What do you think about my master plan?

[Matthew Bailey]

Hey everyone, my name is Matt and I'm new to the bigger pockets website. I live in Sunnyvale, California and I'm looking to build wealth and eventually achieve financial independence through real estate investing. I'm coming to bigger pockets after listening to the first 23 podcasts to fill in some of my knowledge gaps (pretty sure I'm going to listen to every single podcast by the way haha). I've read a bunch of books on different topics and I've got a whole bunch more stacked on my desk ready to go! I'd like to lay out my plan and see what you guys think. The problem is, I'm not sure what kind of numbers to expect in the bay area. So here is the plan and hopefully some local investors can let me know what to expect out of a rental/flip/wholesale/etc in this area.

I am particularly interested in multifamily properties to build cashflow. Of course in the bay area those are expensive and I don't have the money to get into those just yet, let alone purchase multiple properties. Therefore, I have determined that I need to use some other means to generate the capital necessary for the down payments for those properties, i.e. flipping and wholesaling. Eventually I would like to be cash flowing enough to retire and live off that income. This is where I begin to lack specificity in my master plan. Let's say I can get my hands on a quad for $1M. How much cash flow per unit should I plan on for this property, in the Silicon Valley, to consider this a good deal? Let's say due diligence completed, how much would a typical investor in my area expect to cash flow on each unit in order to make the deal? $100? $200? etc. These numbers will help me determine how many units I will need to acquire to reach my monthly cash flow target.

Once I know how many units I need, I can begin to determine how much capital I'll need to raise/create in order to acquire those properties. If each property is $1M and I need 200K to get in, how many flips or how many wholesales would I need to accomplish in order to acquire my income producing properties. This is where I'm hoping some local flippers and wholesalers might read this and say "if I can't make 40K or 60K or X amount of dollars on a flip/wholesale, then I won't go in." This will help me determine how many properties I'll need to flip/wholesale to reach my goals. I understand each property is different, I'm just hoping someone can chime in and say, "well, if you need 200K that's going to be # of flips in your area."

I am working on nailing down my due diligence by visiting and evaluating properties and trying to nail down rehab costs. I'm just not sure what type of profit margins local investors would accept or decline so that I can learn what my master plan really needs to consist of.

Thanks to everyone who takes the time to read this and I look forward to any and all feedback!

Sincerely,

Matt