Push, pop the clutch, then hit the gas. When did it take off?

Question

At what number of units, or other specific point, did your real estate investment vehicle transform from something you felt you were pushing, into some thing that you were driving? When did it change from something your primary income mostly funded, into something that could sustain and grow on its own, and that you could certainly accelerate with ease?

I imagine it is somewhere between 5 and 10 units, depending on factors such as initial deal purchase, rent increases, etc. The math behind the logic is 7 units @ $300 net a month, will produce $25,200.00 in a year. $25K will purchase another unit where I invest. At those rates, it would gain 1 unit a year without additional funding, and only become faster with each unit purchased.

Multifamily investors can chime in as well. I am aware that going from a ~20 unit to a ~120 unit makes a huge difference because of scale, on site staff, etc. I'm curious as to when that 'look at it go' moment happened for everyone who invests. What are the milestones?

Thanks,

Ian

Bob Woelfel · Answer

I didn't cash out per se...I rolled my 401k from my employer over to a Solo 401k for my business.  We typically use it to lend on deals with other investors.  Initially I thought I would buy and hold properties with that money, but haven't done that as of yet.   I kept a little money in the stock market via and IRA, but most everything we do is real estate.

Ian Covington · Answer

This makes total sense. Congrats on leaving the W-2 race. I'm probably one of the few who really enjoys my W-2 job. I work from anywhere with internet access and get paid well for it, so I'm not trying to replace it...yet. I see it as fuel to throw on the real estate investing fire that I am building. Once I feel it is really going, I may let the W-2 go. You are right about the milestones as well. Out of curiosity, did you end up cashing out old retirement plans to use towards real estate?

Bob Woelfel · Answer

I think it's going to be different for everyone obviously.  I'm at 10+ units and still don't feel like I'm there financially, but I was able to leave my W2 job to invest and work as an agent full time.  Once I did that I stopped pushing so hard for awhile, but now I'm back trying to tackle the next thing.  I think when I get to the point where I net in rental cash flow per year what I used to make at my job I'll feel like I'm there.  With that said, I think the mentality of what it will take I already have acquired.  I've proven the concept to myself of what RE can do...now I just have to follow the plan and be patient.  While I may not answer your question directly I think you're going to have many milestones in your career and you may not even realize at the time when they are happening.  Just enjoy the process.