Hello BiggerPockets! 

My name is Nicholas, I'm from Michigan and am currently a junior in college. I've set a goal of having the option to retire at 26 years old (or just before I turn 27). I would like to have $6,000/mo in passive income, or $72,000/year. I know there's people who need more, but I figure this is a goal I can attain and put me where I want to be. 

I think the best way to achieve this goal is by breaking down the goal into easy measurable steps. I'm a big believer in the stupid simple formula, meaning if it's not stupid simple it's not for me. 

Alright so I've done some research and I figure I can cashflow about $300/mo on a single-family house. I'm from Michigan and there's a lot of $100,000 houses renting for $1,100-1,250 dollars. It's a very good state for cash flow.

So my goal of 6000 (goal)/300 (cashflow per house) meaning  I need 20 single-family houses (or units) in order to achieve this goal. I'll give you a bit of background and then tell you how I plan on getting to this goal. I ask for help at the bottom of the page because I need help on how to hit the goal. 

Background: 

Credit Score: 737 (this will be around the same when I graduate and start purchasing properties)

Debt: $0 (this will be the same when I graduate and start purchasing properties)

Savings available to be utilized currently at age 20: $10,586

Expected savings at age 22 (roughly a month or two after I graduate and I start purchasing my first property): $15,586 

Estimated Earnings at age 22 after graduation: $55,000 (I'm willing to work a second job and a side hustle in order to get my income to this level). This is also fairly conservative I will most likely make $60,000-$65,000. 

Savings Rate: 70% of my gross income ($38,500/yr) can be saved, I'm a minimalist and I don't require hardly anything to survive. 

How I'll achieve this goal: (broken down by age): 

Age 22: 

I'll have roughly $15,586 dollars to invest a couple of months after I graduate. This doesn't give me enough to purchase a $100,000 house at 20% down. So my plan will be to use a Home possible loan (5% down) or an FHA loan if needed to purchase a duplex (which will cost around $150,000 which I can afford with 5% down with my savings). I will live in one unit, rent out the other, (househack) as well as have a roommate on my side in hopes of completely eliminating my housing expenses. It may even cashflow but this house is mainly just to allow me to increase my savings and I can rent it out when I leave for ideally $200/unit.

I should have saved $38,500. This will let me put 20% down a $100,000 property that will cash flow $300. A lot of properties will only require small fixes that should take under $3000 to do.  I will hire a property manager right away. Based on many houses I've analyzed in my area and in Michigan, in general, I can put 5% repairs, 7% vacancy, 5% Capital Expenditures, 10% property management and still come out with $300/mo cash flow at the end. I don't want to deal with tenants. My primary focus will be acquiring more properties and working up capital. Also, even if a house doesn't cash flow as expected, I could pay the entire mortgage off in two years which will guarantee its cashflow. 

Summarizing age 22: 

1 duplex I live in: Cashflow $0 

1 Single-family: $300/mo 

Total Cashflow: $300/mo 

Cash leftover: $11,500 =  $38,500-20,000 (downpayment) -3000 (repairs) - 3000 (closing costs) - 1000 (cash reserves to leave in account in case of emergency to cover 1 months rent) 

Age 23: 

After 6 months I'll have saved $19,250 dollars. Combined with my $15000 from the previous year I'll have a total of $30,750. This will be enough for another 100k house 20,000 down, 3000 repairs, 3000 closing costs and then $1000 reserves in case anything goes wrong This leaves me with $3,750. Nearing the end of the year I'll be able to ave another $19,250 added to my $3,750 for a total of $23,000.  I'll purchase another 100k house (I'm assuming I got a raise or something an I can dip into the $1000 reserves I set for the other properties as well as cashflow from the others.

Summarizing age 23:

1 duplex I live in: Cashflow $0

3 Single-family: 900/mo

Total Cashflow: $900/mo

Cash leftover: $0 

Age 24: 

By this time I'm making $10,800/yr cashflow off my rentals. I'm assuming I'm able to increase my savings to $40k/year from my income assuming even inflationary raises. This means I'll have $50,800 to invest throughout this year. This will allow me to purchase 2 100k properties that cashflow $300/mo, assuming the same formula as before 
I doubled it for simplicity. 

$50,800-40,000 (downpayment) -6000 (repairs) - 6000 (closing costs) - 2000 (cash reserves to leave in account in case of emergency to cover 1 months rent). I'm actually $3200 short but I'm going to assume I can either pull equity out of another home or sell something to make this happen considering it's not that much money. 

Summarizing age 24:

1 duplex I live in: Cashflow $0

5 Single-family: 1500/mo

Total Cashflow: $1500/mo

Cash leftover: $0

Age 25: 

I'll be cash flowing roughly $18,000/yr plus my savings of $40,000/yr. I'll have $58,000 to invest. I'll copy the same strategy I utilized for Age 24 and purchase two properties. This time however I will also use a cash-out refinance on a couple of properties, allowing me to purchase one more house. 

I doubled it for simplicity.

$58,000-40,000 (downpayment) -6000 (repairs) - 6000 (closing costs) - 2000 (cash reserves to leave in account in case of emergency to cover 1 months rent). $4000 leftover to help with the cash-out refinance if needed. 

Summarizing age 25:

1 duplex I live in: Cashflow $0

8 Single-family: 2400/mo

Total Cashflow: $2400/mo

Cash leftover: $0-$4000 (depending on if money is needed to help with cash-out refinance purchase)

Age 26: My cashflow is $28,800/yr. Added to my savings of $40,000/yr and I've got $68,800 to invest. This will be a critical moment. I will purchase two more single-family houses which will leave me with $14,800.

$68,800-40,000 (downpayment) -6000 (repairs) - 6000 (closing costs) - 2000 (cash reserves to leave in account in case of emergency to cover 1 months rent). 

I'll leave the duplex, rent out the other room I was living in which will bring the cash flow of the duplex to $400/mo ($200/unit). Then I'll purchase a triplex of fourplex for with an FHA loan 3.5% down (this will cost roughly $250,000-$300,000). At 3.5% (of 250k or 300k) + or - closing fees I'm looking at $12,000-$15,000. I'm assuming I can live in a unit for free with the other 3 tenants covering the mortgage and all expenses plus giving me $200/mo cashflow. If not I can get a roommate on my side, I actually like having company and have some friends who are responsible who would room for cheap.

Summarizing age 26:

1 duplex: Cashflow $400

10 Single-family: 3000/mo

1 fourplex I live in: 200/mo

Total Cashflow: $3600/mo

Cash leftover: $0-2000.

Where I need help: Some Questions I've got. 

That's my plan. As you can see I'm $2400 short on cashflow. I'm not sure how to close the gap. Maybe I could use more home equity or cash our refinance than I assume? Maybe I can somehow put less than 20% down for the properties? Would I put these In an LLC? Multiple LLC?

I think I was fairly conservative with my numbers, especially because I'm tucking away 27% for CapEx, repairs, Property Management, and vacancy. That might free up some cash. I also like tucking away the extra $1000 just in case **** hits the fan.

If I'm able to earn $60,000/yr+ I can get a bit closer, but still, I need help closing the gap. Either way, this $3600/mo is enough for me to retire on. As I stated above I'm a minimalist, but $6000/mo is where I want to be. 

If you have any advice let me know!

Sincerely, Nicholas