Hello everyone!
I am no stranger to BiggerPockets, however I am a new member. I've been trolling the internet for a year or so now, studying real estate from most angles. I've dug into flipping, wholesaling, renting SFHs, and multifamily. Based on my goals, I think multifamily investing is the way forward. From what I've seen (keep in mind I'm very new to the arena), multifamily properties are cash-flowing fairly well these days and deals seem to be out there. I am less concerned about appreciation and am more interested in maximizing cash-flow. Not to bore everyone with my own background but here's a little blurb about my situation:
Single, 29 years old, no debt, $100k in the bank and a well paying job. I'm at a cross-roads with work but regardless at which route I take, I want to invest in multifamilies and get going with building my cash-flow and net worth. I'm a minimalist and don't require TOO much to get by. I'm basically looking to stash my cash into something that COULD eventually provide enough income to retire young (my ultimate goal). Based on what I can find, at BEST, lenders will only loan up to 80% LTV on commercial properties at roughly 5.25-5.5% (depending on terms and all that). My end goal is to receive somewhere between $50-100k/yr take-home cash-flow after all is said and done. I understand that this will be tough when starting out with just $100k (plus closing and fees). Assuming I can finance 80%LTV, it seems possible I could land a property for around $500k with a 15% cap rate which would probably net around $40-50k after expenses and debt service. If this were POSSIBLE, then I could easily hold and save the cash-flow for a couple of years and use that $80-100k to put down on a similar property which would then push my net income up to 80-100/yr. It all sounds nice and easy, but are properties really out there that perform as advertised? I know it takes alot of due diligence to ensure you're getting what's being pitched. Assuming it is feasible to acquire such a property, is this the correct approach to building up a solid cash-flow without overleveraging? The other school of thought is to buy-hold for a year or so, cash-out refi, and pick up another prop. But if you follow that chain long enough, you're paying more interest and getting less return than what it's worth. My thinking is that if I can manage to get 2-4 properties within say... 5-7 years, based on the numbers above, I should be styling. It's very easy to crunch numbers and come up with grand plans based on perfect conditions, but I'm just curious as to how many investors out there are actually succeeding and meeting the goals they have set? Am I dreaming here or is this simple strategy remotely possible?
If so, any thoughts on the best sources for finding the appropriate properties for an investor? Buying agents? Banks? Auctions? Gurus!? lol
I'm very open to criticism and discussion and would love to dig deeper into detail so please feel free to throw darts. I appreciate any feedback/advice/conversation I can get on the subject.
Thanks!