Hi there -
Sorry if this is a pretty broad question but we're just about to get started in REI and after reading a lot about the topic - and listening to a ton of episodes on the BP podcast - we're currently figuring out our strategy going forward.
Our ultimate goal is to build a small portfolio to generate income for retirement.
So in a nutshell our current idea/strategy is to..
- Invest in rental properties,
- Ideally small multi-family (duplex, triplex)
- Finance 75% on a 15 year (as we're no longer in our twenties..)
- Monthly cash flow should be about 100-150$ per unit starting from day 1
We'd like to use the latter to retire early on a frugal lifestyle using the cash flow and possibly other streams of income before the properties are debt free!
And that's just where we are currently pondering if our strategy is feasible -
As we'd like to use a 15-year mortgage and savings allowing us to come up with 20-25% of the purchase price up front we did some number juggling.. using the BP rules for rentals, i.e.
- roughly 1% in monthly rent, and
- 50% of the rent usually going towards expenses, insurance, vacancy, etc.
that leaves just barely the amount required to cover the mortgage payments.
So we'd like to run our idea against you folks to get some feedback -
Is it too ambitious/unrealistic? Or could it be made to work when finding just the right deals?
All feedback appreciated!
Cheers,
Jay
