How Much Cash Do I Need To Buy 75 Houses?
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How Much Cash Do I Need To Buy 75 Houses
Joe: Hey, this is Joe. This message is from, this question is from Steve and Karen from Canada. “We’re Canadians looking to build a portfolio of passive income using single family and small multi family. Our goal is seventy-five doors, $300 a month net to us using 50% leverage. How much money is required on our side of the investing to achieve these goals?”
Joe: If you’re using 50% leverage, that typically means that you’re putting 50% down. So you’re going to need all that cash to do that. Make sure you know what you’re doing. I think if you listen to these videos that I’m sending out, you’ll probably understand by now that you shouldn’t be using your own cash to do this. If you’re using private money you better know what you’re doing so you don’t screw it up and lose their money for them because they’re going to be unhappy with you and they potentially can start reporting you to, to different authorities. So find a way to buy these properties.
Joe: And they’re, you know, if you use the For Rent technique, the Automarketer, it’s going to bring in so many leads you’re going to turn in to some of these people where you can do subject to’s. And we usually don’t take a subject to deal unless we’re making $300 a month positive cash flow on a property like that. Or, maybe you go and work in rural areas. One of the techniques that we’ve been using in rural areas where we buy these little $50,000 properties but we would buy them with, on a contract, or maybe we just get the deed and we put a mortgage on the property and we make payments on that property with every dollar that we’re giving them towards principal so that when you have a $50,000 property, you’re paying $300 a month it ends up paying it off in seven or eight years, and you own that thing free and clear and if it’s got a $600, $700, $800 a month income on that property, which a lot of these do, after a couple hundred dollars, you’re making $500 a month free and clear within seven years that will last you the rest of your life as the values of the property go up.
Joe: And that’s a beautiful way to do something like this and you can build a portfolio in these small rural areas or you know, lower income, you know, urban areas as well, you know, on properties that are under $80,000, $70,000, $80,000. And a lot of those places you can find properties that are substantially under market value using the Automarketer, using the absentee owners, using expireds to be able to get that to happen. So that’s my suggestion if you’re trying to build seventy-five doors. That shouldn’t take you more than a few years using these techniques. My guess is, within two or three years you can make that happen. The likelihood that you can put together a portfolio of twenty properties a year is pretty realistic if you use these techniques.
Joe: Now, during that time you have to make enough money to live, so you might also want to be flipping some properties as well. So you want to figure out, well, how much money do I need to live on? Can I live on $50,000, can I replace the income on my current job and start living on $50,000? Do I need $75,000? Do I need $100,000, do I need $200,000? You know, where do you need to be and what is it going to take to replace that? And once you get to that point then it makes sense to build your portfolio. I always makes sense to do this stuff full time. And by full time, I’m talking twenty hours a week.
Joe: You want a business that’s going to be twenty hours a week that’s going to replace your current income that costs forty hours a week to do it and hopefully make more money doing this business than you are in your current job. And if you’ll do that, that’s going to make it a lot easier.
Joe: Now, listen to some of the other videos that I’ve got on raising private money and that type of thing. It’ll help you understand it better. I’ve got a book on Amazon about how to find private money, it’s $3.00. It’s really a quick read and easy to understand and I think it’ll give you a little more insight on these things that I’m talking about here and help you get going.
Joe: I’d also suggest that you use the Automarketer to find these properties. I know it’s counter intuitive, but you’re going to have a lot more properties to do it. You’re going to be able make flip properties while you’re doing it and you’re going to be able to engineer these deals so you’re doing multiple deals all the time, and be able to outsource some of this stuff so you can have help doing it without having to share the profits at the end. You know, if you, if you bring in private money, you’re going to have to share the profits and you don’t need to, you know, once you learn these things.
Joe: One of the things I talk about when people come into my mentor program, I’m happy to partner with people that are my students that have gone through this process and I see that they understand what I’m doing, what I’m looking for and I can put cash into deals. I a lot of times have resources that they don’t have and I’m willing to do that. What I find is that most of the time they just go off and do their own thing and they don’t need the money anymore because I taught them how to do it without the money. So I don’t have them, you know, doing those types of deals. And then, so, so I work with a few people that still it makes sense, and we have deals that we can still do with the cash and I like doing that as well, because I don’t like to do as much of the leg work. So I have them do the leg work and help them find the properties and we split the profits and I bring in the money.
Joe: Anyway, hope that explains it. Good luck and I’ll talk to you soon.