All Forum Posts by: Cindi Boyer

Everyone has their own beliefs and thus this is a very subjective question.  The simple answer is:

Your passive income needs to match or exceed your expenses. The less your monthly expenses, the less monthly passive income you need. 

People use a variety of rules for calculating needed retirement income but they are often argued. Not looking to get into a long winded debate on this but this is the one I go by:

If you multiply your annual expenses by a number between 25-30, whatever number you arrive at is your needed number (higher for those more conservative, lower for those who are less). 

Ex: 

My annual expenses are around 25k a year due to paid off residence and no car payment (and would be drastically lower in a foreign country with a lower cost of living). 

25k x 25 = 625k (less conservative)

25k x 30 = 750k (more conservative)

If I'm confident in the calculations, once I have 625k parked in an income generating vehicle, be it a REIT, stock market allocation that pays dividends, or a 100 door unit, work becomes optional.

All of this goes back to what people refer to as the Safe Withdrawal Rate (SWR). This also varies depending on who you talk to, but most people who aren't alarmist are fine with 4%. All this means is that as long as you don't pull out more than 4% a year, you probably won't ever dip into your nest egg. 

4% of 625k = 25k

4% of 750k = 30k

So, if the stock market (or your chosen combination of income generating assets) makes a return of 4% or better, you should be fine to pull that amount out to live on without ever having to cut into that chunk. 

As most people I've seen post here are very resourceful and intelligent, the likelihood of a BP user just checking out entirely is something I would rate with very low odds. The excitement of a new deal will probably always lurk in the shadows, so 25x your annual expenses might even be high for you. This doesn't take into account selling assets, being hired occasionally for your expertise in your field, selling all that awesome art you created, inheritance, or finding all those gold coins in the crawl space of your trusty SFR.

I believe the quickest way to this number is reducing expenses (although boosting your income is definitely a close second, and something we're all in this thing for right?).

That's just my two cents.  See you on the beach!

@Cindi Boyer

I found my private sale on Craigslist.  He was selling two properties, when we got to talking about them he gave me his name, so I looked him up on the county GIS website and saw that he had 10 more properties.  The next time we spoke I said if you have any more properties that you would like to sell let me know...and he did...for a total of 6 properties.

The foreclosures I mostly found on the MLS....

Like many people on here....I also tell everyone(and I mean everyone)I meet that I buy real estate, so I also get a lot of leads that way....

@Cindi Boyer

 Yes, The majority of my properties were foreclosures.  Although I did purchase 6 properties from a retiring real estate investor through a private sale

Thanks, Bill. What is the best way to find them?  

ARV = After Repair Value

R/I = Rent & Insurance

DS = Debt Service

PM = Property Manager

Net CF = Net Cash Flow

@Richard C. 

My cost to Buy/Rehab = $47k
ARV after rehab $64k
75% ARV (in 2mths)       $48k

Rent                   = $1100
R/I                         $  245
PM (10%)              $  110
MTNC (5%)           $    55
D.S. on REFI         $  254
NET CF             =  $  436/month

I just did 3 of these deals in the last two weeks.
***************************************************************

My cost to Buy/Rehab = $  75k
ARV after rehab $160k
75% ARV (in 2mths)        $ 120k

Rent =             $ 1500
R/I                   $   350
PM (10%)        $  150
MTNC (5%)     $    75
D.S. on REFI   $   400   (only did 75k refi)

NET CF        = $   625/month      

****************************************************************

Joe Villeneuve
REcapSystem
A2REIC    

@Annette Hibbler 

your my partner : well not specifically but your the person I do business with.. I currently have lots of these working in 11 states... I am the JV you are the partner that does the work.. Even better than Hiring a PM.. because there is a huge pay day at the end of the line for you.. and your efforts are directly related to my profits...

AS for the goal of how much one would need to comfortably live on.. that in my mind has a lot of moving parts.. it all depends on where you live.. where you are in the your life cycle.. IE are your kids raised and on their own or are you still feeding them and saving for college or bailing them out of lifes issues..

I have a lot of experience at this.. My first HML company I had all private investors about 250 of them... And you really get to know those folks they are the ultimate passive investor most owned rentals then grew to hate them and migrated to loaning money.

But once they came into the company as a lender they would live on the interest income and only took their capital out ( usually ) for 2 reasons.. To buy their kid a home or to bail them out of Jail and pay for the lawyer... I am serious.. happens more than we know.

I have a lot of Airline pilot buddies who retired.. and they usually have about 2 mil in cash at the end of the career of course many have more and some have less but 2 mil in cash correctly invested and your personal residence free and clear can usually make a nice retirement.

I know for me everytime I get real close to my cash goals we have another freaking recession and I get knocked on my butt yet again.  LOL