"Retirement" Suggestions

[Joshua Minczeski]

I write today seeking advice from you guys who's compounded experience may help me devise a strategy early on. 

I want to get started investing in real estate investing and would like to come up with a plan that will put my family and I in good position for the future and want to start asking questions to get good advice and something to begin working towards.

So the question; Starting today even though may be "impossible", how would I create $100,000 annually in "passive" net income from Real Estate investments in the next 10 years or less? Like I said, I know not easy, but if you HAD to do it, how would you?

My standings currently:

25 years old (26 this month)

Licensed Real Estate Agent

Under Contract to buy 1st personal home, closing set for May 6th, home in an area due to appreciate in the next few years

Limited credit history (about a year) around a 680 or so score (bc of history)

No "major" debts or loans (owe about 20k on my truck, in a positive equity position)

Good income potential with job as an agent

I want to start asking these questions now so I can know what I need to set my sights on. I hear a lot about multifamily but was wondering is it ok to start small and pick up lower priced properties earlier on or do I wait and save more and go for the big multifamily properties and wait longer?

Any advice is greatly appreciated and thank you in advance!

[Brandon Hall]

@Joshua Minczeski I truly don't mean offense by the following, but have you considered that you may not be truly committed to your investment goals?

You told us about your passive income goal and it's awesome that you are looking ahead. There are several important aspects of the wealth building formula, but the two most important are (1) expanding your income and your income streams and (2) decreasing expenses.

You have solid income potential, so you have part #1 partially down. But then you follow-up and tell us you are closing on a house (hopefully what you meant to say is that you are going to live in one room and rent out the others) and that you have a $20k note on a truck.

Get rid of the truck.

There's literally no point in owning your truck other than showing off to your friends. You didn't indicate that you have a need for a truck (i.e. carrying materials to flip homes) and you indicate that you are a realtor, meaning lots of driving, meaning lots of gas. Not to mention that the truck's payment alone will push your retirement goals back several years (that's called opportunity cost). If you need a nice looking car for your realtor biz, there are plenty that will come in at half the price of that truck.

Like this 2008 Honda Accord w/ 100k miles for $8k . And it will last you another 200k miles (read: 10-15 years).

I'm around your age, and so are many others on this board. I'd recommend reading a few of the articles @Scott Trench and I write for the BP blog about the concept of living below your means. If you want to retire in 10 years, it's critical you start implementing gratification deferral practices into your every day life.

When you truly commit yourself to building wealth so that you can retire at age 30 or 35, you will naturally being to understand the concept of deferred gratification. You'll begin to build wealth exponentially and laugh at the suckers who are spending excessively.

The only downside is that when you're 35 and chilling on the beach in St. Johns, it will be difficult to explain to your friends how you got to where you are because the concept of wealth building will be so far removed from their lives.