My Planned 5 Year Path to Financial Freedom

[Tim Porsche]

Hi All,

So below is my five year plan to reach a state of financial independence, where all my bills can be paid with (semi) passive rental income. Would love to get your opinions on how doable you think it is, or if you see any issues with my plan that I'm not seeing. 

Current Financial Situation

1. I'm 27 years old and currently earning about $48,000\year before taxes at my 8-5 job.

2. Own 1 single family rental that is worth about $140,000. I bought it for $122,000 a little over a year ago and have around $35,000 equity in it. It currently brings in about $450\month total profit after all expenses have been taken out, before taxes. 

3. I just purchased my second rental property, a two story duplex. I will be moving into the bottom unit in early 2016. Total monthly payments for everything are $950. The second tenant pays $750 in rent leaving me with just the difference of $200 to pay, plus any repairs here and there. 

4. I've looked at my spending in depth and found that I'll really only need about $2,000\month after taxes to cover all of my expenses. That is the base minimum amount that I need. 

5. Living in the duplex, I feel confident I'll be able to save at least $1,500 every month after taxes.

6. I currently have $12,000 in savings, $6,000 in 401k, and $6,000 in gold and silver. 

5 Year Plan

1. In 2 years, I want to buy a triplex or quadplex in the $160,000 - $200,000 range with 25% down. I would like to be able to get at least $800\month after EVERY expense has been taken out, plus taxes. This would be factoring in a 10% vacancy rate, 10% of the monthly rent for maintenance, and 10% of the rent for management. I'll still be working full time so probably won't want to manage it myself. 

2. 3 years down the road, I would possibly look to sell the single family property that's netting me $450 every month, and use the proceed from that to cover about 80-90% of the 25% downpayment on a second triplex or quadplex. Again, I would like to achieve at least $800\month after all expenses and taxes from this.

3. 4-5 years down the road, I would hopefully be able to purchase a third triplex\quadplex achieving a similar income stream as the other two. This would net me $2,400\month after taxes from rental income, which even with inflation after 5 years should leave me enough to pay all my bills. 

4. At that point, I would look to just cut back to working 2 days per week. I believe I could bring in at least an extra $1,500\month after taxes from this part time work. This would give me a nice cushion each month and also give me money to reinvest and use for growth. In addition I would be pursuing other entrepreneurial things on the side, but I wouldn't need to depend on making that money on the side to pay my bills. Also, I would actively manage the rental properties at that point as I would be working part time and be able to do so more easily, and I would save on the 10% management fee. 

So there you have it. Is my plan crazy, incomplete, or do you think it looks solid? Would super appreciate your opinions and any advice.