
    Investor · Lenexa, KS · Member since 2010 · 215 posts · 121 votes
    15y

    Congrats! That's awesome!

    1Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    15y

    Congrats! You can see the light at the end of the tunnel and it's not a train! (?) Make sure that retirement means more of a fixed income.

    I have seen several of my friends retire on rental income, but it doesn't necessarily stay up with the cost of living, since rents can't be increased, in some cases, quickly, rents lag.
    Shooting for 20% more than your needs is better than hitting a figure today and saying I can live off that.

    And, don't forget maintenance, 15 years into retirement holding older properties may need attention. Just two aspects that retiring investors should address, IMO.

    But, congrats, it sounds like you are well on your way, it's a great feeling isn't it? (!)

    7Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    15y
    Originally posted by Financexaminer:
    ...
    I have seen several of my friends retire on rental income, but it doesn't necessarily stay up with the cost of living, since rents can't be increased, in some cases, quickly, rents lag.
    ...

    No doubt that this does happen in some areas; I have been told Detroit is an example where this happened. Rents in Detroit actually went into decline with the abundance of foreclosures there, because those fresh foreclosures sold so cheaply that landlords could hit their target cashflow with lower rents - so they lowered rents to attract tenants thus leaving other landlords who had paid more previously now stuck with trying to find tenants in that declining market.

    But in a healthy area, rents will be typically increasing by a "cost of living" factor - 3% to 4% in most years. Justifications for rent increase should also be included in your rent increase letters. Example: Post Hurricane Katrina insurance rates increased on my rentals, so that was used as part of justifying the rent increases. Things like taxes (do they EVER go down), maintenance, utilities - in short, most typical landlord expenses - tend to rise over time, and so you MUST continually raise rents so that you don't "lag".

    3Reply
  • Ana Hyler
    OP
    Lincoln, NE · Member since 2008 · 249 posts · 46 votes
    15y

    Well... we do think that rents will go up with cost of living increases. Also, we are looking to retire in South America where cost of living is lower - We will also be watchful of our situation and not blow it all in a few years ! There is a lot to watch and control and manage...but those will be details as we would be retired and still young !

    0Reply
  • Dale Osborn
    Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
    15y

    Like you said - you will also have to control yourself from getting caught up in the fever of investing and end up getting yourself overextended! We have about the same issue - one was greedy - now has cooled down and now other one is greedy - wanting more and more properties depleting reserves to zero. If something happens then everything could go under! Stick to your plan - and do not get over extended!

    1Reply
  • Account Closed
    Los Angeles, CA · Member since 2008 · 557 posts · 70 votes
    15y

    Congrats!

    1Reply
  • Rich Weese
    Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    15y

    Wonderful job Ana. You had a plan and made it sensisle and easy. Keep it up. I still have an original scratch sheet with the properties I owned, how I'd increase rents and which ones I'd pay off, or trade. When you reach that point, You can start a parrallel universe! I've lived in Brazil and also spent many months in MX. Don't rule central america out yet, imo. Congrats!!! Rich

    2Reply
  • Ana Hyler
    OP
    Lincoln, NE · Member since 2008 · 249 posts · 46 votes
    12y

    Hello all! 3 years later ... There are good news and bad news... I did work only our rentals for the last 2.5 years.... We were doing really well..... Now I feel a little overextended. We now own 25 rental doors.... BUT ...I have promised my self that we will not purchase this year. ;)

    We have a set goal...pay down debt! That being said, I'm back in the workforce!

    3Reply
  • Jon Klaus
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    12y
    Originally posted by @Ana Hyler:
    Hello all! 3 years later ... There are good news and bad news... I did work only our rentals for the last 2.5 years.... We were doing really well..... Now I feel a little overextended. We now own 25 rental doors.... BUT ...I have promised my self that we will not purchase this year. ;)

    We have a set goal...pay down debt! That being said, I'm back in the workforce!

    Welcome back, Ana!

    1Reply
  • Ana Hyler
    OP
    Lincoln, NE · Member since 2008 · 249 posts · 46 votes
    12y

    Thank you! you know sometimes I feel like ...oh my goodness I'm not going to make it and I'm way off track... but thinking about it better to see all possibilities now then after you thought you were done. At least I tell myself that.

    0Reply
  • Bobby Beard
    Real Estate Investor · Panama City, FL · Member since 2012 · 265 posts · 58 votes
    12y
    Ana Hyler Just curious.. Are any of them fully paid off or do they all have debt? What price range houses did you guys stick to?
    0Reply
  • Ana Hyler
    OP
    Lincoln, NE · Member since 2008 · 249 posts · 46 votes
    12y

    Bobby,

    You know, we did have 3 paid off, then we did a HELOC on them to purchase more and so on so forth. We basically have about 5 of the single family houses that will be paid off within 4 to 6 years, if we don't borrow from them again. We usually purchase what makes sense, price wise in Lincoln, you can find anything from about 50K to the millions. We have properties from $50k to $200K. Although, back when the housing market was to the floors, we did purchase a couple of properties for $15K and $25K. We don't find those anymore. :)

    1Reply
  • Account Closed
    Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
    12y

    Hi Ana,

    Congrats and welcome back. Did you blog about your real estate journey in 2011 as stated above? We would love to hear it.

    0Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    12y

    Yes, welcome back! Keep going, retirement in South America I'm sure would be as boring as it is here! You can still deal from anywhere if you have trusted folks at the property end of your deals. Who knows, you might later find you want to bail out of holding dirt and get into notes, much easier from a long distance!

    Good luck, keep going, you've done great! :)

    0Reply
  • Chad S.
    Rochester, MI · Member since 2014 · 88 posts · 50 votes
    12y

    Ana,

    I'm new to BP and own two sf rental's at this time.

    Since you have 19 properties, Can you tell me what your average vacancy runs, and how long it takes you to turn over tenants. Thanks.

    Chad.

    0Reply
  • John E.
    Boston, MA · Member since 2014 · 152 posts · 63 votes
    12y
    Congrats Ana on all that you've accomplished. I'm also very interested in hearing your answers to Chad S' questions. Best of luck- JE
    0Reply
  • Ana Hyler
    OP
    Lincoln, NE · Member since 2008 · 249 posts · 46 votes
    12y

    Thanks guys! We continued to purchase properties till last year, we currently own 25 doors. To respond to Chad S. we work in the Lincoln Ne. market and business is good here! That being said...our vacancies are maybe 5% a year... and once a unit gives us notice of Vacancy, we start marketing it for rent and in general it rents right away. We take 2 weeks to do the touchups, change broken blinds fix anything needed and then a through cleaning and carpet wash before the new ones move in. Every once in a while....we have evictions, but thank God...not often (we had 2 in the last year 2 years)...those usually leave the property needing more than 2 weeks turnover. Hope this info helps you guys. I'm more than willing and happy to share all I can!

    0Reply
  • Ana Hyler
    OP
    Lincoln, NE · Member since 2008 · 249 posts · 46 votes
    12y

    In reality, we should have stopped buying in 2013...but it's hard when you see a good deal! Anyways...this year and next will be focused towards paying off debt...we shall see. If we succeed...we can be ready to retire....within the 5 years original goal!

    0Reply
  • Shaun Reilly
    Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
    12y

    Thanks for updating this thread Ana.

    You see people make these kinds of goals but rarely see if they are on track years later.

    25 doors is pretty good. Hope you guys can get to the level you need to stay mostly on track with your goal.

    With the places still leveraged what is your typical cash flow per door? What do you think you need as an income to be able to retire? With 25 doors seems like if you main goal is to retire fast a plan of aggressively paying off the debt should get you there if your income needs aren't super high.

    1Reply
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