How long did it take you to become financially independent?

Question

Hi! I'm fairly new to real estate investing and am learning as much as I can right now. I'm wondering what the timeline can look like to achieve financial independence. Is 3-5 years realistic, while holding down a 30-40 hour/week job? I'd need $100k in annual passive income to live comfortably.

Thank you so much!

David

Genny Li · Answer

No. It's not. Shills make money selling the dream of "financial independence," concealing the fact that they make a lot of their money selling the dread of "financial independence." They encourage people to quit their jobs when they have nothing but miserable poverty existence incomes and don't have enough cashflow for additional downpayments for new properties or to keep them from going hungry if they get hit by a new capex expense. $100k a year NET passive income from your properties is still not much to live on. You think it is, but are you still trying to grow your portfolio? That's $25-35k per year there. Paying your own health insurance, etc? You're shut off from 401k contributions as soon as you stop your active income job, too! Work benefits add more than you think in value. Will you still owe on your own house?

Tony Kim · Answer

I'd say I'm FI now, so I guess it took me around 10 years. Simple strategy, I saved every penny I made to invest in stocks and acquire properties...and I made these investments at the right time and in the right place. Once I reached a certain level, I started investing in syndications as well. But I love my job and the set-up is too good...so I'm pretty sure I will keep working till my company tells me to leave. I also love looking at RE deals, syndication deals and analyzing stocks...so that will never stop...and my only regret is that I didn't start sooner.I don't think 3-5 years is realistic, especially considering where we are in the RE cycle. Part of my success is due to the great 12 year-run up in prices we've had.

Cody L. · Answer

I'd say about 5 years. After 5 years I had enough coming in where I didn't really need to work (well, I had to oversee the business). After 8 years I hired an operations manager to run 95% of the biz (I focused on refi, buy/sell, insurance).Damn it's crazy but I bought my first multifamily 14 years ago (!!!!)

Mary M. · Answer

well..... put it this way - at a 5% cap rate it will take a $2 million investment to make $100k/year cash flow. if you want to finance then it will take a lot more as the interest eats into your cash flow..... also, "passive" is relative.... if you truly want passive cash flow you need to pay others to do all the work and it will take more investment $$ to get the same return....I would give myself 10 years.... and learn to live frugally - save as much as possible... have a number - what ever it is - that needs to be in the bank.... and build to that. (for me it is one years worth of income socked away) Do not spend money on gurus , get rich quick schemes, etc.... learn from people who are actually doing what you want to do. Beware the folks on BP that will try to sell you stuff.... just say no :) My suggestion is to spend a year learning.... then reverse engineer so you know what you need to get your cash flow....

Jesus Roman · Answer

Hey @David Babayev! It all depends on your strategy approach and how much risk your willing to take. It's always important to remember that real estate isn't a get rich quick business. But I would say it's is very obtainable within that time frame if you play your cards right. Can't wait to hear how you achieved your financial independence, cheers from Houston!

Bruce Woodruff · Answer

Well I started in 1982 and I'm still looking for that financial independence thing.....Working at this business (One of the toughest there is) for 20 hrs a week is not even close to sufficient, if you even make it to 20 hrs after turning in 40 hrs on your day job.....And then you would really have to define 'financial independence' for us and yourself. Is it not working at all? Is it quitting your day job and focusing only on RE? Is it having $1 mil in the bank? $10 mil?There are plenty of people on here who seem to have gotten to where you seem to want to go, so see what they say.BTW - This question gets asked every day or so......you could do a search ...

Todd Dexheimer · Answer

3-5 years is very realistic, but it will take education, determination and a lot of grit. My freedom number was much less, but it took me 2 years to achieve while working a full time job. You need to be consistently taking massive action everyday.

Tony Kim · Answer

And then you started a Flight Club style pipeline of investors and started doing your own syndicated deals across the country. Argh, I think I just broke the first rule of your Club.

Lane Kawaoka · Answer

I started with turnkey remote rentals in 2009-2015 while working my engineering W2 job. Then went into syndications once my net worth went over 500k. Took me about a dozen years to finally leave but I was making on average just under 100k a year.

Cody L. · Answer

5 CAP? I'm selling a 10 CAP to a lady and seller financing it for her with 10% down. Purchase price: $3.2mDown Payment: $320kPayment to me: $16k/month (6%)Payment to her by tenant: $26k (it's NNN so technically no other costs)Cash flow: $120k annuallyReturn on cash: 37%There are deals out there like that. You just have to be willing to assume risk. i.e, this isn't a Walgreens or Starbucks lease. But if you're trying to get more than 3-4 cap properties, you have to see what's out there that has risk, but outsized risk adjusted returns. Best of luck out there everyone.