Beginner with ~$110k to invest. Roast my plan.

[Jeremy Harris]

Me 30(M) / SO 29(F)

I've been digging pretty deep into our financial independence numbers for a few months. Our FI number is around $650,000 with a little flexibility built in. The last month or so I've been digging into rental real estate and put together this rough draft of a plan. I don't currently have any properties besides our own house that we occupy, so I'm definitely going to continue studying before pulling the trigger.

Target amount of property owned free and clear: $500,000

If all properties are exactly at the 1% rule total annual profit will be: $30,000

This amount of cash flow would be more than the 4% rule would give us with our current target FI number. We currently live on ~$23,500 with a mortgage payment, so if we could FIRE without a mortgage, either the FI or RE number would be way more than enough to live comfortably.

In 12-15 months, we will have a quasi-windfall amount of $90,000. I am getting paid out over the next year for selling a business, and I will be liquidating other business assets that weren't part of the deal. With some other liquid assets we have laying around, we will have around $110k to put into rental properties. I want to use almost all of that money to start building our portfolio. We have a really close family friend that is a contractor in a great rental market (Low cost of living, multiple universities, low unemployment, retirement destination, and military base close by), and another friend who is an electrician in the same market. I would like to use both of them as a resource, because I know that they do good work. Whether or not they are the cheapest option, I know that I won't be getting screwed over by a contractor and shoddy work.

I'd like to use around 75-85k as down payments on houses (at 20% down that would get me around $400k in houses). Then use the remaining ~$35k for repairs and other miscellaneous costs. Is that ratio too aggressive? Should I do more around 50/50 for down payments and repairs? I would hire a PM for all of these properties, because we will not be living in this market, but I could spend a few months living here in order to set everything up.

Ideally the plan would be to pay off all of those mortgages in the next 15 years by using a vast majority of our savings and any cash flow to snowball the mortgages off, and hopefully pick up another $100-200k in properties. With other retirement savings throughout that time, I feel like we would be comfortably FI.

What am I missing in this plan? I know there are some deep concepts that I probably haven't encountered yet in all of my studies, but I probably wouldn't buy any properties for another 12 months or so. Any critiques or comments are greatly welcomed. Thanks so much!