Too many options! Where do I start?

[Kelley Ogletree]

My position can't be unique... I have a 6-figure W2 income but really will never be able to retire on it. As a single mom, I made every financial choice based on my kids needs at the time. We have a great life and I raised fantastic humans, but I never planned for my own future. So, here I am at 50 years old with adult kids and no retirement. I would LOVE to be able to leave my 9-to-5 in the next three to five years. My dream is to have STRs for cash flow to support myself and for personal use, but I don't know if I should start with that or maybe BRRRR a house or two (or more if I love it) to generate funds to get into the STR game. There are so many different ways to get started in RE investing and I don't have time to make the wrong decision out of the gate. I'm hoping someone on this forum will be able to help me narrow it down. Here's the down and dirty of my current situation:

$100k+ annual W-2 income, but a maximum of $750/month available to invest

$30,000 in the bank

$140,000 equity in primary home (selling my house is not a step I am willing to take)

Below average, but not horrible credit score (my son wants to do this with me and he has a good credit score, but not much in savings)

BRING ON THE ADVICE! Thanks!

[Marcus Auerbach]

Bad news first, it takes usually 8-10 years to replace ones W2 with REI. Some have gotten there faster, but that's not the norm. And it is simple, but NOT easy! Also, the work never stops. Real estate is not as passive as you may think, once you have a portfolio big enough, you realize that it will keep you pretty busy, at least until you get to the last phase, which is where draw from the equity. And STR is basically a job (hotel manager)!

Good news: it can be done. Start with the right mindset: most people overestimate what they can accomplish in one year, but underestimate what they can do in 5! So start with patience. The first thing to do is to learn to manage your own finances, including your credit. If you fail to do that, your financial habits will just amplify your financial problems. REI is not the solution to a low credit score. Financial literacy is a requirement for REI success. Plenty of books, videos, blogs on the subject.

In terms of REI strategy. They are all good, pick one that plays to your strengths. It's like working out, if you hate running, you will not run for more than a few weeks. If you love yoga, you will probably be able to do that forever.

The ultimate goal is to create equity, but you need cash flow to get there. STR can be a path, but you can also pick another side hustle. I am not a big fan of leveraging your house. And $750 is not much. That's only 9k a year or 90k in ten years - any way you turn it, there is no way to build a real estate portfolio with that.

Try to cut down your living expenses to half of your income and then pick a side hustle to make an extra 5k per month. Flip couches, consult or sell real estate, whatever it takes. Now you have money to invest, buy one property every year until the additional rental income allows you to buy 2 properties every year, etc. You will need about 40 doors to replace your W2. I know that can sound overwhelming, but it can be done just one step at a time.