All Forum Posts by: Tom Gillotti

Crazy awesome story!! Thanks for sharing!

I posted this in another location but I wanted to reach a larger audience.

I joined Bigger Pockets yesterday after watching a ton of their videos on YouTube. I don't normally like to talk about what I do to the online world but I stumbled upon this sub-forum and I figured this would be as good a place as any to talk about my plan.

I'm currently in year 11 and have a contract that takes me to 2024. My goal is to completely offset my projected income by 2024 so that I will have the option to walk away if I should decide that I want to (likely will not but having options is what I want most). My projected gross annual income in 2024 is ~$130,000 (with all things added in and a few assumptions made).

How I plan to do this: (THIS IS THE PART WHERE I WANT PEOPLE TO PICK APART MY PLAN. IF THE BABY IS UGLY... CALL IT UGLY!)

2024 is 6 years away

I plan to spend the next 6-12 months learning and studying deals

I estimate that in order to replace ~$130,000 of gross annual income I will need to have that same total of net cash flow from my properties by that time (I currently only own two single family houses)

If I make the assumption that the deals that I find/buy return $500 per month of net cash flow then I will need a total of 22 properties to equal $132,000 per year (22 * $500 = $11,000/mo. * 12mos = $132,000/yr)

The $500 per unit estimate is not a per door estimate, rather a per unit estimate. So if I start with a duplex or a quad as my first property my goal would be to have a net cash flow of $500

I intend to use the "BRRRR" (Buy, Rehab, Rent, Refinance, Repeat) method but have never used this strategy before so I still have a lot to learn

If I only close on two deals starting in 2019 then I will need to find another 20 deals in the remaining four years (2020-2024) that also meet this criteria

Beyond 2024 I plan to continue to scale even more over the next 3-5 years with an end goal of financial independence by ~2030 (meaning that I will not work a "day job" but will passively manage my real estate portfolio)

Biggest hurdle: I'm going to be living outside of the US for the next 3 years and will (likely) not be able to physically see any properties that I plan to purchase. This may be a recipe for trouble with buying properties that need work done but that's why I'm here. Also, I have very little capital at the moment but I anticipate being able to stash some cash away in the time that I'm researching (I have no debt other than the two houses I own; one is rented and I plan to rent the other when I move out of the US).

Some more background: I grew up in Western New York (Niagara Falls, Buffalo). Have lived in Northwest Florida and central Texas. I'm open to any market but would prefer to avoid Texas as I hate their outrageous property taxes and would prefer not to send them any more of my money. We hope to live somewhere in Florida if/when we retire (open to suggestions!).

Questions:

Where should I start?

Which market, how much to target for the first deal?

Is the $500 per unit too low?

Is the $500 per unit too high?

Should I start with the BRRRR method or find something that already cash flows/needs little work?

What are the benefits of not using the BRRRR method, and are they worth it?

What haven't I considered yet that some of you may have already dealt with?

You certainly don't have to answer all of those questions. I was just trying to brain dump everything I could think of that might be relevant and might get you thinking about some shortfalls in the plan. I look forward to your responses and any experiences you have and can share. Hopefully others will find this topic as well and learn something from it.

Thanks in advance for any and all replies!

@David Niles Truth! I've often said I'm in a 30+ year abusive relationship (with the Bills) and if any psychologist looked at it on paper they would lose their minds... I love them til death do us part though... and most seasons I Wonder if they'll be the catalyst for the death part ;)

Hey Lisa! I am originally from Buffalo... moved away in 2007 and haven't looked back. Still-and always will be- a HUGE Bills and Sabres fan. 

If the weather were nicer I'd probably consider moving back but I certainly don't miss those winters. I'm currently in Texas but have lived in Florida as well. Some other short-ish stints in other places as well... We should be moving again soon (Texas was not our favorite place to be and hopefully won't go back). 

I always love talking to people from back home and have considered real state investing in that area because I am familiar with it and still have family there. 

Hope you have a ton of success!!!

Hey Kurt. Unfortunately, I can't help you with any of the things you're looking for. Just stopping by to say welcome to a fellow newbie here on the site. I am currently in Texas as well, a few hours to your west but will be leaving the area in the next few months. Hope you crush your goals!!

Welcome! I am new as well! Wish you a ton of success!!

Welcome! I'm new as of today as well! Wish you a ton of success!!

I am a 34 year old married, father of one. My job requires us to move every few years and we decided to purchase a house at each location as a rental/investment property. This all started by accident when, in 2012, we attempted to sell the house we own in Florida and quickly realized we were upside-down. We decided to rent the house instead of taking a loss and have been pretty happy with the results thus far. The other house we own is in Texas (property taxes in Texas are ludicrous, by the way...) and are expecting to move soon and will be looking to rent as we've only owned the house for a little over a year. Both properties are/were new builds.

Why we're here: We want to grow! Like most other people here (I assume), we want to create more streams of income. While it would be nice to have completely passive income, I understand that real estate is not fully hands off and I'm ok with that. Ultimately, we would like to learn more about real estate and start to scale our business and get it to a point where we surpass our income from our current job(s).

The goal: The current contract I have with my job takes me through 2024. I would like to continue to scale to the point where we have matched my income by 2024 and allow us the option to walk away at that time and focus solely on our real estate portfolio. I don't believe that I would actually walk away at that point as there are other benefits to remaining with my current employer for several more years. I estimate that my income should be around $130k by 2024.

Ten year plan: In 2028 I hope to be fully retired from my current employer. My son will be 15 years old and will be in high-school. We will likely find ourselves back in Florida but nothing is set in stone. I am from Buffalo, NY and my wife is from Northwest Arkansas. Both of us love Florida and constantly find ourselves drawn back there. While we anticipate Florida to be our homestead we also love to travel and would like to be mobile for at least part of the year (possibly RV travel). Ultimately, we want FREEDOM!

My four 'F's': Family, Finances, Football, Freedom

Family: God, wife and son, family members, true friends

Finances: Money can be evil, but it is a means. I love to talk about finances and to help others gain more understanding. I am far... FAR from a master and am always looking to learn more.

Football: I am a life-long Buffalo Bills fan. It's a passion. It's a religion. It's life.

Freedom: I appreciate the freedoms we have as Americans but I also desire true freedom from the schedule of others. I want to be on my own schedule and answer only to God, myself... and my wife!

I will update this as I find more information that will be useful. Hopefully this paints a picture of who I/we am/are.