Starting out my real estate independence journey

[Bartek N.]

Hi all, I am based in Seattle and I have been a private lender in a few deals in the last several years. Now I am looking to start buying rental properties with a goal of having passive income cover my expenses (or more) in 3 years. Aggressive, I know, but I have a stable and highly paid W-2 job, no debt, a sizeable chunk of cash as well as capital in the stock market, and I also don't spend much.

Why now, when everything is so expensive? Well, my family lives abroad and their and my own health matters make me want to compress the timeline. I also want to leverage with cheap debt that we currently have access to.

I rent, and after listening to tons of BP podcasts and reading some books, it seems like one of the best ways to start, particularly in a very expensive market like Seattle, is to house hack. I am also strongly considering buying a turnkey property in Florida for cashflow and appreciation. Long term, it seems like commercial apartment buildings is one of the quickest ways to build significant cashflow and equity.

Ideally, I would want to transition to commercial real estate as soon as possible, because I can generate enough cash and have NW requirement covered to buy a small multi (although that wouldn't be in Seattle due to insane prices). The problem is that I could buy only a single commercial multi before I run out of money, so I need to learn how to raise money and tons of other things first. Michael Blank does make it sound easy though...

I think a saner way is to take a smaller step and try landlording first in a 2-4plex or a house hack, because I need to live somewhere anyway and could learn and network in the meantime. I am thinking FHA loan for starters, possibly FHA 203(k) to force appreciation. There are issues with them though in that it's quite hard to find a cashflowing 2-4plex in this area. I've also heard that it's hard to win with an FHA offer nowadays and it's difficult to find contractors for 203(k) due to paperwork required. However, I understand that nothing comes for free and deals don't just lie on the street.

In general, does the above strategy sound about right? Any glaring issues, risks? Something totally different I should pursue given my goals and situation? I look forward to connecting with anyone who would like to participate in this journey!

[Bartek N.]

@Aaron W. thank you for your reply! Yes, I want to have the end goal in mind of not needing to attend daily to those properties so I want to develop systems to help with that. As for cash flow, $4k a month should do it for me.

@Paul Welden, thank you for your encouragement and advice! I am glad things are better now regarding contractors. I will save that link for future uses.