New investor wants to live completely on passive income

[Dan D.]

Hi everyone. New investor in Green Bay and I dream of quitting my day job and investing in 100% passive income. I figured out I need to make about $6000 a month and am wanting to reach that goal in 5 years. Currently I'm working a day job that pays the bills, but feel it will be ending soon. I'm still in the study phase of learning about real estate, but am trying to get my ducks in a row.

I have 3 months cash saved up just in case of emergencies.

So, what would you do?

[Jon Holdman]

Originally posted by @Alexander Felice:

do the math backwards so you know where your goal post is:

$6,000 per month is $72K per year

72K at an 8% CoC ROI means you need 900,000 of assets producing income.

It'll happen quite fast actually, just gotta keep plugging away.

Actually an 8% cash on cash return would mean you need $900,000 of CASH invested producing the 8% CoC return to generate $72,000 a year. Very do-able, though how long that takes depends on how fast you can generate that cash to invest. Assuming 20% down payments and some cash needed for closing and fixup costs will likely translate into something like $4 million in assets.

$900K in assets, purchased with 20% down plus another 5% for closing costs and fixup would require a cash investment around $225,000. But with a 8% CoC return that's only $18,000 a year.