Can I make 60k + in 5 years?

Question

Good morning BP crew! I have been bit my the real estate bug again about a year ago and have read some books and watched some videos during that time. (I was a real estate agent about 5 years back) I now want to get into real estate investing. So I've upgraded my arsenal of knowledge again but not sure exactly the best way to go with my 5 year plan. I'm still extremely new to this and don't want to waist my time, energy, and money.

I have about 20k- 25K which I know isn't a whole lot to do with starting out. What do you think would be the best course of action to achieve this goal? Is this a realistic goal? What would your first property be and look like? Generally how many properties does one have to have to achieve this goal?

Thank you for all input. I know this is a totally newbie question but my hopes here is to set realistic obtainable goals and I know this is the best website around!

Thanks in advance.

Michael Ealy · Answer

Sonja,Welcome back to real estate.I am assuming $60K is $60K/yr in passive income?If so, YES, it's very doable.If someone like me who suffered through bankruptcy can come out of it - and after more than 10 years I've acquired over 1,000 apartment units - anyone can.You just have to have the hustle, work ethic and the belief that you can do it.

Grant Rothenburger · Answer

@Sonja Hibbler Your best bet at first, IMO with $25k is to partner with a flipper. Maybe you can finance the rehab in exchange for a slice of the profits. Do that a couple times until you can flip your own property. Or if you can find a flip now that will be profitable with a hard money loan, you could probably flip a house soon by yourself, but partnering is also good to learn.Once you have more cash, you can start buying long term holds for your 5 year goal. I would get more cash before buying up rentals.

Allyssa McCleery · Answer

@Sonja Hibbler yes, it is! It may not happen overnight but as long as you keep your focus on finding undervalued properties and being able to recycle your down payment you will eventually get to that point. Figure out what your investment criteria should be to reach your goals and don't deviate from that even when you start to get antsy because you haven't bought a new deal in months or even years. I put in 150 offers before I was able to secure my first property, which was undervalued enough that I could pull all that money back out and do it again. I would focus on getting really good at determining ARV and educating yourself extensively on estimating rehab costs. There are books that you can reference and youtube channels. You can also network with contractor-investors.

Allyssa McCleery · Answer

Partnering with a flipper would be a good idea because you will also get to learn about the rehab process without having to take the hits by yourself, and will be able to grow your capital. I got started by purchasing a single family house with hard money and fixing it up and then refinancing it 6 months later and pulling out al my initial capital. So then I had my money back, plus a house that was cashflowing and I could repeat the process. Being an agent will be very helpful in this because you will have a good sense of what the ARV should be.Also-- you WANT to quit your day job and just do real estate? or you WILL quit your day job and just do real estate? You are the one to decide what you are capable of :)

Sonja Hibbler · Answer

@Michael Ealy Thank you! I want it to be my primary income. I want to quit my daytime and just do real estate. I came up with that figure because that's the figure that I would feel comfortable quitting with I would definitely keep pushing from there. What properties would you suggest starting with? My short term goal is to have two properties by the end of the year.

Alexander Felice · Answer

easy to reverse engineer a goal rather than GUESSYou need 60k/year in NET incomeassuming a 10% returnyou need 600k in assets actively working to produce cashflow if you can earn 15% you only need 400K in working assetsnot impossibleyou're 1/16th of the way there cash, which funny enough is the easy part. The hard part is getting all that capital efficiently invested and producing regular incomealso, people generally underestimate the non-linear nature of progress. Meaning (for example) the first 2 years will be slow, the 3rd and 4th will be productive, the 5th will by monstrous, and so forth. You'll get better as you sink more time into this. stick with it, you'll do great

Michael Ealy · Answer

My suggestion Sonja is a duplex or a 4-unit. Start there. At least if one unit is vacant, another unit or the other units (if occupied) will still pay a part or even the entire mortgage balance. You can house hack them using the first time buyer's program if you want to live in one of the units and live rent free. You get landlording experience on a small scale (and low risk - of course if you do your research first and do a good due diligence on the property before you buy).Then you can scale up from there (2 units then buy 4 then buy 10-units, then...you get the idea).

NA NA · Answer

I say going from initial $25k initial stake to income of $60,000 is pie in the sky kind of stuff. Can it be done SURE. But not likely. Many of those who have done it surely werent stating with 2019 prices.Mr Cardone is offering mentorships for guess how much------$20k-$25k. Going BIG is a different kind of mindset.

Thomas S. · Answer

You should be able to achieve 60K per year with 25 - 30 doors assuming they all have solid positive cash flow of $200 per door. Not possible with SFH investing but doable with multi units. Whether you can do it in 5 years is entirely dependant on how you find money for the DPs.

Sonja Hibbler · Answer

@Grant Rothenburger I never thought about the idea of partnering up. That's a good idea. Thank you