Realistic goals in REI

[Sachin Amin]

BP community,   

Lets set a hypothetical goal to own 20 Single Family units in 5 years. (finance with 25% down(down payment 20% + 5% closing cost)

Year 1 Goal - 4 Units

we will need $100,000 just for down payments to procure 4 Units

So lets breaking down numbers and see if we break even:

Assumptions:

You have a steady income (job)

Price - $100,000 per Unit (various markets)

1% rent - $1000 per Unit

Misc expenditure = $1000 / yr (vacancy, repairs or anything else)

Turnkey PM fee - 8% = 960/yr

Mortgage(30 yrs) + Insurance   - 5%($429) + $80 + $163  = $672  (monthly payments)

Cash flow - $328  ($3,936)

$3,936 x 4 Units = $15,744

Year 2 Goal - 4 Units

We only have capital of $15,744  we are short of $84,256

I would request BP community to provide opinions on how to move forward with Year 2 Goals ????

I do research REI books, youtube , podcasts - they are all good theories but none practical?

in this case - the only option I see is to raise capital and create more debt which is most common way everyone thinks of.

I would request BP community  to provide feedback  - on how to proceed forward with out adding Debt from Year 2 onward :)

Cheers,

Sachin