20 Years to $20K/month Passive Income

[Mark S.]

At 30 years old, I would consider myself a little bit late to the real estate investing party (although, I'm sure others might disagree). In my 20s, I have been fortunate enough to have decent full-time positions in the corporate world and to sock away a couple hundred thousand (including growth) in qualified retirement plans. Compared to the average American, this is probably an excellent start; compared to investors my age on BP nation, maybe it's average, at best. While I still plan to maximize retirement account contributions and to (at least for quite some time) stay in the corporate world, I really want to get my real estate investing off the ground. Here's my plan: I would like to have $20,000/month positive, passive cashflow by the time I'm age 50 in 20 years. I currently have zero rentals. If I break this down, I need to generate (not factoring inflation, etc.) $1,000/month positive, passive cashflow each year for the next 20 years. Most properties I've looked at in my area provide about $100-$150/month positive cashflow, at best. By these numbers, I would need to acquire 7-10 units/year, which I don't see as reasonable for me to buy personally from my W-2 income. I'm starting to think I may need to set $200-$250/month per unit as one of my minimum criteria, however, this may force me to buy out-of-state, which opens up a whole new can of (potential) worms. If I did this, though, I would only need 4-5 units/year, which seems a tad more reasonable, although (in my opinion) ambitious. Originally, my plan was to start small and buy 1-2 units/year. If I do this, I very likely won't reach my goal. My primary concern is getting started (I've made several offers, however, no luck yet); I believe getting started will help drive momentum. My secondary concern is reaching my income goal. I've calculated, based on a 10% income yield, what it would take in equity (stock) investments to produce this $12,000/year Cashflow. It's pretty simple: $120,000. To buy, say, 5 properties a year at $60,000 (let's say each spun off $200/mo for $200/mo x 5 units = $1,000/mo = $12,000/yr Cashflow). At 20% down payment, that would be $60,000 cash outlay. Clearly, there are other items (mild rehab, closing costs, etc.) that would be out of pocket, but probably not enough to make up that extra $60,000. I guess I'm sold on the real estate investment method, but just want to be sure I'm thinking about it correctly. MY QUESTIONS FOR YOU: 1.) Should I just jump in when I find a "good deal," and modify my income goals as I progress? 2.) Would you start with turnkey out of state investing if you're a new investor? 3.) Regardless of where you start, would you want all your properties in the same state r multiple states (to diversify)? 4.) What other advice would you give to someone like me? I'm planning to buy-and-hold in B/C type neighborhoods with minimal rehab and am debating whether or not I want to use property management, however, I do factor in 10% for PM in my numbers when analyzing. Thanks in advance, everyone!