how to make $20K cash flow monthly

[Hisashi N.]

Hello BP members,

I own 16 free & clear rentals(SFR, worth $1.3M)) here in Atlanta, GA - C Class suburb generating $10K/month before tax C/F (gross monthly rent $16k/mo).

I am in early 50s and have a full time day job with $120K before tax salary annually. My goal is to create $20K/month before tax C/F from rentals by Aug. 2017(9Months!). I have access to HELOC of $300K, and $150K cash reserve. I am in process of increasing our rentals through MLS (mainly REO, burnt land lord,etc.) putting 20% down, average monthly C/F $300/property. I am now planning to do a delayed financing with a direct lender (APR mid 4%) to do BRRRR upto the total 10 loans which is current cap.

Can anyone suggest the best strategy to make my goal ($20K/mo before tax C/F) as early as possible ? My plan is to do the conventional loans up to the limit (10 properties), then do portfolio loan using my existing rentals.

Thanks !

Sean

[Joe Villeneuve]

This is pretty easy with where you are right now.  You just have all of your holdings in the wrong place...for now.  They are out of order.  You have rentals worth a lot in equity, and you need to tap into it to expand.  The trouble is, if you refi, you get cash but a reduced cashflow.  If you are starting out at an avg of only $300/month with no debt, adding debt, and subtracting that from your 300/m cf now, may not get you anywhere.

You may need to take a step back, before you can take a giant leap forward, by selling some/most/all of your current rentals (gradually, but not slowly) to access the $1.3M as cash...then use it to flip in order to double your cash.  You realize that if you went from $1.3M invested, to 2.6M invested, at only 10% return, you would be over your 20k/month requirement.

There are a number of ways to do this.  I've done a few of them.  They work...and faster than you think.