On track to retire by age 27! Rachel from KY

[Rachel888]

Congrats on your successes so far.

With this particular potential hurdle - I too had a good paying 9-5 I knew would be hard to walk away from.
Here's how I went about it.

I cornered myself way ahead of time. I made it so that when the time came, I would have NO wiggle room to chicken out.

About 10 months before my intended exit (December, 2013), I met with my regional director and let them know my plans.
I told them, in December, I would be moving on to focus solely on my business. That I was giving ample notice so they could start scouting for my replacement in good time.

About 4 months later, I signed a permission allowing them to put my position up as "available," even though I'd still be there another 6 months.

Two weeks before my exit, I put in the traditional 2-week notice. My replacement was already standing by.
I and the company parted ways with mutual warm and fuzzy goodbyes, and I haven't looked back since. I was 27.

I wish you strength, when that time comes.

That's great advice, thank you! My fiance and I promised each other our deadline was May 2020 and we have vowed to stick to it no matter what, so hopefully when it comes down to it I can follow your process and arrange something similar.

 

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[eliquid]

BTW, Im the one that does the Louisville meetup

MEETUPS - Kentucky/Louisville Meet Up Interest

Date is still up in the air in May.

Would love to talk to you about your book. I'm writing one and would like to pick your brain on how you got your reviews, etc.

 

[Rachel888]

BTW, Im the one that does the Louisville meetup

MEETUPS - Kentucky/Louisville Meet Up Interest

Date is still up in the air in May.

Would love to talk to you about your book. I'm writing one and would like to pick your brain on how you got your reviews, etc.

Nice - keep me posted! If you have a chat group for the fellow Kentuckians I'd love to be a part of it.

Happy to help answer any questions. My biggest piece of advice is to read "Published" by Chandler Bolt. I learned everything I needed to know about publishing a book from him. He has a whole launch process that he outlines including how to get sales & reviews. But mainly all my promotion was done on social media on Facebook, Instagram, and a couple close-knit Facebook groups. Lots of my "online friends" supported me and gave me reviews. Let me know what other questions you have about it!

 

[eliquid]

Nice - keep me posted! If you have a chat group for the fellow Kentuckians I'd love to be a part of it.

Happy to help answer any questions. My biggest piece of advice is to read "Published" by Chandler Bolt. I learned everything I needed to know about publishing a book from him. He has a whole launch process that he outlines including how to get sales & reviews. But mainly all my promotion was done on social media on Facebook, Instagram, and a couple close-knit Facebook groups. Lots of my "online friends" supported me and gave me reviews. Let me know what other questions you have about it!

Ah nice.

Yes, I know Chandler. Im on his email list and get his stuff routinely.

I'll check out the Published book ( I havent bought anything from him yet ).

Thanks!

 

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[Bhanu]

Congratulations Rachel888....great intro .Welcome to the Forum.

 

[Kak]

Congrats on your early success and engagement keep it coming! Fantastic first post.

My hunch is you will probably keep working deals long after you turn 27, by choice. “By choice” is such a great phrase.

 

[Rachel888]

Congrats on your early success and engagement keep it coming! Fantastic first post.

My hunch is you will probably keep working deals long after you turn 27, by choice. “By choice” is such a great phrase.

Thank you! And I appreciate the Rep transfer... I just had to do a quick search to see what "rep bank" meant and was for. Thank you for the kudos!

 

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[biophase]

I probably wouldn’t say that you are retiring. It’s more like escaping the 9-5 and working for yourselves by 27.

The one calculation I would ask you to make is, how much can you save per year by staying at your 9-to-5 job? And how much faster and how many more properties can you purchase by staying at your 9-to-5 job?

Because once you quit, your cash flow drops to $40,000-50,000 a year. And you will find it hard to keep growing and investing because now you will have to live on the $40,000 a year. And without significant additional cash flow coming in, how are you going to be able to invest in more real estate or new business?

You don’t want to be 30 years old and have only added one more property to your portfolio because you were cash poor. So maybe work an extra 1-2 years and add a bunch more investments in before leaving your job. My gut is saying that it feels too early to me.

Now is probably the time that you should be accumulating investments so that when you really “retire” at age 40 you will have $10 million in real estate instead of $1 million.

 

[Shepherd]

Thank you! And I appreciate the Rep transfer... I just had to do a quick search to see what "rep bank" meant and was for. Thank you for the kudos!

Great intro and nice job being focused at a young age. You guys are killing it. I'm right across the bridge in southern Indiana but work in the east end. Good to know there are deals to be had in the area. I plan on getting back into the rentals in 2019-2020.

 

[Rachel888]

I probably wouldn’t say that you are retiring. It’s more like escaping the 9-5 and working for yourselves by 27.

The one calculation I would ask you to make is, how much can you save per year by staying at your 9-to-5 job? And how much faster and how many more properties can you purchase by staying at your 9-to-5 job?

Because once you quit, your cash flow drops to $40,000-50,000 a year. And you will find it hard to keep growing and investing because now you will have to live on the $40,000 a year. And without significant additional cash flow coming in, how are you going to be able to invest in more real estate or new business?

You don’t want to be 30 years old and have only added one more property to your portfolio because you were cash poor. So maybe work an extra 1-2 years and add a bunch more investments in before leaving your job. My gut is saying that it feels too early to me.

Now is probably the time that you should be accumulating investments so that when you really “retire” at age 40 you will have $10 million in real estate instead of $1 million.

I'll be retired for sure, because of that passive income! One of the goals I stated was to increase our passive income to $10k/mo from real estate alone, not including our other passive income streams, within the next 2 years. We have a solid plan to achieve this and are on track, fortunately! So by 2020 when we "retire" we will be making about $140k in passive income, not 40-50k.

By then we won't need to continue growing our portfolio, and we certainly won't be cash poor. In fact we'll still be able to save at an aggressive rate. We already have over $1mil in real estate and by the time we "really retire" (me at age 27) we will have about $3mil... not that the value of the real estate matters, because it's all about passive income. C'mon, Fastlaner, you should know that!

 

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[LeoistheSun]

Welcome - awesome intro.



I'm interested in this. 25% ROI/IRR is outstanding.

Is this the same as CAP rate?

 

[Rachel888]

Is this the same as CAP rate?

No, CAP is the net operating income divided by the sales price of the house... ROI is the net operating income divided by the amount invested (basically down payment.)

Our cap rate for our duplex is $7,000/$93,000 = 7.5%. Our ROI is $7,000/$34,000 = 21%.

Our cap rate for our 11-unit is $32k/$430k = 7.5%. Our ROI is $32k/$110k = 29%.

 

[LeoistheSun]

No, CAP is the net operating income divided by the sales price of the house... ROI is the net operating income divided by the amount invested (basically down payment.)

Our cap rate for our duplex is $7,000/$93,000 = 7.5%. Our ROI is $7,000/$34,000 = 21%.

Our cap rate for our 11-unit is $32k/$430k = 7.5%. Our ROI is $32k/$110k = 29%.

Thank you for explaining this! +100$ rep!

How do you manage repairs/managing (if something breaks- do you fix) the units currently?

 

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[Rachel888]

Thank you for explaining this! +100$ rep!

How do you manage repairs/managing (if something breaks- do you fix) the units currently?

Thanks, appreciate it! We don't have a property manager so right now we are doing everything ourselves. We can handle the easier repairs on our own, but for anything electrical/hvac/complicated, we'll hire a contractor.

 

[LeoistheSun]

Thanks, appreciate it! We don't have a property manager so right now we are doing everything ourselves. We can handle the easier repairs on our own, but for anything electrical/hvac/complicated, we'll hire a contractor.

Hypothetically, if you didn't live anywhere near the properties, how would you manage them?

 

[Rachel888]

Hypothetically, if you didn't live anywhere near the properties, how would you manage them?

Our plan is to hire a property management company before we move out West.

 

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[jcvlds]

Nice thread! Those numbers look very nice. Are they accounting for Maintenance & Repairs as well as CAPEX? Not having reserves usually kills the returns for many owners not saving for these


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[Rachel888]

Nice thread! Those numbers look very nice. Are they accounting for Maintenance & Repairs as well as CAPEX? Not having reserves usually kills the returns for many owners not saving for these


Sent from my iPhone using Tapatalk

Yep! For our 11-unit for example, we account for 8% vacancy, $300/mo capex, $50/mo maintenance, utilities /pest control / yardwork >$1,000. Great reminder... leaving that stuff out can kill a deal! We try to be super conservative in our estimates... so far our *actual* numbers have always been favorable to our estimates.

 

[Merging Left]

Do you factor in a management fee of 8-10% of monthly gross rent? Since your eventual plan is to move out west and hire a company, be sure you're including that in your numbers. It sounds like you have plenty of margin for that, though!

Where is "out west"? California?

 

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[Kennypaul]

Hey guys! First time poster here, but what an absolute dream to have found a forum with like-minded people. The only person in the world I have met who is as ambitious as me and shares the same goals and values as I do is my fiance, Andrew... so at least I am lucky in that regard! But a whole community of you... it's like Christmas morning!

So a little about me: I'm 25, I'm a finance analyst (sitting at my cubicle right now, not being the best employee...), I live in Kentucky with my fiance (30 yrs old) and our dog. Andrew and I had an incredible year last year. Here are some of the things we accomplished in 2017:

• We bought 2 rental properties, which bring in $3k/mo cash flow combined, 25% rate of return
• We started a POD T-Shirt business, earns about $1k/mo
• I got a promotion and a $10k raise
• I wrote and published my first ebook, Money Honey, earns about $500/mo
• I lost 20 lbs, Andrew lost 25 lbs... we are in the best shape of our lives!
• I won a $15k Sweepstakes the same weekend Andrew proposed... absolutely nuts
• We traveled to Colorado, NY, & Greece

The point here is that we went from $0 in passive income to $4,500/mo in passive income... all within a year! To top it off, we just closed on our 4th rental property 2 weeks ago which will bring in another $2k/mo. I feel like I can share these details / accomplishments with you all and it won't come off as braggy (because it sure feels like it and I don't mean to) but rather excited at how impactful the Millionaire Fastlane mindset is.

We are thrilled with our momentum and can't wait to retire early. So now for our goals...

• Retire by May 2020 (I will be 27, Andrew will be 32) and move out West
• Grow passive income to $10k/month AT LEAST with real estate
• Hire property management company for our rentals
• what else? (would love some suggestions)

I'm excited to be here, interact with you all, and hopefully make some new friends. Would love to talk to other real estate investors, authors, or POD business owners! You guys are awesome!

Are there any other youngins in here like Andrew and me? I would especially love to hear from those of you who ALREADY retired and that had to walk away from extremely lucrative full-time jobs. My worry is that our full-time/actively earned income is so high that we won't want to quit, even though we can!

Rachel

Awesome intro!.It's good to have you here.Welcome to the forum Rachel.

 

[Real Deal Denver]

Thank you! I appreciate all the kind words and feedback - let me know what you think of the book!

Most of our wealth is tied up in our real estate... the only contributions we make to the stock market are within our 401k to get our employer match. We find we can get a much higher ROI in real estate!

I'm so glad you said that.

I've read dozens of financial books myself - I'm hooked on them, like you are.

And I read yours too!

Loved it all, except that you kind of skirt the issue of leverage. That is one of the two big advantages of real estate versus stocks. The other one being that houses don't lie to you like CEOs do. Combine those, and it's the rocket to wealth, as so many already know.

I wish you would have included a chapter on real estate in your book expounding on that - but don't worry - I will in MINE! LOL.

Once again - loved your book. You are truly blessed in life in many ways. So nice to see someone succeed that so appreciates it!

 

[cwalto12]

I'm so glad you said that.

I've read dozens of financial books myself - I'm hooked on them, like you are.

And I read yours too!

Loved it all, except that you kind of skirt the issue of leverage. That is one of the two big advantages of real estate versus stocks. The other one being that houses don't lie to you like CEOs do. Combine those, and it's the rocket to wealth, as so many already know.

I wish you would have included a chapter on real estate in your book expounding on that - but don't worry - I will in MINE! LOL.

Once again - loved your book. You are truly blessed in life in many ways. So nice to see someone succeed that so appreciates it!

Can't wait to read BOTH of your books haha. Rachel's is in my queue at the moment. Finishing up Unscripted .

 

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[EvanOkanagan]

We already have over $1mil in real estate and by the time we "really retire" (me at age 27) we will have about $3mil... not that the value of the real estate matters, because it's all about passive income. C'mon, Fastlaner, you should know that!

Welcome to the forum! And congrats on your success so far.

If it's all about passive income, then the value of the Real Estate should definitely matter! The value of your Real Estate is the difference between having to save for the next down payment (slow game) vs. using the equity in your properties to acquire more units faster.

 

[Rachel888]

Do you factor in a management fee of 8-10% of monthly gross rent? Since your eventual plan is to move out west and hire a company, be sure you're including that in your numbers. It sounds like you have plenty of margin for that, though!

Where is "out west"? California?

We always run two scenarios when we are looking at acquiring another property... once where we manage them ourselves (these are the #s I have been quoting) and one where we hire a property management. Obviously the #s aren't quite as good but returns are still around 20% with the property management company.

And yes - we just got back from vacation in San Diego and we have settled on that as our dream place of living! Cost of living is a bit different though Good thing we have already factored that in to our retirement plan!

 

[Rachel888]

I'm so glad you said that.

I've read dozens of financial books myself - I'm hooked on them, like you are.

And I read yours too!

Loved it all, except that you kind of skirt the issue of leverage. That is one of the two big advantages of real estate versus stocks. The other one being that houses don't lie to you like CEOs do. Combine those, and it's the rocket to wealth, as so many already know.

I wish you would have included a chapter on real estate in your book expounding on that - but don't worry - I will in MINE! LOL.

Once again - loved your book. You are truly blessed in life in many ways. So nice to see someone succeed that so appreciates it!

That's awesome, thank you so much for reading! You are exactly right - I purposefully didn't go into detail on real estate investing in my book because I can write an entire book just on that entirely... which will be my sequel! Thanks again for the compliment and I'm so glad you liked Money Honey.

 

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[Rachel888]

Can't wait to read BOTH of your books haha. Rachel's is in my queue at the moment. Finishing up Unscripted .

That's awesome, thanks! Let me know what you think of it.

 

[biophase]

I'll be retired for sure, because of that passive income! One of the goals I stated was to increase our passive income to $10k/mo from real estate alone, not including our other passive income streams, within the next 2 years. We have a solid plan to achieve this and are on track, fortunately! So by 2020 when we "retire" we will be making about $140k in passive income, not 40-50k.

By then we won't need to continue growing our portfolio, and we certainly won't be cash poor. In fact we'll still be able to save at an aggressive rate. We already have over $1mil in real estate and by the time we "really retire" (me at age 27) we will have about $3mil... not that the value of the real estate matters, because it's all about passive income. C'mon, Fastlaner, you should know that!

I meant $1 million in equity, not overall market value. Unless you meant you have over $1m equity which is awesome.

And yes cash flow is great, but the REI value will matter to you later on. I’m sure you will eventually balance it out with higher value lower ROI properties when you move out west.

 

[AgainstAllOdds]

I'll be retired for sure, because of that passive income! One of the goals I stated was to increase our passive income to $10k/mo from real estate alone, not including our other passive income streams, within the next 2 years. We have a solid plan to achieve this and are on track, fortunately! So by 2020 when we "retire" we will be making about $140k in passive income, not 40-50k.

By then we won't need to continue growing our portfolio, and we certainly won't be cash poor. In fact we'll still be able to save at an aggressive rate. We already have over $1mil in real estate and by the time we "really retire" (me at age 27) we will have about $3mil... not that the value of the real estate matters, because it's all about passive income. C'mon, Fastlaner, you should know that!

To add onto @biophase 's point: Make sure to build a large enough safety net before making the plunge.

I was your age last year on track to do a quarter million profit, could've done $100k passive if I so chose. One black swan came and knocked me out.

I'm back home now building the foundation stronger and bigger before even thinking about leaving again.

Don't "retire" too early. Retire when you're 99% sure that you can.

 

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[garyfritz]

I was your age last year on track to do a quarter million profit, could've done $100k passive if I so chose. One black swan came and knocked me out.

This. 20 years ago I started doing financial trading. Within a few years I was successful enough that I was managing $10M in client money, returning 35-40%/yr with modest drawdown. I was on track to clear at least $500k in management fees the next year, with no limit in sight.

Then 9/11 happened. The towers came down, everybody freaked, the market dynamics totally changed, and my trading models and approach never worked again. I'm still driving the fancy new car I bought that year before everything fell apart.

 

[IGP]

What's your contingency plan?

What happens if the economy dumps the bed, like many expect it to do, and your properties are worth a lot less than what you think they will be? Are you going to be cash strapped?

There is definitely a thing as growing too fast.

Just some things to keep in mind. I'm sure you've already considered it.