55 Is Not Too Old To Start (or) I Hit My 2016 Goals already

[Mackal Smith]

I love being a new investor at 55. Why? Because this age automatically (or auto-magically) gives you credibility with sellers, contractors, lenders, and real estate agents. They see a little grey hair and a few wrinkles and assume you must have been in the game a long time. I'm focusing on small multi-families because I like the fact that losing a tenant in 1 unit still allows me income from the other 1 (or 3). It's not just the grey(ing) hair, it's the fact that I have had enough success in other areas of my life that it gives me confidence in evaluating and negotiating real estate deals also.

I bought my first 3 family in March of 2015. It was a $122K deal that I paid full price for because it was a great deal at that price. Today it rents for $925, $550, and $575. After all costs, it cash flows at about $625/mo.

I bought my next property in May 2015. It was a really nice fully rehabbed duplex with 2 bedroom apartments. They wanted $85K, I got it for $72K because I paid cash. After all costs it cash flows at a little over $900/mo with $800/mo on the lower unit and $750/mo on the upper.

I sat on these two properties until January this year. My goal for 2016 was to own 13 positive cash flow units by December. That means with the 5 I had, I would need 8 more this year. In February I closed on another duplex, they wanted $65K but I got it for $54K. Rents are $700 and $650 with projected cash flow after all costs of around $400/mo

In April I'm closing on a 4 plex that was listed at $99K. I got it at $85K then found it needed stack work and a few other items during the inspection. I asked for them to repair everything and they came back offering another $7,000 at closing (which I jumped on!). I'm set to close on it on April 4. I'm projecting about $450/mo cash flow after all costs and debt service.

I just finished up the inspection on another Duplex (actually 2 doors down from the one I bought last year). They wanted $99K, I offered $80K, they countered at $92K and I came back at $85K which they accepted. This one has a section 8 tenant in the lower unit at $750/mo and $500/mo on the upper unit. This tenant is month to month and is paying about $200 under market so I will be raising this to $700 soon after closing. I'm projecting cash flow of $400/mo after rent increase, and costs including debt service.

It will soon be April and I have made my goal for the year. The goal for next year was another 10 units... seems like that could potentially be done this year. So let me summarize:

I'm 55. In slightly more than a year I have acquired 5 properties with a total of 13 units netting me almost $2800/mo (or about $33K per year). I have used around $150K of my own money and leverage to buy the properties. When I started out, I was looking to maybe make an extra $25K when I retire. With another 3 years before I'll be ready to retire, now I'm thinking I should be aiming for an extra $75K when I retire. So NO, 55 is NOT too old to start and YES I hit my 2016 goals already so I'm pushing for next year's goal by this December! Life is good!!

[Bhekizwe M.]

thanks for sharing.inspiring