The Math for your Real Estate goals?

[Craig Moore]

Hi BP,

I'm wondering if you all can advise me on the proper way to set-up my goals and make sure the math makes sense. I had this figured out about a year ago (before I even had any capital), but have since forgot the method. Here's an example:

I'd like to have at least $10,000 a month in rental income. I would like to be a buy and hold investor. I believe I read somewhere that you should take your goal and divide it by $100 per door. Is this true? Would that mean I'm dividing $10k by $100 leaving me at 100 doors? So that is translatable to: 33 3-family houses, or 50 duplexes. Do I have this math correct? What are some other ways I could reach this $10k per month number? I'm giving myself a 6-8 year window.

Thanks for your help!

[Joe Villeneuve]

No, that's not the way to do it...unless you want to die from exhaustion before you turn 40 (or earlier).  That $100/door is an arbitrary number that is based on your market.  This is how you do it:

1 - Add up all your monthly bills
2 - Figure out how many doors you want to handle in total
3 - Divide #1 by #2 above...that tells you what you need to get per door.
4 - Go find a Market where these deals are, and...
5 - Camp out there.

                            ....or....

1 - Add up all your monthly bills
2 - Figure out what the average $$$/door is in the Market of choice
3 - Divide #1 by #2 above...that tells you how many doors you need.
4 - Go find a good Doctor, and...
5 - Camp out there....this is NOT the way to do it, but many do unfortunately.