Financing will be the key. At 10+ rental properties you will be toxic to most banks/lenders. Anyone who will lend to you, take advantage of until they say no more. Think about your story, what your taxes need to look like and what you will need to do to sell a bank on your landlord business.
Since I currently live abroad and will have to invest long distance regardless of location, I have the flexibility to pick my target market based only on the macro trends, financial issues (tax etc.), deals availability, and the quality of the local team I'm able to pull together. This will be the subject of another post.
I would DEFINITELY get an education before taking on a goal that aggressive of 100 units in 5 years. I also would reconsider the numbers. $100 a month is only $1200 per unit per year. One roof would set you back years, or one furnace would cost you one year. Even if the unit was all fixed up and didn't need repairs for years (unlikely), you still have vacancy. If just open one month and a mortgage (with taxes and insurance) is 500, now your down to only $700 a year (not including turn over costs). I would rather you set a goal of 50 doors that make a minimum $250 a unit per month. There are plenty of these deals out there. In my experience, $350 400 would be not be hard to hit. PLUS 50 units is less time consuming than 100 units. PLUS less down payments and rehab, so that's less money out of your pocket. PLUS less rehab also means you can move onto the next deal quicker, resulting in reaching the financial goal sooner.
This will make a big difference in how you can achieve your goal. It will get easier as the years go on, but if you don't have a lot to work with, it will be slower going. Especially because you cannot count the rental income while looking for financing for the first 2 years. REI is more of a marathon than a sprint, but it is entirely possible given the right conditions. If the goal is $10k/mo, it would be achievable with just 40 doors if you could work harder for better deals in the $250/mo range.
You are one of the few people I've read a post from on here that I have full faith that you, sir, will absolutely rock it out. And you are totally someone I would mesh with if I ever met you! I say that just to say it's great to hear someone who wants full lifestyle design and is driven to figure out how to get it.
To maximize the return on time invested, aiming to focus on multi family properties (2/3/4 units) to allow me to reach my goal with less total transactions (less loans, less overhead, etc). Possibly 1031 to a larger commercial sized apartment complex in the future.
Putting together the right team will be a major focus. Agent, inspection, lender, PM, etc.
Deal flow would initially be off MLS, agent, turnkey provider. But branching out quickly into direct marketing, once I've worked out the mechanics and have a solid process for financing and management.
A few rough ideas on strategy:
I think your plan is great! I was just meeting with some clients today and we were talking about exactly that. I said to them, quote, "Don't ever let anyone tell you your plan is too aggressive. You can be as aggressive as you want. As long as you realize, never ask 'can' you do something, ask 'how' to do it." If you want 100 doors in 5 years, rock on. Figure out how to do it. You're already miles ahead of other people. You know what you want, you know why you want it, and you've set a goal. That's way more than most people do. Now, you just have to figure out how to accomplish it.
You should focus on very specific inventory in a specific market. At 10+ rentals in a market you start achieving economies of scale. At 60+ we achieved major economies of sale (in house passive management).
There will be set backs and bumps in the road, expect them!
Systems are important and let them develop or evolve naturally.
up the goal since you probably don't get all that close to that with "only" 100 doors."Real Solutions for Real People"
I intend to keep my day job for at least the next 5 years. My wife and I make a decent income which should allow us to purchase 3 4 properties a year, as well as re invest all cash flow into mortgage payoff and new properties.
I agree with others that the number of doors is not as good of a target as a income/cash flow goal. If you want to pull in $10K a month then at 100 doors you are only making $100 per door per month. That is actually not a very good return, especially if that is your average. If you held out for deals that gave $200 per door (very realistic) then Nike T Shirt Kids you only need 50 doors. Now if you want to have $100K per month then you better Nike Dri Fit Socks Mens
and if you have any words of wisdom to share, I would be eternally grateful.
Well, there it is at a high level. Thanks for reading this Pants Nike
I have no idea how I will go from zero experience to 100 doors in 5 years. However I do know that without a specific stretch goal, simply dabbling in this new field will not get me to where I want to be. This thread therefore serves the triple purpose of committing my thoughts to paper, soliciting feedback from those more experienced, and putting me on the spot in front of the community to commit to my goal and deliver!
far, Nike Black Sweater
Financing will be the other major focus. I want to maximize the first 4 loans that I should be able to get conventionally. Preferably do these with a bank that also does portfolio lending to build a relationship there. Then focus on portfolio loans, private money, and seller financing.
You should think about quitting your job earlier. You want to have 10,000/month in somewhat passive income. But to get there you think your job is more important/stable? In my opinion (without know much about your situation) once you start getting some traction you should put a lot of energy into that.
100 Doors in 5 Years
It is great to have an ambitious goal and it is clear that, even though you don't know everything you need to know, you have put some real thought into this.
First off, a million thanks to everyone who read and responded to my post. Just the fact that it got over 600 hits in under a day helps me feel I'm on the right track in terms of a goal that will keep me motivated.
Looking forward to connecting with the many great people here, and to the challenges ahead!
You're also incredibly smart to be willing to venture to whatever markets are the hot spots and where the good investments are. A lot of people aren't willing to do that.
Lastly, I don't think your door count matters, it is what you take home.
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