All Forum Posts by: Nicholas Daniels

@Eric C.

That’s just the first number I’d like to hit. Just a goal, financial freedom will come with it!

@Eric C. My area doesn’t have hardly any duplex, triplex or fourplex. It’s a fairly expensive area.

@Aaron K. I agree but this is just one piece of my millionaire plan. I don’t want to be all real estate, I want stocks and other things as well. My goal is two single family houses because I can have the rental income from those let me live in my dream home.

Hey BP!

My current goal is to become a millionaire by 30! I’m currently 20, meaning I have ~10 perfectly good years. I’ll be graduating college next year debt free. I should make ~$60k/yr if I bust my ***.

My main goal is to have 2 houses paid off. I don’t want to leverage my butt off, I like the Dave Ramsey style and simplistic gameplay. I’m set on single family homes, those are most popular in my area and I might raise a family in one later on.

My current plan would be to buy a single family 3 bedroom 2 bathroom house ~200k. I could rent both rooms for ~600 each and the mortgage property tax, insurance etc would be ~$1050/mo. I’d manage the place myself. I’d put 20% down = 40k.

If I dumped an extra $1200 a month into the property that’d be $2200/mo. Plus the $1200/mo rent that would be $3400/mo total going into the mortgage. If I owed $160,000 I’d be mortgage free in ~4 years. $160,000/$3400= 47/12 = 3.9.

I could buy another house with the same specs, rent it and continue to live in this house. Dumping all money into paying off the other house. The second house would be owned free in ~3.5 years if I pay aggressively.

Each house should rent for $1500/mo when rented to one individual, and have expenses ~350/mo. Meaning each house would cash flow me 1150/mo each, 2300/mo each, or 27,600/yr.

I was wondering what you guys think of this goal. The houses should be worth 250k each which would be half of my millionaire goal. (I also have some other ideas to close the gap.

Is there any other ways I could get there quicker or a better strategy?

@Nic Stergion

What about for cap ex? I’m assuming 20% for vacancy, repairs, AND CAPex.

I’m assuming 20% total for vacancy, cap ex, and repairs. Then 10% for pm.

Can I lower these figures if the houses are in good areas?

@Theresa Harris I assumed 5% for repairs and 5% CAPex

I have a Goal if Retiring in 8 years. I’m currently 20 years old and in college. I don’t want anyone asking why I want to retire, it’s my personal business. I’m just asking someone to review my layout and tell me/give me advice on how to execute this plan. Note, I’m a minimalist and can live under $10,000/yr.

I’ll be graduating at the age of 21. I’ll have roughly ~$15,000 to invest. No debt of any kind, and a credit score of 720+.

Firstly, I will purchase a single family home for ~$100,000 using either an FHA (3.5%+ down) or home-possible loan (5%+ down). This first property will be a HouseHack, I will live in one room and rent out the other two rooms. Three bedrooms are the most common in my area (Grand Rapids Michigan).

I will be earning roughly ~$55,000 when I graduate. Even if I earn $45,000 I’ll be willing to deliver pizzas or have some other extra job and make the extra $10,000.

After taxes ~22% I’ll be left with ~$42,900 left. I’m assuming I can live off ~$12,000 a year. This is assuming no housing expenses which will be eliminated with the househack. This leaves me $30,900 a year to invest in real estate after all expenses and taxes. I will pay off the property I live in in roughly ~2.5 years. $30,900 x 2.5 = $77,250 from my own income. Then we have the renters over the ~2.5 years will pay off the difference as well as money left over after the purchase. I’ll also put probably $10,000 into making long term fixes to lower expenses and increase rents.

This property I conservatively estimate will cashflow ~$650/mo or $7800/yr. This is assuming a 7% vacancy, 10% property management fee, 5% repairs, 5% CAPex.

Okay, so I have 1 property with a cashflow of $7,800/yr. In 2.5 years I’ll stack up ~$96,750 dollars. Cash flow off first property $7800 x 2.5 = $19,500. My savings $30,900 x 2.5 = $77,250. $77,250+$19,500 = $96,750. I’m assuming I’ll be able to close the ~4-10k gap and pay cash for the next property and fix it up with roughly 10k assuming the same numbers as previous property. These properties are all over my area.

Okay, after 5 years I have two properties owned with cash. Each cash flowing $650/mo would mean $15,600/year cash flow.

I’ll work for 2 years saving the same $30,900/yr. so that’s ($30,900 x 2) + ($15,600 x2) = $93,000 a year. Again I’m assuming I can close this $15,000 gap. Either through working more or getting even an inflationary raise throughout the process would give me more than enough. I’ll purchase the same type of property, same numbers and repeat the process.

Alright so after 7.5 years I have 3 properties cash flow of ~$650/mo each. This gives me a total monthly cashflow of $1,950 or $23,400/yr.

I should be able to retire given this income. That $23,400/yr will cover all expenses I have, and actually increase my standard of living from the $12,000/yr I was spending.

Any holes in my plans? I was conservative with both raises, incomes, and rents. Also, I was conservative with vacancy, CAPex, and repairs given that these properties would be fixed up and payed with cash I could be more picky about who rents.

@Anthony Rosa I believe the properties would increase in value, no guarantee of telling that but even with inflationary gain they’d double in value.

I would max out an HSA account and healthcare will be “free” by then. Lol

@Tue Huynh-Nhut Vo True. But I’m under the assumption we will have a large recession within the next ~20 years. Most likely vacancy rates will hit 60-70+% and I don’t wanna have risk of getting wiped out like many in 2008. Also, I don’t need that much so why be greedy?