10 year retirement plan with multifamilies

[Audrey C.]

I need some help with a 10 year plan for retirement that works in theory and on paper but I’d love some feedback.

I have some $$ from the sale of a property that I’ve been wanting to reinvest in RE but haven’t pulled the trigger. To that $$, I’ve been contributing about $500/week from my W2 job and I now have about $240k to work with. I already own my own home outright and my credit score is 800+

I’d like to acquire 3-4 multifamilies in appreciating markets (in CT) with 20% down ($60k). I’m running numbers on a $300k purchase cost and $240k conventional mortgage at 6% (optomistic by the time this all can happen). With making an extra $500/month payment on each of the units, I could have them paid off in just over 10 years, which puts me at retirement age. The net cashflow at that time would be used as true passive income. The properties would have appreciated for 10 years and if needed, I could sell 1 off.

I’m struggling to calculate the purchase price point and rental income needed (along with accounting for cap expenses, vacancy, PM, repairs etc.) in order to target the right properties to make this happen. I’m more interested in buying in areas of appreciation than the actual cashflow during the 10 years (as long as it doesn’t negative cashflow). I know there are different views on this strategy but for example if each property net cashflowed during those 10 years at $500/mo, at the end of 10 years that would be only $60k. Because I don’t need the cashflow for income right now, I’d rather concentrate on the appreciation. I’m open to suggestions and other insights! Thoughts?

[Samuel Eddinger]

@Audrey C. - what you are suggesting is basically what I did for the last 10 years in CT.  I now own over 20 properties.  For most of them I have 60% or more equity because the properties have appreciated so much.

What you will find is that for the first few years it will be hard to make any money as you reinvest in the property (strategic remodelling, capEX needs that inevitably occur, and tenants that trash the place - make ready).  After about 5 years or so, you'll start to see gains and then after 10 years, you will start printing money.

@Brandon Rush and @Joseph Salzillo are the realtors that I would most recommend to help with this.  I'd be happy to talk more about my journey if you want to DM me.