Real Estate Investing Plan - Advice

[Keith A.]

I wanted to get some advice on a strategy for investing a sum of money around the 800K to 1.1mil range.

My father, brother and I would like to begin investing it in property both SFH and MFH. We have experience owning and managing a 4 unit MFH for several years now but haven't gone farther.

The goal is generate enough income to get out of the rat race and do this full time. My father is retired and my brother and I would like be doing this full time in 5 years. We would use 200K per year income as an initial goal between both of us to measure.

I've been working on a model to try and forcast the amount of cash flow we would be making based primarily on assumptions around a cash-on-cash percentage. So we would go after properties with an average cash-on-cash percentage of 15%. This assumes we get some higher and some lower over time. It also assumes we reinvest the monthly income back into buying more property.

Also, assumptions are conservative and we would be using the 50% rule including property management so that we can continue to work at our normal jobs while things grow. We would keep reserves for each property and also assume debt service would change with public/private lending.

Taking this into account and buying enough property in the first two years to invest the total sum of money and then continuing each year after investing the returns shows that we would hit the 200K yearly mark in about 5 years.

Please let me know if this plan seems to work or if there are any things I am off on. It's high level and I understand there are a lot of details and market trends that could happen but just overall.

Thank you