How to Retire in Three Years Through Real Estate Investing
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How to Retire in Three Years Through Real Estate Investing


Preposterous. Farcical. Absurd. That’s probably the response most people
have when they read the title to this video. Retire in three years? Sure, maybe if the
person was 99% there, but there’s no way an average person can retire in just three years using real estate, is there? well that’s the question I was asked on
last week’s BiggerPockets webinar talking about real estate investing and
I took on the challenge and here’s the gist of how I answered and by the way
did you know that every week we have a free online webinar to teach various
aspects of real estate? We talked about how to invest in real
estate while working a full-time job, how to invest using no or low money down, how to buy fixer-upper rental properties and so much more. You can sign up for the next one a
BiggerPockets.com/webinar – Right so, with that let’s get on with the
discussion because you’ve got three years until retirement and time is
ticking. Here we go, first of all let’s make a few
assumptions because I don’t really know anything about you. So i’m going to assume that you don’t
need six figures to retire. Now i’m not talking about buying a yacht and
drinking Cristal and swimming in cash like Uncle Scrooge, right. I’m talking about just retirement – being
able to pay your bills with passive income. So pretend assumption let’s
use like 54 grand a year 4,500 bucks a month. Now you might need more than that, that’s ok, keep listening you can adjust these numbers later on
your own. So ,we have this concrete goal of making $4500 in cash flow every month from real estate within three years. I’m a strong believer in taking these
lofty goals and putting them into something more tangible like $4500 a
month in cash flow. I like that, so now that’s something we
can go after specifically and now that we have that clarity defined $4500 a
month within three years. Let’s break it down even further and
what does that even mean? Well for me, I like to look at that number and ask the
question how many rental units like, houses or apartments, do I need in order to hit that number. Of
course that’s going to depend a lot on the deal. A lot of people buy real estate
and lose money every month and we don’t want that we want to buy real estate
that is cash flow positive that means after the income has been received all
the income and all of the expenses have been paid and I mean all of them like
vacancy repairs capex management utilities the mortgage and everything
else we should have a positive number. Now how positive? Well for me, I like to see between a
hundred and two hundred dollars a month per month per unit. It’s just a target that I aim for and I’ve been able to get most of my
career. So let’s just pick a number of smack dab in the middle that $150 a month. So now to all the math geniuses out
there let me ask you a question. If you needed $4500 per month in cash
flow and each unit gives you a hundred fifty per month in cash flow, how many units do you need? Anyone? Anyone?
Bueller, Bueller? Right, 30 units! So now we’ve got this big crazy
goal of retiring in three years we’ve condensed it down to just needing 30
units that make a hundred fifty bucks a month in cash flow. So now we’re getting somewhere but we’re not quite done yet. Now we need to make a plan to get those
30 units. So how do you buy 30 units over the next three years? Well of course you can shop around and
find a 30 unit apartment complex and BAM! You’re done. But that would make for a slightly
boring video so let’s get a little more creative. You can also buy 30
single-family houses but that’s a lot of work for three years. So let’s work on a
plan that meets somewhere in the middle. Small multifamily properties like duplexes
and triplexes or fourplexes. Additionally, I want to break up our goal
of 30 units into three mini goals. One for each year. We can say that we wanted
10 units per year for 33 years but I don’t think it’s realistic i mean people
tend to start a little slower and they speed up over time so I want our goal
to reflect that reality, so rather than 10 units per year for the first three
years, let’s set a goal of five the first year
10 the second year and 15 the third year. So now we’ve taken that
big lofty goal of retiring three years and to be on track to hit that we’ve got
to buy just five units this year. Think you can manage that? I don’t see
why not. But plans are useless without action, so let’s get to the final step of
this is to take action. Take the action required to meet your goal this year. So what does it take to buy five units
over the next 12 months? Well it’s going to take some action. For example, maybe
we’ll connect with the local real estate agent and you’ll start looking now for
small multifamily properties and maybe in a few months you’ll find a duplex
that will cash flow the numbers you need and then a few months after that go by a
triplex and boom you hit your one year goal. Of course as we talked about
earlier not just any deals going to work. You’re
gonna have to kiss a lot of frogs before you find your prince in other words you will likely
need to analyze dozens or even hundreds of deals before buying the right one
that fits with your plan. To help with that of course, I’d encourage you to
check out the BiggerPockets property analysis software which you can find at
BiggerPockets.com/Analysis – you can analyze an entire property in under five
minutes and estimate important metrics like cash flow and cash on cash return
and lots of other goodies. Now, for those wondering how you’re going to pay for all this I would encourage you with this. If you wanted it bad enough you’ll make
it happen. i bought my first 30 units using almost
entirely other people’s money. So maybe you’ll partner up with someone like I have
or maybe you’ll house hack like I have or maybe you’ll use a HELOC like I have
or seller financing or lease option or one of the many other creative
strategies. Of course, if you want to know more about that be sure to check out my first
full-length book “The Book on Investing in Real Estate with No and Low Money
Down”. Now the point is real estate investing is possible no matter how rich
or poor you think you are you can achieve your financial goals no matter
how lofty and they might seem. But it’s not going to happen by itself. As
personal development author, Jim Rhodes says, “Life doesn’t get better by chance, it
gets better by change.” So get out there and break down your big
goals and take the action steps needed to accomplish it. For BiggerPockets.com my name is Brandon, signing off.

41 Comments

  • A. Guyton

    My first deal was for 5 units. I did a blanket mortgage. Which means for anyone who doesn’t know it’s when you buy a batch of properties at once and you only have to pay 1 mortgage because all the properties are combined. That was June of 2018. Working on buying a 5 unit small apartment building at the moment. 30 units are my goal, so this video was definitely helpful and showed me is much attainable 💪🏾

  • Skiidzman

    Am i crazy? I keep doing the math on properties earning me around $700/month in cash flow, single family homes. That's not being over-zealous either. Property taxes, HoA, Property Mgt, Insurance, Mortage + Interest, Setting aside for Cap-ex/repairs, the whole pie. I take it those just must be solid ass deals?

  • Matt G

    I have the money to put down and credit to buy a few rentals. Some I’ve been looking at are 3-4 units for only 80k. But I’m just afraid (I sound like a baby I know) of what can go wrong since I know little about being a landlord. Also I don’t know if any ways to protect myself.

  • Yusuf Seedat

    For this to work. You need a really good relationship with your Banker. You also need to be white. Especially where I come from. Haha

  • We Love Libraries

    Inherit a shitload of real estate is the best you can do to get there in 3 years. All the great deals in real estate are taken by the insiders the county clerks, county assessors & real estate agents – if it makes it to the street it ain’t that good a deal

  • Exhaled The Light

    Really unsure on how to build your unit counts. I have the opportunity to buy a 4 unit duplex. okay now i'm invested in that. if i do not have the cash to make a downpayment on a second rental property, how am i supposed to buy another unit? (new to this)

  • The Modern FLAT

    I love how you break everything down into very size-able chunks! I try to do that as well in all my real estate videos as well! Good stuff Brandon & BP!

  • Threelly AI

    http://www.threelly.com/ Threelly uses state of the art A.I. to analyze videos for key insights: topics, scenes, people, sentiments, and much more.

  • darwandoo

    Just 30 units? That's it? Does that include 30 reliable tenants? Let's hope we have the backup cash in case anything goes wrong. Lol
    Unfortunately I'm in Canada and we don't have properties ranging from 40000 to 150000. You'd be lucky to get in at 500000.
    30 units or equivalent times 500,000$ yea that's realistic. Come on Brandon, this video needs more depth and must include a more realistic price point.
    My portfolio is at two with decent cash flow but I'm tapped with financing and my consumer credit card debt is only 600$. I'm having a hard time finding financing for my third.

  • The Modern FLAT

    I’m more curious on where you are seeing these investments that are bring in cash flow of $150/month haha. Living in CA, people are happy to break even!

  • ComedyThatSucks

    My life has for ever been changed as of 2 weeks ago since discovering how real estate investing actually works.

  • Jean Pierre

    But why you still selling books or why you not retired yet though people lie this day just to make money.

  • kenneth Redman

    I have bad credit, low income, and don't know how to determine the possible cash flow of a property.
    What do I need to do to get my first 5 units in year 1?

  • Jewels Jewels

    thank you Brandon for breaking this process down into bite-size pieces that I am able to digest and understand. starting off slowly is a good idea for me.
    Five properties in a year yeah, I think I can do it I know I could do it.

  • TheBloodVodka

    I worked out with my salary and spending habits (which are pretty disciplined) that I could do this in 6 years but I still wouldn't have an income of 54k. More like 25 to 30K. I still wouldn't get enough units in time. Am I doing the math wrong?

  • hardset2000

    You make no mention about the occasional major expenses like new roofs, new heat pumps, new flooring, new appliances, new windows, etc. etc. etc. etc. Those cost will really skew your estimation of positive cash flows. In short your full of it!!!

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