I will try to cut to the point, im a complete newb, 13 years left before retirement in the military, I will be 38. I will have somewhere in the area of 20k in retirement compensation going for me a year. I desire to see that number reach 50+K per year. I rent have 15K saved up, only have a truck to pay for, and insurance on a car and the truck to pay for. I have 2 kids, and would love to be able to do with as I please with my life after the military. Soon to be headed home from the desert to see my family!!! And when I get there I will read as much as I can find on everything real estate investing. But I favor direction, what direction would lead me to the goal of complete retirement in 13 years? Renting out properites? Trying to flip? Where should my family and I live? I dont believe it would be in my interest to buy a house for my family to live in financially, but paying somone else’s mortgage seems to be competing with myself? I will also be moving around quite a bit, I will have no one to look after the properties I aquire through my travels. I have been reading for quite some time on the internet about everything, and there seems to be an overload of information, and im not sure what the best avenue towards passive income could be. Anything to help me straighten my thoughts (still a fresh noob) and get a strong game plan to really start learning in a specific area would be more than appreciated.
My suggestion is to learn to wholesale first, then rent and finally flip. I would recommend that order but everyone takes their own path
Best way to break in is either with wholesaling as was mentioned above, or with options and lease options, which are much easier in my opinion.
Hi JoeMan…
I really appreciate you asking this and they are really, really important questions.
First, thank you for serving in our military. I really appreciate you doing that and the sacrifices you’ve made for us. Thank you.
From what you said, you will need to increase your income by about $30K per year… that’s doing one good buy and resell a year. Or, if you want to go the rental route and if you break it down monthly, you probably will need about 5 free and clear properties that are grossing about $1,000 per month to really net $500 per month each ($2,500 per month between the five). That would also get you about $30K per year more.
They are two very different plans though.
Also, there is a 10 year retirement plan laid out in the book “Creating Wealth” by Robert Allen that, with some small tweaks, could work for you.
If you’re more inclined to do the rental property route I mentioned above you can get to 5 free and clear in 13 years if you’re ready to roll up your sleeves and get to work. Here’s one (of many ways) to do it.
If you can average 2 buy and resell deals a year, that would mean that you’d be able to do about 26 in a 13 year period. One buy and resell deal every six months is definitely achievable. 26 deals at $30,000 net per deal is about $780,000 (if my math is correct). For every 4 deals you do, you buy a $150,000 property (ideally at a discount) and keep that as one of your rentals.
Some of the questions you’ve asked can be very long discussions on their own. For example, where you’re family should live is a long, complicated issue. Can you invest long distance? Absolutely, I ran a national wholesaling business in 280 markets simultaneously. It has its own unique challenges, but it can be done if the reasons for doing it are strong enough. It is MUCH, MUCH easier to do most types of investing in your own market (save maybe wholesaling).
I am a big believer that you should ultimately OWN your own and not rent, but flipping a few properties to buy the home you live in outright is a great plan and what we discussed earlier will allow that.
I strongly recommend getting a great property manager to manage your properties for a variety of reasons including it frees you up from relatively low dollar per hour tasks to do much higher dollar per hour tasks like doing your next deal. This will also allow you to travel with far fewer worries. The estimated numbers I included above do take into account a professional property manager.
If there is anything I can do to help, let me or others on the forum know.
Again, thank you for serving.
Joe,
You’ll need long term cash flow to reach your goal. The way to have steady cash flow would be to build a rental business. The down side is having to deal w/ tenants. You could do flips for money too, but you’d have to keep finding deals. Once you build a rental business where you want it, you just have to maintain it. For your personal residence (since you’ll be moving around every few years), consider living in base housing. Many bases have really nice housing now since the gov’t has spent lots of money on quality of life items during the past few years. It’s generally going to be hard to find a house in town that’s a better deal financially once you consider not having to pay utilities and just sacrificing your BAH.
I know some people who have held on to properties they’ve lived in when they were stationed different places. Most of the time, the rent doesn’t cover the mortgage. I know several people now who are paying out of pocket just to make the note payment from their rentals. Every time you rent a house out in a new market, you’re going to have to find new repair people, managers, etc.
I also wouldn’t necessarily set my final goal at 50k. At some point, you’re probably going to want more coming in than that for a family of 4. For now, the best thing you can do is keep your expenses low so you can have money to invest.
Being in the military presents plenty of challenges for developing a business, but it can be done. I have pretty much the same goal as you do and I’m on active duty too. Good luck.
my first deal was a Lease Purchase. i decided to go that route because so many home owners cannot sell their house or for the amount they want. there are so many LP leads i just started making calls. it took awhile to get that first deal because i really didnt know what i was doing lol now i deal only with REO’s. read throughout the forum and see what strategy suits you, there’s alotta different ways to acquire real estate with no more money or credit. good luck
Thank you very much everyone for your responses, I will take everything into consideration and study up until I figure out a solid plan. And then flip it into action.
You are very welcome. Glad to be able to help.
You will learn so much by starting to take even just a little action and it will make the studying and planning that you do so much more effective that I might suggest you that you start talking to a few sellers even while you study.
If we can help in any way, let us know via the forum. There are some amazingly helpful folks here.
I’d love to hear how you’re doing on your journey, so please keep me in the loop with updates. You can do it!