I am sorry if this is annoying to ask, but I am a complete newbie and for now I am relying on this community to be my mentor. In short i would like to buy my first multi-family rental in the next 6-18 months. With a 16 month old child and one on the way in July I don't see any sooner feasible. Not to mention I am not at all ready, no not analysis paralysis. I have only just begun my homework and made this decision a couple weeks ago.

This is my first pass at my business plan. Please let me know what you think, feel free to critique, and let me know if I am missing any thing that is important. Thanks in advance for your help!

Side note: My wife and I's investment career will be ran on the side of our full time jobs as supplemental income on our road to financial freedom.

Real Estate Business Plan

Goal:

In the next 5-10 years buy and hold 8-10 rental properties or until resulting in about $2000 in passive rental income. At minimum $100 cashflow per door. Return on investment to be determined, but COCROI preferably over the stock market average.

Buying our first property within 6-18 months.

What types of Properties will we invest in:

Duplex, Triplex, Quads, to begin. Possibly trading up for small apartment buildings if it makes sense and opportunities are available. Would like to avoid single home rentals due to the hassle of buying, insuring, and managing one unit, but not opposed to it if there is a great opportunity.

Would like to focus on properties that need at least some work to receive a good purchase price. Also, the ability to force appreciate would be preferable to build up some equity.

Where?

Suburbs of Cleveland. More Analysis to come, but while starting out B cities or possibly on the boarder of B/C cities taken case by case.

How?

Down Payment will come from the equity on our primary residence and possibly some cash depending on how much saved. Putting 20-25% down.

This may change as we grow our portfolio.

Financing will be conventional mortgage loan from mortgage companies, at least in the beginning up to the allowable amount.

This will probably change and will explore options when the time comes closer. Portfolio lenders, hard money, and partnerships being a few options.

Property Management:

Initially we plan to manage the properties ourselves, having strict policies in place to make it efficient and easy for us as well as having the right team members. However, property management services will be included into our calculation for when we will want to transition or if we find out that it isn’t something we can do on our own.

What Needs to happen between now and first rental

Order doesn’t matter (except for #1):

1.Finish reading, research, and learning
2.Build our team
3.Network
4.Get approved for HELOC
5.Pay down credit card debt and build up cash reserves
6.Find mentor (may be highly dependent up BP community)
7.Practice analyzing properties
8.Determine common expenses and dollar amounts
9.Get all rental documents
10.Find potential deals analyzing 2-3 deals per day till at least 10 are found

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Newbie Business Plan for Buy and Hold Rental Cleveland Ohio

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