New Investor, Audacious Goals, What are your thoughts?

[Mario Gamez]

Hi Everyone, 

I'm a big fan of the podcast and new to the website. I'm beginning my path to real estate investing and I figured this would be the best place to get advice, learn strategies, and overcome some obstacles I'm sure to face. 

Like many new investors I've spent the past several years thinking about getting started but now I am ready to take the plunge. I've spent most of that time thinking about strategies and creating a clear goal to follow with my investing. I want my investing to be purposeful and disciplined. 

What I've landed on is a plan to purchase and pay off 30 rental properties in the next 20 years. I am currently 29. I know this sounds like a pretty big challenge but hear me out. If I purchase one rental property this year for $150,000 and put down 20%, I believe I can cash flow $400-$500 a month after PITI. I'm sure there will be capital expenditures and vacancies and other surprises that eat into that but for the sake of argument, let's say $400 a month cash flow is attainable, which it definitely is. If I apply that $400 a month back into the mortgage payment, mathematically, I would pay off that property in 13 years and 8 months.

Now say I can purchase 2-3 similar properties per year. I know I will have to look into different options for financing along the way but purchasing 2-3 properties per year is definitely possible. If I apply the cash flow on each of these as I did the first, then they should all be paid off about 16 years ahead of schedule. 

Taking that a step further and applying the full amount of rent once the first one is paid off to the second one in addition to the second ones cash flow, mathematically, the second one would be paid off 2 months after the first assuming I'm purchase a property every 6 months. If I continue to do this with each property, then I will be able to pay off the next one every 2 months. I worked the math on this using an amortization schedule and a lot of spreadsheets. Feel free to correct it if you would like to figure it out as well or you can just take my word for it. 

I'm a new investor, but I am not new to real estate. I have worked as a realtor for the past 7 years and prior to that I managed 50 properties for a group of investors. I'm sure with the amount of money I plan to invest in rental properties, there are opportunities for greater returns in commercial but like I said, I want to be purposeful in my investing and want to work towards 1 goal without distractions. Once I have passive income of 30 paid off rental properties then I can be as aggressive as I want with my investing. My goal is to eventually have $1 million in passive income per year.

What are your thoughts on this strategy and what set backs do you see my encountering along the way? What reasons do you have that would convince me this is a terrible idea? I want to hear any input good or bad. I know, I don't know everything and joined this forum to learn and am exciting to hear everyones input.