My RE plan while working full time. Need opinions!
I’m heading into my 3rd year of real estate investing while working a full time job. At this moment we have a total of 15 doors between two buildings. Both of the buildings are financed with two different local credit unions. For planning purposes, I net 20-25k a year easily between the two properties.
My wife and I self manage, she’s a huge help with answer calls and scheduling maintenance/repairs.
We currently have 30k in the bank for a future multifamily down payment. 30k puts us in that 2-4 unit range at a purchase price around 120k. This price is easily obtainable and 2-4 units are readily available.
So my question is about my plan seeing that in a few months I’ll have 2 years of taxable rental income and be able to acquired a residential investment mortgage. I want to continue adding doors in my local area. After doing numerous hours of reading and listening to podcasts. I believe my best path to get to a minimum of 25 doors is to add a minimum of 2 doors per year for the next 5 years. I believe this is achievable by using the cash flow from the previous years rental income as long as I don’t exceed the 120-130k sale price threshold that I set for myself.
My models have the duplex cash flowing roughly 5k a year based on purpose price, down payments, and local fair value rents.
At 5 years, the yearly cash flow would be right around 50k with 25 doors and a chunk of cash in the bank if I only stick to the minimum 2 doors per year at the planned purchase price.
I’m truly blessed to find the deals on my first two buildings to be able to create a sizable cash flow for future down payments. I’m kind of working backwards by going from acquiring a 10 unit, 5 unit, and most likely a 2 unit in 2020.
Am I doing the right thing? Does this plan sound ok? At 5 years I would be faced with paying down debt and/or investing in future properties to gain financial independence.
Any insight or discussion is appreciated.
Thanks!