All Forum Posts by: Lucas Mills

Ain’t no way I’m going to spend another 5 years of my life to make an extra 20k per year in order to put myself 100k into student loan debt. Surely I can make up for that difference in income with creative investment strategies as you have alluded to...

So where does that leave me? In your opinion what path makes the most sense to this goal?

Perhaps my estimate was way too optimistic, but, I was assuming I’d be able to reinvest money 2-3 times per year.

Hey Caleb; good question. That’s something I’m still trying to determine, myself, and to find a balance between the different strategies available to me.

I’m looking for a balance I think. I tried a very aggressive approach and burned out. I tried buying and selling houses on terms, and the sky is really the limit in terms of how much you can make and in what time frame. This may be an excuse for not working harder, but I feel that I could succeed more readily if I had more time and funds to devote to this, as it is a numbers game and I wasn’t reaching enough sellers. I feel like I need to be able to send out hundreds of letters every week, as well as place signs around town on a continual basis. And currently I just don’t have the funds to support that.

So I don’t think that aggressive of an approach is for me, at this point. That said, I don’t necessarily mind a higher risk, higher reward approach if it’s at least a somewhat reasonable way to proceed.

Someone mentioned becoming a private lender. If I save hard for two years I can probably put back 50k. I know this isn’t a ton, but perhaps I could lend that money out 2-3 times per year making 8%-10% each time? I haven’t done the math but I bet I’d be close to 200k if not more after 5-6 years. But, how smart is this approach? How possible is it I could lose all my money in a single deal gone wrong somewhere along the way?

Something like that, while riskier, interests me because it’s a more passive way of building wealth but still fairly aggressive, or so it seems. The thing I disliked most about trying to buy houses on terms was that it made me feel like a salesman, so I like the idea of not having to feel like I’m trying to sell people on an idea.

Then someone else mentioned notes. I don’t know anything about this but I’m meeting with a local guy on Fri who does this to discuss. Maybe this is another good way to proceed?

Basically, I want to move forward as quickly as I can without having to feel like a salesman and churn through countless sellers to do deals. That might mean that I’m ok with being an “active” investor in some capacity, but I just don’t know what all is out there yet. This thread is certainly helping expose me to other options.

So to summarize, I really like the idea of being an equity investor and recycling that same money multiple times per year to accumulate wealth. And then once I’ve got perhaps 500k ‘ish, transitioning to a more conservative/passive investment model which will let me take my foot off the gas and enjoy life on my terms.

Right now my favorite option is saving up and being very frugal for a couple years, trying to put back 50k, and then beginning to invest that as an equity investor multiple times per year until I reach a certain point at which I can meaningfully invest in a more passive strategy like notes, or something like that. But if there are problems with this general approach or perhaps other/better ways or alternatives I’m open to hear them. I would LIKE to meet my 3k/‘month goal in 5 years so if there’s a more active alternative that fits with my general preferences I’d be interested to hear something that might support that, because I don’t think I’ll get 500k in 5 years the way I proposed (equity investing starting with 50k - which will take me 2 years to save up in and of itself).

Thanks for the reply, Joe. Just a little background; I'm a physical therapist assistant and have been for a little over 4 years now. My desire is simply to have more free time to pursue other interests. Things like travel, first and foremost, because I have not been exposed to many other parts of the world and/or other cultures, and I would like to be. But I would also like to try my hand at other things, like game development, for example. I am not currently skilled in this area, so I'm not disillusioned to think that I'll be able to make a living doing so - that's why I'd like to have 3k-5k in "passive" monthly income beforehand so that it won't kill me if it doesn't work out.

I tried my hand at wholesaling. I also tried my hand at the whole "buying and selling on terms" thing. I actually did get a house under contract for which the seller agreed to sell "subject to" their existing mortgage. The seller's agreed to sell me their house for no money down, and I was simply going to take over their monthly payments. I marketed the house on craigslist, fb marketplace, etc. as a "handyman special rent to own" and it generated a fair bit of interest. If I had closed the deal (on the buyer's side) I would've secured about $200 in positive monthly cash flow as well as a profit of about 30k after the house sold (on lease purchase) a year or so from that time. I had 3 or 4 different buyers give me down payments but I had to return them all because I didn't like the buyers for various reasons (one had a little too much criminal history, etc). Overall, it was an exhausting process and I feel like I got burnt out on the whole thing, despite being relatively close to the finish line for this first deal.

To that end, I feel like perhaps this stuff isn't actually my passion, so I shouldn't waste further time or money trying to pursue it. My passion is actually passive income - freedom from my w2. I'm not sure that actually qualifies as a passion because I'm sure most everyone would say the same thing. That's not to say that I don't want to use REI in some capacity, but maybe I should choose a different strategy that doesn't take quite as much personal investment.

I can probably only put back a maximum of $1,500 to 2k each month (if I'm really living frugally). So in a year's time I could save up probably somewhere between 15k and 24k. I'm trying to decide how best to utilize that money in order to work towards my goal (of 3k-5k in "passive" monthly income).

I keep putting passive in quotes because I'm ok with something that might require some kind of intervention here and there, but presumably not much. Something that would allow me to travel for a couple/few weeks at a time and etc.

I could save up to buy 5 cheaper houses in my area which might get me $500 a month after expenses (if the houses are paid off). If these houses are 50k each for 250k total, this would take me about 12 years to save up that amount of money (not taking into consideration that each house would expedite the process to some degree as it's paid off). So these 5 houses might provide me with about 2.5k after expenses, assuming that the mortgages are paid off on each of them.

That's a good start. And it would certainly allow me to quit my job, or at least take a few months off if desired. And more houses would come more quickly after that if I continued to work (as I'd be supplementing my w2 income quite a bit at this point).

However, at 50k, these houses will be "cash cows", and probably attract a certain kind of tenant which may not be easy to manage. Plus, 12 years is a fairly long time.

I don't know how accurate all this is. Just sort of my stream of consciousness that I'm writing down here. Would like to see your thoughts on all this.

I'm trying to figure out how I want to approach real estate, retirement, etc.

My desire would be to build up about 3k-5k in relatively passive monthly income. Or at least, passive as it relates to my currently working 8-5.

I don't have a passion for BRRRR. I don't have the desire to talk to hundreds of sellers trying to find ones who might sell on terms, and etc.

So where does that leave me? If I could save up 100k in a few years, could I do something with that money that would accomplish my goal, or at least take a big step towards it? I was thinking about the idea of buying an apartment complex, but if I'm only able to provide a 20% down payment with 100k (so a 500k property), how much income would I really get each month after expenses?

The question I should be asking is, what strategy makes the most sense for me? I would rather continue working my job, save up money over the course of a few years, and then do something with that money which would, presumably, make some progress towards my goal. If I try buy and hold with a house, that just seems like it wouldn't really help me in the "here and now", because I wouldn't really be getting much passive income until the mortgages are paid off some 20-30 years later.

Now if I were to take over a mortgage subject to, the bank can technically call the loan due, but they probably won't as long as payments continue to be made.

Does the same apply in this scenario, that they "technically can" but likely won't? Or is it a little different with a reverse mortgage, since they're paying the owner each month?

And let's say that the loan is called due - could her son potentially refinance with a mortgage in his name then I could take over that subject to and continue on?

And if so, what considerations should be made?

I'm speaking with a seller who's father recently passed away, and the mother can no longer keep up the property. He's open to lease purchase, but is unsure how that might work with a reverse mortgage.

How does this work?

When I’m driving around, I want to be able to place a marker when I’ve found a house I’m interested in. Or, when I put a bandit sign down (to keep track of its location). I assume this would interface with my smartphone’s GPS.

I would like to be able to label these markers, and it’d be great if the app would filter what’s shown on the map based on the labels. It would also be nice if there is a desktop interface as well.

What’s out there that does this, or something similar?

Great post. Thanks.

Hypothetically speaking, let's say I start with 30k cash reserves. And each property I acquire subject to for $0. Each property gets a tenant-buyer under lease option with a 10k option payment. Each lease option is for 2 years.

So per property, I'm getting 10k up front, and again every 2 years (or possibly more if the tenant exercises their option). After 5 years, if I acquire 2 properties per year, and assuming no one has exercised their option yet, and also that they continue to pay 10k every 2 years, my cash reserves would be 190k.

Even if I am 50% off, at 95k cash reserves after 5 years, is this not fairly adequate and reasonable for 5 properties? Assuming that each properties monthly expenses are 1k, 95k would be enough to float the properties for about 1.5 years with zero income. Is my line of thinking correct and reasonable?