If you had these resources...what would you do??

[Joel G.]

My wife and I want a different life...where we are not accountable to anyone but ourselves...who doesn't right?

If you click on my bio you will see our basic background and goals...short...I promise. 

We are not beholden to any REI discipline and do have some skills.

We have a SFR in Las Vegas that is rented to a family member for cost...so no cash flow, but well kept and debt pay down and has approx $70k in equity and can be disposed of as necessary. We have a home in Silicon Valley with approx $200-250k in equity (depending on which RE Agent we speak with) and which we are willing to sell to help bankroll our business. In addition, we have approx. $250k in 401Ks we are willing to structure in a way that will allow us to get at...at least 50% or more (at least that is what we have read here). We would love to leave our jobs but are willing to stay to facilitate things. Our salaries are around $200k combined.

Tammy and I are in our mid/late 40s and our goal is to be able to have enough freedom to travel and take care of our families while we still have our health and are young enough to enjoy those experiences...whether that takes 5 yrs or 25 yrs. 

We aren't strangers to hard work and are willing to do so to get started.

So if you were starting over and had these resources and the willingness to use them...what would you do??

[Arlen Chou]

@Joel G. I am in my 40's and just started seriously getting into REI recently, but I had been planning for a long time. When I say planning, it was not just reading books and listening to pod-casts. I started with "house hacking" and building up cash for a very long time. I used the appreciation in my primary residence and dove deep once I had the financial strength to make a meaningful purchase.

Replacing $200k of income is pretty large gap to fill.  Not sure if you are considering NET or Gross income as the $200k target, but both are achievable.  My intent is also to get to a point where I can travel and enjoy life.  For me, that means not being active, but collecting passive income = buy and hold strategy.  For others it might be a different strategy.  

Cash flow is the key to reaching a passive REI business... This then leads to the debate of cash flow vs appreciation. In principle I think real estate investors all seek cash flow, but how we each get to that cash flow is really core of debate. For many it is to go out of state and look for cash flow right away. Personally, I believe the limitation of that strategy is that ability to accumulate assets is limited by your access to cash. Meaning you either need to either work your W2 or go looking for investors to build up cash to buy additional properties. I feel that by investing in a strong market, you can take advantage of both cash flow and appreciation and accumulate assets at a faster rate. The barrier to entry is much higher, but once you get past that barrier, I believe that appreciation can give you the cash freedom needed to purchase more properties.

Please note, I invest locally and trade my time for sweat equity in forcing appreciation.  I don't do turn key purchases because I believe that the lost appreciation is too expensive.  There are couple of threads on BP about the appreciation I have seen over the past 10 years along with my referencing strategy.

This is an active strategy for me so I really cannot say what I would have done different yet.  Perhaps the only thing I would have liked to have done was taken the leap at a younger age.  But there are many things that I wish I had done when I was younger...hahaha!

Good luck!

-Arlen