All Forum Posts by: Steven Barr

In my market (Massachusetts) when adding additional space we need to pull a permit.  This is usually good enough for the appraiser to take into account.  There is a caveat with this as certain things wont be taken into account at 100% value.  For example a finished basement is not worth as much per square foot as the main living area.  When I list I usually take this at 50% value of the main floor price per square foot.  Appraisers don't use this exactly but, as explained to me by an appraiser, its a bit of a sliding scale and depends how much is above or below grade.  The easy way is to measure it yourself tell the appraiser how much square feet you added

Was the additional share footage permitted work? 

Challenge: How would you achieve a goal to make $30k a month in rental profit in 5 years?

Newbie here. I've set a goal for myself to make $30k a month in rental profit in 5 years (shoot for the moon goal for me). I have some cash in a retirement account that I want to stretch as much as possible to achieve this goal. I know it's not enough to make a down payment on a 5 fam+ unit though and I figure I need as many of those as possible to achieve the goal. So my plan is to:

1. Flip as many houses as I can to raise capital for the down payment on the MFDs. I already have one under contract that should net me a conservative profit of $50k. Another oppty just came to me this week that looks to be similar. But I don't have enough $$ to do both (ugh!) b/c I'm putting my cash into the first flip (need to figure out how to stretch dollars :)

2. Use profits I make from flips to buy a MFD.

3. Take the equity out of the MFD and reinvest that in another oppty (flip or MFD).

Keep doing this as long as I can.

Seasoned investors, how would you make this goal a reality? Any advice on the above plan would be greatly appreciated!

We have been coast /medium FI for years and utilize about 60% of our free cf total.  This includes health insurance and taxes. 

The type of cf matters as well.  60% of ours is from seller-financed mortgages.   These don't vary so are more stable than rent. 

I would be more conservative if all my cf was from rent. Most of my op expenses on rentals run about 36% self-managed,  50% with a PM but I've had $30k outflow months so need a fat EF. 

60% works for us but we live pretty modestly and don't have a mortgage.  We are actually paid to live in our house, net of all expenses (t/i/m/r/u) or even our cell phones and internet because of a MIL apt. 

So everyone's situation is different.  We started building what freedom looks like to us 20 years ago by living in a trailer park on purpose for 5 years when we started.  

Whatever your calculation, don't forget health insurance or taxes.  Most do. 

If your cashflow is $30k per month then you must own a ton of real estate! Nice job. Hopefully you are funding savings accounts for each one of those properties for repairs, cap ex, and vacancies. That will help you weather bad economic times.

Assuming you area already setting aside savings prior to paying yourself that $30k per month, I say live on as much of it as you want! I do not have this much cash flow coming in as I'm much more of an active investor lately (flips) but if I did I would probably do:

$10k - Salary to live off of

$10k - Into a broad market index fund like VTI or VOO

$10k - Into a savings pot for future investments, vacations, toys, etc.