Hi guys,
I love to see all of the success stories but I have noticed I just don't have the income to keep investing past 1 property.
Here are two real world strategies that I used with my clients:
Success story A
Step 1: Bought a condo for $175,000 in 2013 in an up and coming area that cost less per month than market rent. Lived it in then rented it out. Cash flow was around $350 per month.
Step 2: Sold the condo using a 1031 exchange to roll over the taxes.
Step 3: Bought a primary home in a LCOL city for $200,000 and rehabbed it. Now worth $350,000.
Step 4: Bought a four multifamily in a LCOL for $500,000. No rehab needed. Now worth $650,000
Step 5: Brought the four family rents up to market rate which is $5200 per month.
Time to complete: 10 years.
Cash flow went from $350 per month to $2,000 per month.
Properties are now worth around $1,000,000.
Success story B
Step 1: Bought a condo in 2014 in a HCOL city for $200,000 and rented it to a roommate (house hacking).
Step 2: Moved out, rented the 1st condo for $1800 per month.
Step 3: Bought a new primary home in a LCOL for $175,000 which costs less per month than rent.
Step 5: Moved out of the 2nd property and rented it for $1850.
Step 6: Rented an apartment with somebody else. Saved $1,000 per month in monthly housing costs.
Step 5: Saved up the cash flow money and bonus money from their work.
Step 6: Bought another condo $250,000 in a HCOL city that cash flows with 5.5% rate and 25% down
Step 7: Raised rents on all 3 properties to market rate equal to $5,800.
Time to complete: 9 years.
Cash flow went from $300 to $1500 per month.
Properties valued at approximately $925,000.
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Each client started with a 5% down payment, was in the early 30s, and didn't make a six figure income. No family help either.
It's possible to build up a portfolio with time. Time is the key because over-time rents and home prices rise.
