Where do I "stack up" against other investors my age? 6 YR PLAN

Question

Hey everyone, I wanted to post this thread and discuss our short term and long term goals. I'd be very interested in hearing other people's goals to see where mine stack up for my age. I am 23 years old, currently own 2 duplexes, 1 free and clear and 1 house hack with a mortgage, I make approx 50k a year right now, I don't plan on buying alot of units because I don't want so many that it becomes a large headache, my number of target units is 12. I have 4 now and plan to buy two 4 unit buildings early next year with 30 year mortgages putting 20% down on each, then taking my current salary plus the cashflow and paying off both properties which I have calculated should only take approx 5 years, maybe 6. At that time, I should be getting approx 52-54k a year in net cash flow on all of my rentals which essentially replaces my current salary and I could retire at the ripe old age of 29 but I plan on continuing to work, but only about 1/2 as many hours, manage my rentals and enjoy a nice lifestyle with my family. Is anyone else here on BP possibly "retiring" before 30, and by retire I mean the ability to quit their job and keep the lifestyle they want.

Tom V. · Answer

Being 23 and actually having any long term goals at all puts you head and shoulders above the majority of people your age, not to mention you already own real estate and have plans to buy more. Congrats on your excellent progress so far, and best of luck to you as you climb that mountain to early retirement!

JR T. · Answer

You're doing great for your age and showing excellent money management skills. Keep up the hard work.

Alex Franks · Answer

@Samantha Klein think it is a great plan to bad I 43 but do plan on retiring by 50. To be honest once you enjoy some thing. I think you will always continue to do some thing in the business.

Good for you to be younger , motivated , and having a pan.

Alex

Michael Haynes · Answer

Nice work is right, Samantha. I'm in Tampa, Fl. and I can't imagine having to do all the work that I had to do to keep my rentals going for thirty years in the kind of weather that you have up there. My girlfriend is from Milwaukee and everyone we know from there is trying to escape the cold. The basic thing that I see is that you are putting down a lot of down payment money, which does eliminate the mortgage insurance and using 30 year loans which gives you a way to pay less per month and pay down the mortgage on the backside. You must have a good job and an education at an early age, so you got that part done right. But, the reason to buy real estate and keep it as rentals is to Create Wealth and not give yourself another JOB managing your rentals. No one seems to say whether they are doing all the work of managing and repairing etc. their rentals. I used to have a handyman that I could afford. Can you pay $15 to $50 or more an hour for guys to do the repairs for you? 10% of your gross rents for the rental manager who charges for each letter, telephone call and any visit they have to make out to the property? The basic idea for me was to buy five, financed by the owner or creatively as possible. The rents have to be positive enough to help buy five more. You get ten and keep them going for ten years. Then, at the right time, which is the height of the R.E. Market, you sell the five worst properties to fix up and pay off the best five and retire with a million. I did that twice, but, got caught in the 2008 economic collapse and lost 60% of my property values. So, I almost got ruined on the way to where I am now on my second try for the million. I am now selling to get completely out of debt and end up using the Residential Sale Rule to live for two years in one house and sell it tax free to move into another for the rest of my life. I will be building new ones to live in and moving onto another one if I can free up my commercial half acre before we have any more problems as I run out of rentals to live in and sell. The point is that you start a business, any kind of business, to have the business make money for you. If you have to micro-manage the business, then you are just creating a JOB for yourself and you may be better off just keeping your job. Managing rentals is a really exhausting JOB and when I could not afford to pay handymen and managers I ended up with a 24 hour a day headache. So, the rental business has to be big enough, have enough positive cash flow from the rentals to be able to pay other people to do all the work for you. That includes your Accountant and Lawyer and Eviction specialist etc. Then, you turn into a Robert Kiyosaki, or Carleton Sheets who can afford to be an absentee owner who buys and sells properties all over the country. I never wanted to be that big. I don't want to be a Donald Trump. It was just a basic plan where I would have a Real Estate Portfolio and learn how to make money with money by learning how to Trade and Invest in the Markets. Now, I want to get out of the rentals and rid myself of the tenants and just use the Residential Tax Rule to live in a new home to sell in two years and trade Futures on the computer each morning session. I worked on oil tankers and taught myself to invest in Mutual Funds and in ten years I made $100,000 out of that to buy, financed by the owner, all my rentals for my retirement in Tampa. So, now, I can stay home and type on the computer in the mornings and make a few hundred each day for my Daily Cash Flow and get away from the rentals. The real estate has to Create Wealth for you and later you can learn ways to make money with the money. That's the goal.

David K. · Answer

Nice work! I'm 37 now, tried doing the same thing at your age.  Problem for me was the market skyrocket in such a short time, I was priced out.  I'm liking your paying things off strategy.  That way you'll never really overextend yourself.

Ryan Canfield · Answer

@Samantha Klein Hi Samantha, congratulations on your success so far!  I think for being 23 you've accomplished more than most people will in their lifetimes.  I think you have a very reasonable goal and you sound like you have a good plan to help yourself accomplish your goals!  Even if you are only able to get half way to where you want to be, you will be setting yourself up very nicely in the future.

My wife and I are both 29, we are house hacking our second property.  We have 5 rental units total, 6 when we move out of our apartment from one of the units and have mortgages on both properties.  Our goal is to buy 10 properties to have a total of 30 units over the next 15 years.  At this point in time, we both like our jobs and do not have any desire to leave them.  We are trying to bring in additional money to help ourselves in the future and to give ourselves options when our future kids get to be college age.

Chris T. · Answer

congratulations @Samantha Klein

You're doing great! keep doing what you are doing and you're well on your way to financial freedom.

Where do I "stack up" against other investors my age? 6 YR PLAN

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