How long did it take you to live off of your properties?

[dwj469]

For the self employed I was wondering how long it took you to be self sufficient with your rental properties? What is a good goal and/or timeline to go for?

[DeeinAustin]

For rentals, I'm T minus 8-10 years.

[propertymanager]

It took me about 2 1/2 years to live off my rentals.  However, I worked 10-12 hour days, six days a week, for a solid two years (without vacations).  Additionally, I do all the management and maintenance myself, which basically doubles the amount of profit.  Finally, I already had a good understanding of how business works and didn't make any significant mistakes

I think a realistic goal is to be self-sufficient with rentals in 5 years, if you really study hard and work hard.  10 years is probably more like it for those doing it aggressively part time.

Mike

[aak5454]

10 years is you are doing it aggressively part time.

I would agree with that.  I'm nine years into it and the first 5 yr I was pretty slow and easy go about it which was good as I learned the ropes and took my time.  If I managed my own stuff, I would have a nice income, but not nearly what I earn at my day-job (which I happen to like most days)

[4R Management]

To leave your job, you really have to look at it from a monthly perspective.

Create a monthly budget. How much are you spending each month. Can you save money in certain areas?

Why do I mention this? Ever played Cashflow 101 by Robert Kiyosaki? Anyone that has, can tell you it is far easier to leave the Rat Race with one of the lower paying jobs, such as Mechanic or Janitor. The reason is, they have less debt.

In order to leave your job, you have to make your passive income cover your expenses. So focus on lowering you expenses as well as increasing your income.

So create a monthly budget for yourself. Be honest, then you will have a start at a gameplan for how long it might take you to leave your job!

[dwj469]

I could go fulltime with real state on 2000 per month rental income with doing odd jobs on the side

[propertymanager]

I could go fulltime with real state on 2000 per month rental income with doing odd jobs on the side

If you did the management and maintenance yourself, that would only be 10 houses at $100 per month cash flow!!!  You could do that in a year!

Good Luck,

Mike

[aak5454]

having been self-employed as well as a W-2 wage slave, people tend to far under estimate the value of the benefits you get with many salary jobs as well as the liquidity of having a paycheck in you checking acct every 2 weeks like clockwork.

I could go fulltime with real state on 2000 per month rental income with doing odd jobs on the side

[dwj469]

yes a paycheck is good coming in but it gives you no freedom. Ihave had a paycheck and I have been employed on my own in contruction which I still am and working toward fulltime in real estate by years end. A steady paycheck is good to know its coming. Its also good to know if you have built a good rental business that if you were to get sick and miss work or even if you wanted to take off for awhile and go on vacation knowing that when you get back home you dont have to worry about that 9-5 because each day you own your property you are becoming wealthier and wealthier.

[rookieNYC]

dwj,
  As I agree with most of your post especially building a positive cashflow income from rentals.. I tend to think that income coming in from as many different directions as possible always works best 

Giving up a 9 to 5 for some may be the best but for many people in my opinion need the push of having a boss..Not everyone is disciplined to make the leap out of the everyday grind and start hitting deals out of the park everyday..I think many dream of the day when they can but it's not all roses and champagne..Having to provide for that yearly/weekly/monthly income from your own doing is a challenge that should be taken seriously..I for one would need an extremely large cashflow portfolio to stop my *daily* career..I think we as new investors/landlords need to also spend alot of time assigning deals for gains as well as looking cashflow properties and deriving income that way..The extra income will make the yearly salary worthwhile vs depending on cashflow %100..Assigning deals in my opinion is better than being a landlord any day of the week..So I will spend an ample amount of time trying to do that and let my property manager handle the landlording issues..Just my opinion,sorry for being longwinded..Best of luck to all...Let's make lots of money in 2007 !!!!!

[propertymanager]

dwj,

I'm with you.  FREEDOM is the great thing about operating a rental property business.  I'm not talking about sitting on a yacht drinking a tall colorful drink every day.  That would get old in a hurry.  What I am talking about is being able to get up in the morning without being required to do anything in particular.  Even more, it is the freedom to be able to take a 3 day weekend every week or do whatever else you like. 

That's what my life is like.  This week was an example.  I took Monday off to go snowboarding.  Tuesday, I had to have one of my eyes zapped with a laser.  After the zapping, I worked about an hour and decided that my eye hurt, so I took the rest of the day off.  The beauty of that is that I didn't have to ask anyone, I just took the day off.   Wednesday, a relative needed my help in the morning and in the afternoon I spent a couple of hours at the builder's surplus store and bought two windows for the apartment that I am rehabbing.   Thursday, I had to have my eye zapped with that laser again, so I took the entire day off.  Friday, my eye was still irritated, so I took most of the day off again, although I did put an offer in on a SFH and did some preliminary work on a 6 unit building I'm wanting to buy.  Today, Saturday, I got back to normal and finally got back to work on my rehab.  I worked from 10-2.

That was my week.  I LOVE being self-employed!  To me, the freedom is EVERYTHING!

As for next week, Monday is more snowboarding!

Mike

[ElephantNest]

Just a little humor, but seriously, I haven't gotten a paycheck in over 15 years.  Woudn't change a thing.

[dwj469]

Thats great prop manager Mike and  elephantnest I cant wait to get there myself. Good lck with your continued investing.
Don

[ElephantNest]

Thanks, but I need to be more specific. I've owned a landscape company for years, only recently have I begun to invest in real estate. December 12th of last year, to be exact. I own one rehabbed rental down the street from me, and I'm in partnership in two other SFH's in New Orleans....so, been busy for a little over 2 months.

But I just wanted to clarify that I was not one that has made enough in REI to quit my day job just yet. I'm still digging holes. lol

[yrush2000]

I have been investing for over 5yrs and over the last 3yrs have had an income in excess of $100K but still would not leave my job which occuppies about 55-60hrs a week for me.  I love the extra income. I look at real estate as the escape to an earlier retirement since I am only 33 and by 40 I want to know I will not have any worries as long as i play the game right and save, save, save.  I invest the max I can in 401K at work and Roth IRA, I have annunities and stocks as well.  I believe in keeping a very diverse portofolio in all investments as its rare all of it will go belly up at once.  But I like the some of the things my employer offers, like solid health insurance. I like knowing I can quailfiy for a loan as a stated wage earner, or yes using my companies that are over 5yrs old.  Many people forget, if you need a loan, you need 2yrs of continous employement in same field generally and if your company is not 2yrs old forget about using it for conventional financing.

Now the other question is how much do you want to earn?  Maybe you make $100K a yr on your job, but is that enough. Does your wife work and earn 50K and well if you stop shes still working so your not creating the total freedom you want for the family, so that means you need to earn 150K in REI.  But also over the yrs you have extra spendable income from REI so now you need to add that to the pot, so maybe you need 200K a yr and yes you will walk away like many people would.  But also your market and where you live has a major factor in that.   Where I live, you need to earn $150K to live comfortable in my opinion which many people do not.

As 1 poster said, earning $2000 a month or 24K a yr is enough. BUt is that enough to just pay the bills, again a JOB (Just over Broke).  Who wants to just get by,. I want to put money in the bank, save 50% of my income, create a pot of gold, save for the kids college fund, take a nice trip when I want, gamble 100K in Las Vegas, etc..  We all have a different figure since we have different lifestyles and goals.