My Plan to Acquire 10 Rental Properties by 30

Sunshine and beaches, waking up when I’d like, working when I’d like, experiencing new and excited places, being able to spend time with family whenever I’d like. These things are all part of my dream. The point in my life that I’d like to get to. 

To have the freedom to live how I’d like for the rest of my life and not squander my time succumbed to an office desk and computer, making money for someone else. So, that’s not how I’m going to live my life and I have a plan to get me to where I’d like to be.

“Failing to plan is planning to fail.” -Benjamin Franklin

My plan has me becoming financially independent in 5 years. That would put me at 30 years old and able to live out the rest of my life how I please.

I think about it a lot. I talk about it a lot and I’m sure I drive some people crazy with it a lot, but I don’t care. That’s my goal and I’m going after it.

Why 10 properties?

I see 10 as a very achievable goal. It’s not impossible, but it’s not easily obtainable either. It’s going to take some time and some serious consideration and planning on how I’m going to get there. It’s also a very manageable number of properties for myself. It’ll give me a good taste of owning real estate (not that my three houses now haven’t). Also, I know I can reach financial freedom with 10 properties.

For some, 10 properties sounds like a lot. For me, I know it’s going to be a challenge and I welcome it because I know it’s possible. Seeing that money roll into my bank account keeps pushing me too.

Could I become financially independent with less properties? Most definitely. Call me strange, but I just like the eveness to ten. I don’t think I could just have 7 properties. Then I’d be all lopsided and I’d have to round up to 10. Hopefully that makes sense or I’m going to sound really weird right now haha.

Where Am I Now?

At the moment, I already have two rentals and I’m living in my third house, which will be turned into a rental. So, let’s just say I have three rentals right now. This means I need 7 more single family properties to reach my goal.

I’d like to have 10 single family homes as income producing properties, generating $300 in cash flow per month, That sounds like a lot, doesn’t it? It can be overwhelming look at the end result and thinking, “how in the world am I ever going to make that happen?” What I like to do, in order to make the large goal more manageable is to break it down into smaller goals. The best way I know how to do that is by looking at the goal then working backwards to break it down to the point that you’re currently at, so that what I did below.

I figure that to reach my goal of 10 rentals by 30, then at the ages of 25, 26, and 27 I need to purchase at least one more house each of those years. Then at both 28 and 29 I’ll have to purchase two houses each year.

So, in five years, I have my big goal of having 10 single family rentals.

Next, I have my yearly goals. At first one house for the next three years, then two houses each year for two years.

How does that actually look then and I can I make that possible? And didn’t I skip a whole year of being 24?

Let’s look at this current year while I’m 24.

One of the biggest pieces of advice I’ve heard repeatedly when it comes to real estate investing is that you need to have cash reserves. Reserves come into play when you have unexpected and expected expenses such as roof repair/replacement, vacancy, new appliances, repairs in general, along with many other things. The reserve can help keep you in the game for the long haul.

I don’t know why it’s taken me this long to really work on it, but I’m finally working on building my reserve and that’s how I’m spending my year of being 24.

Since I know that a reserve is crucial to my success, my main goal of this year is to build it up and have $25,000 of liquid cash at the ready, should I need it. Then as I continue to increase my portfolio with more properties, I’ll continue to increase my reserve as well. This year though is all about building up a solid business foundation though. I don’t need to purchase another property this year and I don’t need to feel rushed in my plan. Once I have the reserves, then it’ll be game time and I’ll be ready to buy my next property when I’m 25.

Okay, so 24 is covered. Building reserves so I don’t catch myself in a jam and feel stressed out and worried.

Let’s get back to the fun part….buying properties!

Most likely at 25 I’m going to have to pursue another loan that requires me to live in the house for at least a year. This is no problem at all and that’s exactly what I’ve done for the properties I already have.

For the first three properties I’ve used my VA loan entitlement. On the most current property I went over my limit and exhausted that resource (for now at least). The next option I’m going to pursue is a FHA loan. An FHA loan also requires you to live in the property for a year, but you only have to put down 3.5% for the down payment.

I don’t mind living in the houses at all for the first year of owning them. I’m not in race (I mean it’s like a 5 year race, but that’s kind of slow in my mind) and I’m only trying to purchase one property a year anyways until I’m 28.

Using owner occupied loans have no doubt helped me get to where I am today and will continue to help me, but at some point I’m going to run out of those options and will have to pursue others, like regular conventional loans, portfolio loans, or maybe get creative with seller financing or something of the like. There’s tons of options available to finance real estate so I’m not too worried on that front. One day I’ll go deeper into the options that are out there.

In five years, I plan on having 10 income producing properties along with having an appropriate amount of reserves in the bank to support the business. With some hard work, dedication, and daily action, I’m confident that I’ll be able to reach my goal by the time I’m 30 and then start living my life the best way I see fit.

That’s at least my plan for now 😉