Long term investing strategy (Boring)

[Paul Novak]

I wanted to share my strategy because it's working for us and it's not one that I hear talked about much.  It's boring and takes more capital so it's not as exciting but it has been effective and I feel its something everyone can do.  With this strategy we are getting traditional financing and buying on market deals.  I subscribe to the "Small and Mighty Investor Strategy" of Coach Carson.  I personally am not trying to build a portfolio of 100 doors, I am trying to build a portfolio big enough to support our ideal lifestyle.

 - We start with the property vs. the numbers.  The property needs to be one we are proud to own and preferably would be willing to rent out ourselves.  We have found that slightly higher end properties and ones that align with our likes attract tenants that we can relate to.

 - Once we like the property we run the numbers on rents.  We use rentometer.com and knowledge of the market to establish what we feel we could get for rents.

 - Next we run the numbers on cost.  We put together a purchase price, interest rate, insurance cost, and property taxes.  When I run my numbers I round my interest rate and insurance costs up to build in a small safety net.

 - Next I use a calculator to determine how much money to put down.  My goal per property is to generate a minimum of $500 cashflow per month.  This means I may put down 20%, 25%, 35% to hit my goal.  Yes this leaves more money in the deal but it reduces my risk and ensures I can remain profitable in a down market.  I have learned that any property can cashflow but not when you are looking to put the least amount of money in the deal.  Again not for everyone but works for us.

 - Last as long as I have the cash to hit my goal and I am comfortable with how much money we would need to stick into the deal we purchase it.  If not we wait till the next deal.

We have used this strategy to purchase 5 properties, 7 doors, since 2021 so I understand we are still new.  My ultimate goal is to generate $11K per month cashflow which I will be able to do with 7 properties provided they are all paid off.  Once we acquire the last 2 properties we will shift from acquisition to debt paydown.