Chicago Investor: 25 Years Old & 25 Properties Cash Flow Properties

[Andrew Holmes]

Read some great experiences from folks so I thought I would share Ed's Story of what is possible at a young age with the right strategy, passion & focus:

Investor: Ed Boutros

Age: 24

Real Estate Investing Experience: 24 Months

Education: Engineer

Goal: 25 Properties By 25 Year Old. All paid off by 30 years old.

Key Strategy Used: Buy - Rehab - Refinance using 100% Money Recycling Formula

When Ed started, like most people because of his age, he only had $ 20k from this first job saved up so. How does he accumulate good quality properties with so little money?

Most would gravitate to owner finance deals or sandwich lease options etc. Instead he has taken our 2-5-7 Cash Flow For Life model and EXPLODED his investing strategy.

At this point in the Chicago Suburbs he has already accumulated 13 cash flow properties each with a minimum of $ 400 per month in positive net cash flow.  On top of that, there's over 20% equity in each deal to start with.

Within 14 months of starting his real estate investing he was able to walk away from his job. 

Now just 12 more to go.  At 23 he is at 400*13 = $ 5200/Month. 

Not only is he accumulating properties like mad but now he is adding flips as well. 

Well onto his goal of 25 cash flow deals by 25 years old.

GOAL ALL PAID OFF BY 30.

So What Do You Guys Think?

[Andrew Holmes]

Hey Guys: Thanks for the response on here. I am new here so still getting a hang of things here.

You guys asked so great questions:

What is 2-5-7 Cash Flow For Life?

My belief is that every real estate investor should have a basic goal. 2 years 5 Properties 7 Years all PAID OFF & DEBT FREE. That equation equals Cash Flow For Life. We have a lot of folks that are at 2-10-7 or 2-15-7. A few go getters like Rahul are at 2-25-7.

The nice part about 2-5-7 is that in today's market even novice investors can learn this same strategy of investing and be free with in less than 2 years.

How do you refinance properties without any seasoning?

Well I could this is where you separate men from the boys. In all seriousness this is the most tricky part of the learning curve. First off you have to understand that you cannot refinance the properties with residential loans. You have to go commercial even on Single Family, 2-4 Unit and Townhome deals.

Sometime I get folk that look perplexed when I say commercial loan on residential properties. YES I DO MEAN COMMERCIAL LOANS ON RESIDENTIAL PROPERTIES. I have over 150 residential properties with commercial loans.

There is a lot I can go into but for this discussion it would be too much to type out. But to answer the question that someone asked in the above discussion you can get 75% LTV loans based on Appraised value all day long you just have to know what you are doing.

Does the bank require 20% Down on each deal?

Commercial banks do not require 20% down at all but the deal needs to bought and set up correctly and they will give you 75% of appraised value.

I can illustrate this with an example

Purchase Price: $ 60,000

Rehab: $ 20,000

Carrying Cost & Cost of Money: $ 7,000

Total Cost: $ 87,000

Appraised Value: $ 140,000

You can refinance: $ 140,000 X 0.75 = 105,000

So you refinance even more than you have in the deal. I NEVER DO THAT PERSONALLY BECAUSE I JUST HAPPEN TO BE VERY CONSERVATIVE but you can do it and it can be done in mass. You do need the right contact. A good understanding of Debt Coverage Ratios and other issue that a Commercial bank would look at.

Thanks

Andrew Holmes