My Long Term Goal for the Next 5 Years

I’ve been talking about my short term goal a lot:

buying a multi family home, living in one of the sections, renting out the other sections and living rent free.

But what about my long term goal?

That’s a good question. My dream is to be a full time investor and entrepreneur.

I love my current W2 job(s). I love interactive design. But I want to be an entrepreneur…and I’m not talking about being a freelancer. There’s a big difference between freelancers and entrepreneurs.

I’ve been immersing myself in my education: books, blogs, podcasts, forums (specifically from BiggerPockets), and talking to people who are actually doing it. Now that’s an education.

I’ve learned that real estate consists of:
1. Your niche
2. Your strategy

A niche could be anything like:

  • single family homes
  • multi family homes
  • commercial real estate
  • large apartments
  • small apartments
  • REITs (which is basically like a mutual fund for a giant piece of real estate

There are many, many more niches—the list goes on.

Next is your strategy:

  • Buy and hold
  • Flipping
  • Wholesaling

So here’s my long term goal for the next five years: (and of course, goals must adapt over time)

My niche: multi family homes
My strategy: buy and hold (that just means I’ll hold onto it long-term and collect the monthly cashflow)

I want to do this until I am making $4,000 per month in passive income by the time I am 30 years old (I’m currently 25).

During this process I will build my network organically (you can read about that in an earlier post).

I will then launch a fix and flip company. I will then have two niches and two corresponding strategies:

Niche 1: multi family homes
Strategy 1: buy and hold

Niche 2: single family homes
Strategy 2: fix and flip

Another option is to wholesale on the side. Theoretically, this can begin immediately. I will write another post about wholesaling soon.


Filed under Business, Entrepreneurship, FHA Loan, Investing, Real Estate

4 Responses to My Long Term Goal for the Next 5 Years

  1. Brother in law

    When you say “collect” the monthly cash flow, do you really mean “reinvest” the monthly cash flow? 🙂

  2. Hey man, you have some good ideas here. It is how I started with the duplex in Fayetteville, and it has enabled me to be more flexible financially. (like quitting my full-time job and going back to school again)

    Be sure to note that anything paid to you by tenants is considered taxable income and must be claimed on your return. So plan ahead and sock away some of that money (maybe 20%, possibly more since you’re dealing with a higher rent bracket than I am). Then you won’t be caught off guard on April 15th.

    Fortunately, you can claim part of your mortgage interest as a tax deduction, which is very helpful. But, since only a portion of said property can be considered to be your primary residence, you can only deduct that same percentage of the interest. (no deductions on investment property) Also, FHA loans will initially work on rentals that you occupy, but if you move out of the property at some point, you will probably need to refinance with a conventional loan.

  3. Yes sir, I mean reinvest.

    I’d like to eventually be a full time entrepreneur (maybe that will be much further down the read than five years from now) I guess I’ll just have to see. Until then, interactive design takes care of our needs.

    At first I was thinking I’d reinvest the cash flow until I reach a certain amount, then I could afford to do it full time. However, that would change a lot as far as financing.

    I just read this the other day in an ebook:

    “One of the perks of investing while working full time is the steady income stream to fund and support your real estate investments. Don’t underestimate the importance of this!”

    I won’t want to eliminate that stream of income too soon!

    The fix and flip idea sounds like fun…but, in reality, I know nothing about that and I’m far from being a handyman :p maybe it’s just a nice dream, haha. I know that’s a totally different ballgame and it’s no longer about building income generating assets.

  4. Austin,

    You always ‘gotta pay the tax man, am I right?

    Seriously though, that’s good advice. Thanks!

    I was actually thinking about what I would do as far as moving out of the house eventually and turning it into a pure investment property.

    I was reading about a 203K loan the other day. Evidently, it’s similar to the FHA loan (you only need 3.5% down) but it’s intended for rehabs. The cool thing is, you can bundle the cost of repairs into the entire mortgage—you just need to know a thing or two about fixer uppers.

    Maybe that would be phase 2? But like you said, I might have to refinance the first home since I would not be occupying it anymore…

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