All Forum Posts by: Amir Khan

Quote from @Paul Novak:

I'm looking for some perspective from others in the BP community. I am 39 years old, and I recently shut off my wife and my 401K contributions. We also stopped investing in Roth IRA's. The only money we have going into the market is in our HSA. We have shifted all our investing to real estate. To take it a step further we have been taking loans from our 401K's to help support down payments on rental properties. Below is my logic and strategy.

Our combined 401K balances are $550K and Roth IRA's are $55K. No one knows what the future holds but assuming a 7% return over the next 20 years those accounts will grow in total to $2.4M. If my retirement goal is to generate $10K per month following the 4% rule I would need $2.5M to retire. With my current balances that would be enough to get there only looking at those two retirement accounts. I also have $50K in a taxable brokerage account and another $20K in an HSA which will continue to grow.

The main part of my portfolio I have been working to grow is my real estate portfolio. Currently the portfolio is 5 properties, 7 doors, valued at $1.2M with $558K equity. This portfolio is currently generating $4,425 per month cashflow. My goal over the next two years is to buy an additional two properties. Once I acquire them, I feel confident that I can generate $11K per month cashflow provided they are paid off in full. This will take me an additional 4-6 years to accomplish. At which point I will have exceeded my retirement income goal without even factoring in my retirement accounts.

My logic is that I want my wife and I to have the ability to retire early. I feel this will be possible somewhere between my mid to late 40's. If I do, I need income to get me to 59 ½ because I can't access my retirement accounts until that age. I understand that I can use the principle from my Roth IRA's but for the most part that money is locked away without paying penalties to access it. By investing in real estate, I can use the cashflow now. By shifting all that money, we were investing in our retirement accounts to real estate it has significantly increased the speed at which we are growing. If I am putting that money to work with investments and not spending it what's the difference if I use it for real estate to fuel my retirement or my 401K. Don't get me wrong I am sure I will put my money to good use in the future, but my thoughts are if my real estate portfolio can fund my lifestyle in retirement why do I even need the additional $2.4M dollars when I turn 59 ½? At that point I am delaying retirement just to grow my accounts to a size larger than I need, that doesn't make sense to me.

I understand that by stopping those tax advantaged accounts I could be missing out on additional growth over the long run. My wife and I are also missing out on free money with our company matches in our 401K’s. For me I feel shifting to real estate is the right play which is why we made the pivot last summer, but I am open to other perspectives. I am sure there are things I am not thinking. If anyone has any other tips and tricks or things they have learned through experience I would be happy to get your thoughts.

@Paul Novak You've received some good advise here. 

One option to reach (or exceed) your goal of passive $10,000/month income is investing in real estate as a private money lender. This is a passive way of earning with real estate-based security, protection and insurance.

If you have $550K in your retirement account to invest, you can achieve $12,011/month in passive monthly income. This means you will need about 18+ loans each at $30K earning you monthly passive income (with double digit returns). 

You will need to roll over your retirement funds into a self-directed IRA account (funds would be lent from there and returned back there). This income projection also assumes all funds are deployed all at once, you can always deploy it in a staggered manner to gradually reach your desired passive income goal. DM me if you need more information about this strategy.

@Robert Ok yes you can. One good way (if you are open to it) is to house hack a duplex. Simply means that you live in one side, and rent the other side to help (or totally) pay off your mortgage. This could make your housing cost $0 if done right. It will also teach you how to be a landlord. Anything larger than that I would not approach without a bit more experience...

Quote from @Ivan Castanon:

Hello all!

I am currently reading books and educating myself about private lending. I am interested in jumping in, but I am not sure if I have enough money. I have $110k ready to invest in Florida. I would like to fund a fix and flip deal with a first lien position in Florida. 

Is this reasonable or do I need more money? I know that I should try to stay at 60% - 70% LTV. But is this possible with my current capital? Is this LTV based on ARV or the purchase price?

If I don't have enough for a first position lean, is it even worth it getting second positon liens?

Thank you!

You've received excellent advise from others here. And I agree, you have enough funds to fund something in the lower price point. Also, research other areas where you can invest as a private money lender (fix and flip is just one option)...

In my opinion, here are the minimum requirements with which anyone with little bit of experience can raise money from strangers:

1. Focus on one real estate strategy only, master it so you can explain the details well. Have at least 1 deal with proof of concept (preferably with your own funds). Document the details of this deal as your sample deal.

2. Based on your real estate investment strategy, figure out who could be the best private money lender (PML) match. In other words, create your PML avatar.

3. Find places where your PML avatar hangs out. Ideally, you are looking for places where everyone is expected to network like local reia meetings.

4. Create your pitch deck keeping focus on your real estate strategy and your PML avatar. 

5. Create your systems that allow you to seamlessly pitch, onboard and service your PMLs.  These include website/investor portal, CRM, in-person meeting space or online (Zoom), online scheduler like calendly.

The secret is to create a "system" so you can keep the flow of PMLs coming through your pipeline. 

Just as some others have chimed in, real estate has 16-17 years cycles. The most recent peak was in 2023, so we are going to see flat then going into a slow steady increase in prices over the next few years. Even though, real estate investments are not uniform in different markets and asset classes, just on the 16-17 year cycle basis and if you primarily rely on appreciation, this may be the perfect time to buy!

Quote from @Jason Ham:

Hi Amir, could you send me the information as well? Thank you in advance!

Got your DM, will do an intro..

@Blake McWilliams This is a most challenging problem with both residential and commercial investors. While sophistication of your equity partners (private money lenders) will vary between residential and commercial, the principle of raising private capital is the same.

You need to develop your own system which allows a constant stream of PML even when you don't need the funds and/or don't have an active deal under contract.

For example; I raise private capital by offering free educational workshops for people with self-directed IRAs. The workshop shows how SDIRA owners can earn double-digit returns by owning real estate as a bank. DM me and I'll be happy to chat with you..

@Jevani P. Barron first if you are within your inspection period, you may be able to terminate the contract without any reason. But if that period has expired, what would be your reason to terminate the contract?  And/or are you willing to take the risk of being sued by the seller for not performing on a legal contract (and losing your earnest money)?

Your potential buyer suggesting you terminate the contract and them paying you a fee does sounds fishy to me. Why are they proposing that if they want the property?

Quote from @Otis Clayton:

I am looking to partner with someone and when I find them , I wanted to know what is the best strategy to partner with them? What bylaws should I consider and what business strategy should we implement?

@Otis Clayton You say "I am at the point that I want a partner with some cash and credit to refi the deals I get from marketing and talking to sellers"

Based on that you are looking for someone who has cash and credit, wants to invest/benefit from real estate but does not have time to find deals.

Look for someone like that, be clear on their role and your role. Create an agreement so both parties are clear on what is important to each of you, then have your attorneys sign off on it.

Hope that helps..

Quote from @Frank Alfano:

Quote from @Amir Khan:

Quote from @Frank Alfano:

Thanks, Amir—this is incredibly helpful feedback! You’ve given me a lot to think about, especially regarding refining my ideal PML strategy. I’m new to private money lending, so while I understand the concepts in principle, I’m still figuring out how to identify and connect with these investors in practice.

To clarify, I’m targeting 6+ unit multifamily properties, and private money is a way to scale my expertise from smaller properties into larger ones. My goal is to stabilize, refinance within 3-5 years, and offer strong returns to lenders.

Your point about targeting SDIRA investors and high earners is interesting—how do you typically find and connect with these types of lenders? Do you focus on networking events, direct outreach, or something else? Thanks again for sharing your insights!

I collaborate with large custodian companies. In additional to conducting educational workshops, I also write blogposts for their websites. You could organize your own in-person event and market to your avatar.

Thanks, Amir! When you say ‘market to my avatar,’ are you referring to a specific type of audience I should focus on?

@Frank Alfano Avatar is your ideal prospective client. This is based on demographics/interests including age, profession, income etc..