Feeling a little lost as to the best way to proceed

[Lucas Mills]

I'm in the very early stages of educating myself as it relates to REI, but I've started thinking about what kind of path I want to follow because I believe it is important to have a goal, or at least a path, in mind.

That said, my short-to-mid term goal is to achieve 3k/month in passive income within the next 6 years. When I say passive, I mean as passive as possible.

I have considered multiple real estate strategies and I gravitate towards renting, because it seems to provide the lowest potential time investment after the systems are in place.

However, in my market, it seems like I am doing well to achieve $100/month in cash flow after all other expenses have been accounted for. Here's an example of a recent analysis that I did. Granted, I am still extremely new at analyses so there may be some inaccuracies, however, I am trying to be as conservative as reasonably possible (i.e., perhaps I am allocating too much to CapEx each month?).

Ideally, I would find a halfway decent deal on a multifamily so that I could house hack. That would, presumably, free me of a monthly rent payment and also, hopefully, provide a slight positive cash flow on top. To me, this seems to be the most powerful way that a beginner can start because of the fact that multiple units are being purchased at once for a single, low down payment with FHA, thus, more cash flow power (as opposed to buying a SFR).

Unfortunately, multi families seem to be hard to come by in my market. There are a ton of SFR, but, as stated earlier, I think I would be doing well to cash flow $100-$200 each month after all expenses are paid. So why not just get a ton of SFR? Well, I am limited by cash reserves and the ability to pony up 15-20k as a down payment on an ongoing basis. And let's say I drop 20k on a house that generates only $100 cash flow each month; it will probably be at least another 6 months to a year before I'm able to amass this amount again from working my day job. In the meantime, I'm only (hopefully) getting an additional 100 bucks each month. While this is at least something, I just want to make sure that I'm maximizing my current cash reserves before exhausting it on a single option which provides a low amount of cash flow.

So I'm just trying to work through all of this and determine what the best course of action is with respect to making progress at a reasonable pace in my market. Thoughts?

[Edmund Ricker]

@Lucas Mills

My first advice would be to attend your local REIA and network with other investors.

There are other avenues of REI that you could look at that are completely passive. You could consider being a private lender. You loan your money to other RE investors who need short term cash to fund their deals. This can be done with retirement and/or non-retirement funds. It would take a while to get to the point where it is going to generate 3k per month, but it is possible.

If you are pre retirement age, then you wouldn't want to invest with the intention of using the earnings to fund current living expenses.

There are many avenues and it may take a combination of different ones to reach your goals.

You could also consider partnering with one or more other people so that you are not coming up with all of your own money to fund your deals.

Good luck on your journey!  Hope this helps.

Ed