Financial freedom goals. Accumulation phase ongoing. Payoff next?

[Sam Huang]

Family goals: 

We are a family of 4 (2 kids), living in CA. Our goal as a family is to move outside the US in the next 3-4 years and live half way around the world for the foreseeable future (5+ years). 

Financial goals:

Our current jobs provide for high-income but not a lot of time for active real-estate investing, so our strategy is long-term buy-and-hold with less headache properties. In today's dollar terms if we bring in $10K/month with real-estate cash-flow that would make us financially independent.

Current real-estate portfolio: 

- Own 4 properties, mostly duplexes in the state of Oklahoma.

 - Cashflow is ~2K/month and leverage is ~60% (equity being 40% of current value)

Accumulation goals:

In the next 2 years, our plan is to buy lots and have duplexes built by a builder we have existing relationship with that takes care of the whole process without too much of our involvement. 

- Buy 6 additional duplexes. Expect total cost to be ~350K per duplex and bring in 3-3.2K/month rent. We plan to leave 25-40% of equity in the deal. We are conservative investors since we will be out of the country eventually.

- These total 10 duplexes should bring in 30K gross rent per month and cash-flow about ~3-4K/month.

We don't plan to use any of the cash-flow for personal expenses and after keeping sufficient reserves, we will funnel the cash-flow to pay-off existing properties. By our estimate, it should take us about 10-12 years to payoff all the properties with this snowball approach. At the end of it, assuming a modest 2% appreciation in property-value and rents that should give us ~$38K/month in gross rents and $4.5M in paid-off homes. Using the 50% rule (taxes, insurance, Capex, maintenance, vacancies, property-management), that should give us ~19K/month in pre-tax profits that achieves our 10k/month financial goal after-tax and adjusting for inflation.

Our assumption is that building new-construction would reduce capex & maintenance the first few years. The duplexes will be in B-class mix of blue-collar and white-collar neighborhoods with good rental demand and during times of a recession they should hopefully hold their rental price & demand.

How does the plan sound? Feedback appreciated.

This models an investor I heard about on BiggerPockets called Chad Carson in the Small & Mighty Real-Estate investor.