Replace salary in 5 years

[Michael Wilson]

So I've been thinking a lot about why I actually want to start investing in real estate. Obviously we all want to create an awesome lives for ourselves and our families but I wanted to start thinking specifically FOR ME what do I WANT. Here is what I have come up with. I want my wife to be the most free woman on the planet! I want her to be able to do what she wants, to travel, to stay at home with the kids, work, or not work, whatever she wants to do. I want her to have the choice of what she wants to do with her life. I don't want money to be the thing that drives her decisions.  I don't want her to have to work to work to help provide for our kids. We got married last May and are in our early 20s. 

So the reason I am beginning my real estate adventure is to do that. In the next five years, when we start having kiddos, I want to have replaced my wife's salary with passive income through real estate investing. My goal is to pull in about $4,000 of passive income a month in 5 years.

If you were in my shoes, where would you start? I currently own the house we live in Clemson, SC and have about $30,000 in equity. Any advice would be greatly appreciated!

[Doug Vigliano]

Wow!  Michael that is an awesome WHY and a very noble goal.  I am just a tiny bit further down the road from you, I'm 29 w/ two kids (6 and 3).  My wife has been a stay-at-home-mom for the past 4 years and believe me, this is the way it is supposed to be.  This sort of family dynamic allows you, the hunter, to stick w/ your strengths as a provider and allows your wife to stick w her strengths, nurturing and raising children (don't get me wrong, parenting is a team sport).  

As far as real estate, $4,000 passive income is a lofty goal, your first step is doing the math of exactly how many rental properties you need and what type (SFH or multifamily), as well as the market you can invest in. Hopefully the Clemson area is conducive to income property investing. So if your goal is $4,000 a month and you can acquire properties that cash flow $200 each after expenses, etc. than you will need 20 properties (or 20 doors, if it's multifamily).

To simply buy that many properties would take a lot of capital, so you may want to research more creative strategies such as owner financing, subject to, owner financing, etc.. These would allow you to acquire (or control) properties much faster than a conventional purchase requiring 20% down.  

Also, since the cornerstone of real estate is actually finding good deals, you may start your REI career via wholesaling, which can generate a substantial side income (although active, not passive) that you can redirect back into growing a portfolio.

Always good to connect w/ other Gen-Y REInvestors, keep in touch and wish you best of luck!  Keep me posted on your journey!