Retire in 10 years after exiting military

[Felipe Lopez]

So I am exiting the military and my goal is to retire in another 10 years from investing in real estate. So far I own one rental property in El Paso, TX. I currently have $70k saved up and I am trying to figure out the most logical way to have a positive cash flow of $3,000 in 10 years. I will also have a job in the oilfield making about 80k a year but I want to stop working after 10 years. Where do I start and which way would be the best to invest my $70k into real estate? Also, I will be in San Antonio, Texas.

Thanks,

Felipe

[John Barr]

@Felipe Lopez  

You are off to a great start! Having that kind of cash reserves and a great W2 income puts you far ahead of the vast majority of people that are wanting to get into this business. One thing I will tell you that most people don't do right is the quit their job WAY to early when their goal is to buy and hold. Having that W2 income is essential when needing to get good 30-year loans.

San Antonio is a great market for cash flow which is what you are needing to target to reach your goal. San Antonio has a very stable market when it comes to appreciation in both cash flow and equity appreciation. Having a timeline of 10 years is very doable. 

I am often asked when is a good time to buy real estate and I will always reply. "Anytime is a great time as long as the deal makes sense today"

For example. Right now South Central Texas (Austin and San Antonio) are said to be the most overvalued residential market in the US according to Forbes. So let's say that you buy two to three properties right now (which is possible given your reserves) and we have a price correction and values drop 10% and you are underwater for what you have put in. I will say two things to that.

1. BUY CORRECTLY! If you are targetting cash flow and buy it where it makes sense today the equity play will pay out in the long run as markets appreciate an average 4% a year over the long term. So what do I mean by buying correctly? Make sure that you have a decent amount of cash flow coming in over your loan value. Most people that I know that have been very successful in this business want at minimum $300 a month over their loan payment. This will make your investment a self-sustaining one. Having good cash flow is an essential to making your investment career a long one.

2. When prices of real estate are sinking rental rates are typically rising. Think about it. If the news is saying that real estate prices are falling across the country do you think your average buyer is going to want to buy a home? Rents are countercyclical meaning the often go up instead of down in hard economies. This is basic supply and demand. If people want to rent and not own because of falling prices that means there are more renters in a market. The only time this doesn't work is when people are leaving an area. That is not the case in San Antonio and much of the southern region of the US. 

There is so much that goes into buying property. You want the right areas, getting the right tenants, managing the real estate, managing the tenants, buying in the right price ranges, cash out refi's, 1031 exchanges, and the list goes on. There is to much to type in one post. If you would like more information please get ahold of me. More than willing to talk more.

I put out my own market reports for SA every month and also have a breakdown of the entire SA area broken down by zip code that gives my opinion of where each area is best for which strategies. I am more than willing to send out both to anyone.