Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Starting Out
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 8 years ago on . Most recent reply

User Stats

15
Posts
3
Votes
Jan B.
  • München, Bayern
3
Votes |
15
Posts

Can this be made to work..?

Jan B.
  • München, Bayern
Posted

Hi there -

Sorry if this is a pretty broad question but we're just about to get started in REI and after reading a lot about the topic - and listening to a ton of episodes on the BP podcast - we're currently figuring out our strategy going forward.

Our ultimate goal is to build a small portfolio to generate income for retirement.

So in a nutshell our current idea/strategy is to..

  • Invest in rental properties,
  • Ideally small multi-family (duplex, triplex)
  • Finance 75% on a 15 year (as we're no longer in our twenties..)
  • Monthly cash flow should be about 100-150$ per unit starting from day 1

We'd like to use the latter to retire early on a frugal lifestyle using the cash flow and possibly other streams of income before the properties are debt free!

And that's just where we are currently pondering if our strategy is feasible -
As we'd like to use a 15-year mortgage and savings allowing us to come up with 20-25% of the purchase price up front we did some number juggling.. using the BP rules for rentals, i.e. 

  • roughly 1% in monthly rent, and 
  • 50% of the rent usually going towards expenses, insurance, vacancy, etc. 

that leaves just barely the amount required to cover the mortgage payments.

So we'd like to run our idea against you folks to get some feedback -
Is it too ambitious/unrealistic? Or could it be made to work when finding just the right deals?

All feedback appreciated!

Cheers,
Jay

Most Popular Reply

User Stats

15
Posts
3
Votes
Jan B.
  • München, Bayern
3
Votes |
15
Posts
Jan B.
  • München, Bayern
Replied

Hello @Quoc Tran,

thanks for the feedback!

Being new to the REI game our basic motivation was to maximize cash flow in retirement with debt free properties.

Passive income for our retirement via rents is what we're aiming for - getting a similar cash flow with non debt free properties would require 3-5x the number of properties, wouldn't it?

Sorry, as I've mentioned we're complete newbies with what I suppose must be a 'natural' preference to be debt free, eventually.. 

Happy to hear about different takes on this!

Cheers,
Jan

Loading replies...