Just starting out. Is this a realistic goal?

Question

Hi everyone! This is my first post here on Bigger Pockets – I'm excited to join the community!

I'm just getting started with real estate investing and like many other beginners, I'm feeling pretty lost.

I've defined a goal for myself, but I'd love to hear your opinions on how realistic my goal actually is.

I'm thinking I can live very comfortably with $5,000/mo in cash flow.

If I want to achieve that in 10 years, I'll need to purchase one cash-flowing property every 5 months or so (given that it cash flows $200/mo).

Of course, this is a "perfect case" scenario and it probably won't turn out as pretty as this. But do you think this is a realistic goal to aim for?

I'm also hearing lots of different opinions on cash-flow vs net worth (i.e. buy cash flowing properties VS buy for appreciation & then consolidate to a MFH later, etc).

Any advice and/or critiques would be much appreciated!

Thanks so much in advance!

Jack Dalrymple · Answer

100% realistic, no doubt about it. I know people that were teachers two years ago and now have 70+ units and are full time.  Others have been doing it for a few years and are contemplating spending some months abroad because, well, they can and why not.  On the other hand, there are people who bought a condo 20 years ago and that's as far as they've wanted to take it.  If you really wanted to, it's feasible to get 25 units that cash flow $200 in one transaction.  It could be an apartment building or an investor looking to unload their portfolio of single-family rentals.  The pace at which you proceed is solely dictated by your choices and what you're comfortable with.

In terms of cash-flow vs. appreciation, if your first real sentence about what you're doing is a $5k goal, you're probably leaning towards cash-flowing...

Corey Hawkinson · Answer

@Johnathon Kim You’ll find plenty of people who got to 87,469,412 units in 2 days through using no money of their own on this site and others. I’m not one of those people. My recommendation is to have a goal in mind for where you want to get to, but also just have a closer goal in mind. Just focus on what you want to do and how you’re going to get that first property. Don’t worry about properties 2-50.

Also understand that this can sometimes build off itself. Buying my first rental property took more effort (mental effort mostly) than my 4th.

There are several routes, and this site has great information on all of those routes. Pick the one that’s best for you and start there.

Johnathon Kim · Answer

Account Closed Thanks so much for your advice. I'll go check out the areas and narrow all of my options down to one market.

Jerryll Noorden · Answer

My dude..

NEVERRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR ask "other People" the limitations or how realistic your goals are.

You know what people told me my first REI meeting when I told them I  want to do deals in the entire CT?

Them bishes told me "dude you are never going to make it. Chose a smaller market".

I just looked at them and smiled.

I locked myself in my room and 3 months later I got out of my room. Granted I smelled like unwashed monkey butt.. actually I am pretty sure I still do..

BUT that is not important:

I own CT online! CT is my bish!

Now all those bigshot pricks are scrambling around trying to get leads. I wipe my monkey butt with leads! Calm down Jerryll. Calm down. Breathe...

OK

So where was I.

NEVER ask anyone else if a goal is realistic.

SET that damn goal and make that goal your lil bish!

You can do it. Why? Because you made it your goal. Simple as that!

Nathaniel Green · Answer

@Johnathon Kim You can do all those things you aspire to do and more but I can’t stress enough that you have invest time into your education. Financially and Real Estate. Both go hand and hand on your journey. Happy Holidays to you and welcome to BP

Taylor L. · Answer

Go to those 3 markets and check out the areas you're considering investing in. You'll probably eliminate at least one of them, if not narrow it down to 1 market you're interested in. Make a plan to tour the markets, meet with brokers, property managers, or other service providers, and get to know the market a bit.

Odds are, there are a bunch of people making a lot of money in real estate in each of the markets you've selected.

Johnathon Kim · Answer

Thanks so much for the advice everyone. Really appreciate you taking the time to help me out!!@Corey Hawkinson Gotcha – I'll do my best to stay focused on that first property.. I have a tendency to plan too far into the future before even getting started, so thank you for reminding me of that.@Jack Dalrymple Thank you for your insights! It definitely sounds like any goal can be realistic depending on how fast/slow I'm willing to go. I'm leaning heavily towards cash-flow.. but with the amount of liquid capital I have the only markets that make sense for me are long-distance (I live in southern CA). Do you think going long-distance is a bad idea for my first property? I've heard lots of mixed opinions on this topic.@Taylor L. I'm definitely sitting on my hands and it's killing me haha! Like I said above, the only markets that seem to make sense for the amount of capital I have are long-distance, and I guess what's stopping me from moving forward is a fear of choosing the wrong market (basically analysis paralysis). Is there a "next step" you'd recommend I should take to get me closer to purchasing that first property?

Taylor L. · Answer

Yes it's feasible.

Only buy for cash flow, never speculate on appreciation. Multifamily is different in that we control the value based on NOI, but if you're talking about speculating on Single Family values, don't do it!

The biggest thing is to get started. I took too long to get started and missed out on potential gains at the beginning. Don't sit on your hands, get out there and do it!

Just starting out. Is this a realistic goal?

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