Next Move

[Dave Nay]

Hi Folks,

Josh,Brandon and everyone else THANK YOU!!!!

What an awesome site you guys, and gals, are crushing it! Everyone I see that is even remotely related to Real Estate I rave about this place 9 times out of 10 they get pen and paper and write down the address.

Ok,

About me, I am a 49 year old truck driver who's pension, for various reasons, is going down the toilet! My current gross income is about $70k per year.

I decided after reading Rich Dad Poor Dad....I know it gets mentioned a lot around here...lol

I knew I needed to take control of my finances.So After listening to all 109 pod casts, some several times, and reading/listening to audio books I decided to start a Real Estate investment Co.I like the idea of passive income from a buy and hold strategy.

I have $25k in cash from a HELOC and about $10k in credit cards that are all paid off.

My goal is to be able to stop driving in 10 years and manage my properties.

My immediate goal for this year is to purchase my first multi family and have it rented by years end.

I really like the Charlotte NC area since you can get so much more for your money.

I currently live 30 miles NE of Philadelphia Pa and prices are a bit high around here.

Brandon has said several times that you should be able to find something affordable within a two hour drive from any market.

I guess what I am looking for is some feed back, as to, weather or not my 10 year goal is to lofty, and also, what should my next move be?

Since, I only have $25k in cash what price range should i be looking at in order to have a modest cash flow from the start?

Thanks again for everything,

Dave

[John Matthews]

@Dave Nay welcome! 

I found BP the beginning of the year and I've got 41 podcasts to go, that's impressive. Though I guess you spend a bit more time than me on the road huh...

I would say, it's not a lofty goal at all. My goal is to be able to be free from my 9-5 within the next 12 years (ie. be able to generate about 50k of todays dollars after taxes) and it looks attainable. Look at it this way - if each unit is spitting off $150 / month net you only need 28 units or 14 duplexes. So you'd only need to buy 2-3 duplexes a year for the next 10 years. If you can put away $15-20k per year between rentals and your job I think you should be able to hit that no problem.

On the note of prices in the area, I actually think it's pretty cheap around here. With conventional financing, you can get into a cheap duplex in north philly, west philly and norristown (I'm not sure I'd recommend blindly buying in those areas, but there are some areas worth looking at) - I know because I have about the same budget and am looking for the same thing!

As far as price range, if possible (I don't know your situation) I'd try to owner occupy a good multi - you should be able to get a 4 plex for around $150k or 7.5k down. Then depending on your patience level and risk tolerance you could either keep looking for another conventional mortgage place (20% down) for about 85k - that could get you a duplex or triplex, location depending.

If you can't owner occupy (can't move for whatever reason) then I'd shoot straight for a place in the $125k range. That should set you up for a triplex or quadplex location depending.

Note: you definitely want to have cash reserves for emergency payments, but I didn't factor that in - so you may want to curtail your purchasing a bit depending on the amount you want to have sitting around.

Anyway, let me know if you need anything in the area and best of luck.