$150k into $6k/month in passive cash flow

[Jake Grenier]

What's up BP community!  I'm wanting to hear your strategies for turning roughly $150k of savings into $6k/month in passive cash flow through real estate.  Don't consider anything off-limits, as I'm hoping some of these ideas can not only help me but many others that have similar goals.  However I'll give my personal situation below so that you have a real world case study to analyze.

Over the past couple years I've been reading a lot of books and listening to a lot of podcasts, and you could say I've been stuck in analysis paralysis.  Although I've gathered a lot of knowledge and ideas, I'm still searching for me and my fiance's direct path to early retirement.  We both have full time jobs that we enjoy in Costa Mesa, CA and are looking to start a family in the next year or two.  So neither of us feel the need to quit our jobs right away, but I have aspirations of replacing my W-2 income with passive cash flow sometime in the next 10 years to be more available for my family and to pursue more interesting endeavors. 

Because we live in a very expensive area, it's hard to come up with a realistic plan that creates loads of cash flow locally.  We also have full time jobs, so we need an efficient strategy that isn't just another full time job.  We would be able to consistently add capital to our investment portfolio yearly, let's say $10k per year.

Some strategies that have peaked my interests are SFH or small multi-family BRRRRs, short term rentals, trade up into large multi-family, rental debt snowball, etc. But as you can see, I need to pick one and go for it! What's the one thing??

Thanks in advance for your ideas, looking forward to hearing them!

[Paul Moore]

Hi @Jake Grenier.  Great goal! Based on your original question, then further comments about not needing cash flow immediately, I would recommend that you reinvest the $150k into a safe, proven syndication that allows you to turn that $150k into a higher principal base to work from first.  Maybe do three or four (or five) cycles like that (reinvesting the distributions) and try to get that $150k up to say $700k. Even at $700k, your yield will have to be about 10% to get to your $6k monthly goal.  

I am doing this myself. Our fund, and me personally, are investing with a syndicator who will allow us to roll our principal (over several cycles) into a substantial multiple of its original value.  The current tax laws help a lot. I wish you the best!