What if you could replace your day job (the old 9-5) with passive income from real estate? I know for a lot of people this might sound overwhelming, but if you break it down you can be there in no time. This is something that I am currently working towards and this is something that I have seen other investors do.
I came up with this for me to help simplify things. It made it more achievable and it helped me keep clarify my plan and goals. My goal is become financial free and I am passionate about real estate. In order to do that though like I said I need to come up with a plan, so I came up with this.
That is why I came up with the FINANCIAL FREEDOM CHEAT SHEET (Get It Below). This cheat sheet is to help you come up with our financial freedom number as well as help you figure out how to achieve that number.
In my plan I am using 2 different strategies:
I have hava duplex that nets me $600 and I have had single family homes that net me $300 a month. On average I am seeing that I average around $300 a month per unit. This $300 comes after Mortgage, Taxes, Insurance, Maintenance, Utilities, Vacancy. I know $300 per door/unit can be hard and is high for some markets (they are out there). My goal is $200 a month per door/unit and if I can achieve higher returns then great.
Example (Duplex):
Purchase Price 100k
- Gross Rents: $1,500
- PITI (Principle, Interest, Taxes, and Insurance): $450-500
- Vacancy, Maintenance, Utilities (25-28%): $375-425
- Net Income: $600
$300 x 12 months = $3,600 a year
$75,000/$3,600 = 2o.8 units (so 21 units or 10-11 duplex/properties)
That means in order to completely replace a $75,000 salary, all you have to do is acquire 11 rental properties. That’s a totally attainable goal.
Now if your salary or financial freedom number is $50,000 or $100,000 adjust accordingly.
$50,000/$3,600 = 13.8 units ( so 14 units or 7 duplex/properties)
$100,000/ $3,600= 27.7 units (so 28 units or 14 duplex/properties)
HOW:
So now you have a plan, but how do you achieve that plan. So lets say you need 10 duplexes and each duplex is 100k (25k down payment). This means you need 250k or more. This is where the creativity comes in on how to achieve your goals and plan.
- You can always go the BRRRR strategy (recycle/leverage your initial cash into more properties).
- You can flip houses. Let’s say you make $50,000 per flip. You do 1 flip a year, this allows you to buy 2 duplexes each year. So in 5 years you have met your goal.
- Get a side side hustle or part time job. (see 17 best online and part time jobs)
SAMPLE PROPERTIES ON THE MARKET
OTHER ARTICLES AND RESOURCES
How To Analyze A Rental Property
Financial Freedom Cheat Sheet (get it below)
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