Investment strategy, criteria, & location

[Tim James]

Hello fellow BP'ers,

My wife and I are in the education phase of real estate investing, with plans to purchase our first property 12 months from now. We are traveling physical therapists, always on the move, so we're looking for advice on which location/market would be the best fit for us when it comes to investing in large multifamily properties, based on our criteria (below). Any thoughts are welcome to advise.

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- Strategy: acquire 1 large multi-family per year, buy and hold for cash flow. Save $120,000/year from work and put 20% down. 

- Criteria: Purchase at 10% of asking price and add 10% value in first year. Cash flow $150/unit/month. Property class __?___, Location ___?___.

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Year 1: put $150,000 down on a $750,000 20-unit, increase value to $908,000 and save $36,000 in cash flow + $120,000 from work savings

Year 2: put $160,000 down on a $800,000 24-unit, increase value to $968,000 and save $43,000 + $36,000 in cash flow + $120,000 work savings

Year 3: put $200,000 down on a $1,000,000 28-unit, increase value to $1,200,000 and save $50,000 + $43,000 + $36,000 + $120,000 work savings

Year 4: put $250,000 down on a $1,250,000 34-unit, increase value to $1,500,000 and save $61,000 + $50,000 + $43,000 + $36,000 + $120,000 work savings

Year 5: put $310,000 down on a $1,500,000 36-unit, increase value to $1,800,000 and save $65,000 + $111,000 + $43,000 + $36,000 + $120,000 work savings. 

Total cashflow at end of year 5 = $255,000/year.

I'd appreciate any advice on a location where this type of strategy/criteria could work well, and also info that would help me make my assumptions/estimations more accurate. I'm basing my current (potentially over-optimistic) price estimates off of some cursory Loopnet research.

Tim