All Forum Posts by: Kimothy Bynum

I left my w-2 20 years ago and the good news is, your passive income doesn't have to match your old gross income.  You will have less living expenses and less taxes.

Time freedom is nice of course, but have an idea of what you want to do.  Run to something when you run from another.
 

Wholesaling and buying BRRRR property

@Kimothy Bynum if you're house hacking a new property every year (as soon as you're eligible for a new owner occupant mortgage), then you're on your way!  ...however, a few caveats: it's one thing to house hack in a town with no appreciation, it's an entirely different thing to house hack in a town that's red hot. As they say: nobody gets wealthy off of just cashflow, they get wealthy via appreciation. 

For instance, I have a friend who has a portfolio of 5 properties (all of which he house-hacked); the total valuation is about $2.5 million...last year, his market saw 20% appreciation, meaning his net worth increased over half a million dollars in 12 months in just appreciation, and he didn't lift a finger. Even in a more normal year when appreciation is, say, 3%, his net worth would increase $75k in 12 months.  ...For comparison, he also nets about $45k/year in rent ...which is solid (and it's enough to keep him in a good position in terms of maintaining the properties), but it's nothing compared to the appreciation.  

Also, a key factor is obviously how much money you're getting from your current W2...if your W2 is paying you 3k/month, then replacing it with rental cashflow may be fairly easy...but if your W2 is paying you 10k/month, that's a steeper hill to climb...

Lastly, you mentioned that you felt it was "risky" to live off of cashflow, but in the very next sentence you ask about building (which can be a very risky endeavor!).  ...I'm wondering why you think it's "risky" to live off of cashflow?  ...I think it depends entirely on the cashflow vs. expenses; if a person has 20k/mo cashflow, and their expenses are only 3k/mo, I wouldn't personally view it as particularly "risky" for them to live off their cashflow...

On the other hand, building new construction in the midst of a rapidly changing market--now that's risky! (especially for those who don't already have significant building experience). ...there are just so many uncontrollable (and often un-knowable) things that can and do go wrong with a new build...  Obviously, experienced pros can, and do make money with new builds, but in the spectrum of safe vs. risky real estate strategies, I'd say new build is a bit more on the risky side (compared to a relatively simple strategy like house hacking, where the financial models have much fewer moving pieces)...

Good luck out there!

Hi Kimothy-

I love the hustle and the plan.

While I started later, the clear path for me is buying value add properties, rehabbing them (preferably lightly) and using the BRRRR strategy. Buy Rehab Rent Refinance Repeat.

I am fortunate to be within an hour's drive of a market in Michigan where I can buy properties like this and again next year with $500 monthly positive cashflow after paying a property manager to manage it.

Love the hustle. Best of luck. Happy to help!

No such thing as too late, especially at 40. If we average 80 years of life you're only halfway there. If you were able to add 1 house a year or every 2 years by the time you are 50 you can have 5-10 assets to your name! Do not let age discourage your decision to start on this journey! I am happy to chat about REI as I am quite new myself and am just getting ready for my first purchase. Reach out and lets connect!

 I'm not there yet, but the short answer is keep your expenses as small as possible and invest as much as possible. I am doing that by house hacking multiple properties over the next 12 years to ultimately hit that goal.

By 'retire' do you mean 1) just getting out of your W2 job? Or 2) no more work of any sort ever?

Either way I wish you the best of luck, but do you have any idea how much you need to have saved to retire at 35 and live for another 50 years?

@Kimothy Bynum just curious but what would you do if you didn't work? I wouldn't necessarily want a W2 but I need something to do personally

This is really inspiring to read as someone who is planning to have kids in the near future! If you don't mind me asking, how much are those 8 LTRs and single STRs bringing in per year net? 

I am 37 and plan to “retire” in the next few years. 
but having a baby and considering a second highlights the importance of health insurance so that is a concern in terms of totally leaving an hourly job, very expensive without help. 
I like my job now, I don’t dread it at least. But yea I’ll be leaving the city to go relax with my kids some day soon and do work here and there as I see fit, maybe open a food truck or a cafe, spend time with the parents and help them out with projects. 
and continue my real estate thing. 

it started with a condemned duplex and has turned into 8 LTRs and a STR.

One more killer deal and I’ll be pretty set. Even now I could raise the rent on my tenants enough to cover my living expenses, but I like my tenants, they leave me a alone and pay on time and I make good money every month. 

Anyways, I’m with you and getting pretty darn close to there, but kids aren’t cheap and neither is health insurance so there’s that too.