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Updated over 6 years ago,
Do duplex's like this exist?
To the good people of the bigger pockets community,
I have been putting a lot of thought into my long-term goals for using real estate to retire early but could use your expertise. On its surface, my plan seems fairly simple, but I'm not sure if the properties I am looking for actually exist. Could you guys provide any insight that could help me achieve or optimize my goals?
Goal:
Retire on cash flow of $75k/yr from 7 free-and-clear duplex's
Acquisition Plan:
Each duplex will meet the following criteria: market value = $180k acquired at 10% discount ($162k) with a conventional loan and 20% down ($32,400) @5% fixed rate over 30 yrs ($696/mo). Rent = $900/unit. C+/B neighborhood in an appreciating surban area with high walkability score, good school district, and low crime rate.
I would purchase each property as funds become available until I obtain 7 properties. Then, I would follow the debt snowball paydown method of paying off each property starting with the duplex with the highest interest rate by applying cash flow from all savings towards that duplex until it is paid off. Rinse and repeat for the next highest interest rate duplex until all are free-and-clear.
I have read many blog posts and a few RE books describing the process for narrowing down your target market starting from the 30k foot view and narrowing down to metro then city then neighborhood. I believe I have a system in place but this post is getting long as it is so I won't get into it now. That said after looking at many areas brought up here I haven't been able to find what I'm looking for. Namely, a duplex that can cash flow (0.9-1% rule) and appreciate (~5%). I have looked at CLE where cash flow is king but appreciation is simply nonexistent. I have also looked at areas known for recent appreciation (metros in GA, TX, FL) and I either can't find a quality duplex or they don't exist. Am I trying to have my cake and eat it too? If it does exist, could you kind folk please direct me to where I might find it?
Thank you kindly for any and all assistance!
Shane