100k income in 7.5 years

[Derek Horn]

So a buddy of mine introduced me to this site a few months ago and I have been reading and trying to educate myself ever sense. It’s honestly a little overwhelming so I figured I would finally post and seek out some advice.  A little background on myself, I’m currently in the military and will be able to retire in 7.5 years. We currently own two homes and will be closing on our third towards the end of the year when we move. We are planning on moving to Jax Fl when I can retire. 

With regards to what we have, one house is rented, the one we’re in now will be put on the market at the end of the year, and then we will be living in the third for 3 years until we move again. First two homes are located in Goldsboro, NC and the other is in Wichita Falls, TX. 

So here are my current numbers and what I have to work with. I would love to hear some suggested reading or approaches to reach my goal. 

First home: 1016 PI+TI rented out for 1150 with 8% due to management. 0 money down w VA loan.

Second: 1095 PITI, should rent for 14-1500. 0 down w VA loan.

Third: 1100 PITI, I receive 1370 for housing, so I'll be saving the $270 as if it's cashflow.

We have $150k in savings to cover any future investments/repairs/etc. 

So at this point, I’m curious how you guys would proceed? Would you stick w Wichita Falls since I’m still new or start in Jax instead since that’s were we will move to? Obviously I’m going to stick w management companies since I’m not local so that will eat into my cash flow. Finally, I would prefer to be $100k w/o my retirement pay, but if that’s not doable, then I should have an additional $30k coming in which would only require $70k. 

-Derek

[Jeremy England]

I'd sell the first one, you aren't cashflowing enough to cover all expenses.  You could likely even take a small loss, reinvest those funds toward 2 or 3 less expensive properties.  Just make sure you are cashflowing.  A good rule of thumb is 40-50% of rents will be used for expenses.  Then debt service.  

Property mgt: 9%

Vacancy: 8%

Maint: %5

Capex: 3%

Property taxes:??

Insurance: ??

THEN debt service.  What's left will be cashflow

A true cashflowing property means you have all bills accounted for, and do not have to lift a finger, its true mailbox money.