Goal: Purchase 10 Rental Properties by the End of 2015


I started real estate investing in 2012. I purchased one single family rental that year. It is now 2013, and I have acquired an additional two more properties. Rental Property #1 closed on July 30, 2012 and Rental Property #3 will close on July 23, 2013. So, in a timespan of just under 1 full year (not calendar year), I will have purchased 3 rentals.

What’s the gameplan from here on out? How many properties do I need to own before I’m finished with the Accumulation Phase? When do I plan on moving into commercial real estate? What’s the cash-flow expected each month? When do I plan on achieving all this?

Lots of questions that need be answered…


Here’s my revised buying gameplan moving forward:

2012: 1 property (DONE!)
2013: 3 properties (purchased 2 so far. Looking to add one more before the end of this year.)
2014: 3 properties
2015: 3 properties

If I can accomplish the above, I will own 10 rental properties by the end of 2015.

Thought Process

Just recently, I was planning on opening a HELOC to allow me access to more funds to purchase additional properties this year. After speaking to my loan agent, I learned that the most the bank will loan me for an investment property is 60% of the market appraised value. This was surprising news, as I expected to be able to borrow up to 75%. This is a conventional mortgage through one of the big name banks.

Frankly, 60% is just way too low, and not even worth the effort. The only other option would be to do a cash-out refinance, which would allow me access to borrow up to 80%. The problem with the cash-out is that interest rates have soared since I purchased last year, so if I do a refinance, I’ll lose the awesome 3.75% rate I secured last year. Simply put, too much risk, not enough reward to justify.

This threw a major monkey wrench in my plans! Had I been able to secure a HELOC for $60,000, I probably would have been able to purchase 3 more rental properties this year! Now, since I have to save my OWN money, the most I’ll be able to pull off is just one.

The Next Two Years

Over time, the principal on my rentals will build up, and I will build equity. If appreciation keeps up, I should be able to secure a HELOC in 2014 or 2015, and even at 60%, still be able to pull out sufficient funds to help speed up the purchasing.

However, after my most recent experience, I’m not going to hold my breath and rely on a HELOC. Instead, I’m going to be more conservative and plan using a more self-reliant model. Basically, in order to pull this off (purchasing 3 properties each year), I’ll have to keep my W-2 income through 2015. To help the process, I’ll use all the accumulated cash flow from the rentals to supplement the next downpayment.

Even without using a HELOC, I’m “over leveraged”. From a risk point of view, not taking out a secondary loan might be for the better anyway. So, although it would have been nice, my plan to reach early FI can still be attained even without it. I just might have to suck it up and work until I’m 31…

Cash Flow

With 10 properties, I would expect to earn between $2500 to $3000 each month in cash flow. This is assuming an average of $250 to $300 for each property, which is pretty conservative. For instance, if rents keep skyrocketing in the Bay Area, there’s probably no reason why I won’t be able to collect an additional $100 to $200 for each local property. But we’ll see.

Commercial Real Estate

So, when do I plan on making the jump from residential to commercial property? Well, if all the above goes according to plan, I should theoretically be financially independent by the end of 2015. If that’s the case, I’ll probably quit my job and move into real estate investing full time. I’ll get my real estate license and proceed from there. I figure if I can do this gig full time, it’ll be much easier to locate good deals and build up my network. The natural progression of things would be to trade up (4 green houses for 1 red hotel). Again, we’ll see… but I do plan on eventually getting into commercial apartment buildings. Hopefully when I’m ready, the snowball will have grown to massive proportions and it’ll be possible!

Print Friendly, PDF & Email
Sharing is Caring:
0 0 vote
Article Rating
Notify of
Newest Most Voted
Inline Feedbacks
View all comments
7 years ago

FI Fighter this is a generous plan. I like it and admire you for that. The commercial estate is a lot more appealing to me than residential. I can imagine myself having a few properties used for offices, medical practices or hotels. These seem to me to be less trouble in regards to legal issues with tenants.

7 years ago

Rents will go up with pay increases. I don’t see much of that interest rate will be at 6 in 2 years and real estate will drop

All About Interest
7 years ago

You certainly have an aggressive plan. Do you plan to only buy houses in the Bay area? I wish you luck and will follow your progress, I hope to add a third property by next year myself. We shall see.

Danny C
Danny C
7 years ago

Have you ever considered paying some off to generate 100% cash flow? Fewer homes for the same amount of cash flow but less risk? I have one property now and I have been going back and forth with this issue. Buy the next one or pay the first off? Probably comes down to each person’s appetite for leverage. And if your secondary strategy is to ride the wave of increasing home values, then timing comes in to play.

The First Million is the Hardest

Sounds like a pretty aggressive plan, I like that. Good luck, I’m definitely interested to follow along with your progress!

small Business loan Mind

Hi, I am totally impressed with your plan for achieving your goal, My one of the biggest drawback is not planning properly but after seeing your progress I have to think once again about planning… I appreciate it …very useful for me….please keep us updated

6 years ago

Financially indepedence at 3k per month. Independently poor. Get that up to 22 houses and then quit your job. You need to accumulate capital. Also, after property 4, gets real hard to finance property without a job. Also, check out multi family. Duplex up to quads.


[…] too long ago, I wrote an article stating that my goal was to purchase 10 rental properties by the end of 2015. Well, just like always, time moves at a blistering pace, and lo and behold it’s now already […]


[…] set an artificial ceiling to clamp your potential? Although my own goal was to purchase 10 properties by the end of 2015, it’s not set in stone that I’ll stop at 10… If I do indeed proceed in starting a […]


[…] Purchase 10 rental properties by the end of 2015 […]

Patrick Freeze
3 years ago

Thank you for sharing your personal experience with your readers. First hand experience is often the most convincing and can really encourage those who are looking to achieve the same goals you have set out for yourself. I believe that having solid goals and a plan of action in place before even venturing into the rental property business is the best way to start out. In addition, having the expertise of a quality property management company can help those aiming for big goals such as owning multiple rental properties. I hope you reached your goal and continue to share such… Read more »

Damon Stratton
1 year ago

Thank you so much for sharing your plan with us. They often say buying the first property is the hardest. If you have enough determination and experience, and take it upon yourself to learn from others, living a financially free life as a real estate investor is possible. I’d love to add that as your portfolio grows, managing tenants becomes more difficult. That’s why it’s so important to start thinking about hiring a property management company to help. Thanks again for sharing!

Mike Barbanica
10 months ago

Thanks for this insight into your personal investment ventures. I think that investing in real estate is one of the best ways to generate *passive* income and help fund things like vacations or even retirement. But as you’ve shown in your calculations, it takes much more than one rental property to generate a generous monthly cash flow. It also takes a lot of work, which is why I always recommend hiring a property manager to help with the day-to-day operations. This is especially true for those with growing portfolios. Thanks again for sharing!

John W. Tiner
10 months ago

Thanks for sharing your insight! I think sometimes a simple, real-life example is all some people need to get started on their own journey to financial freedom. It’s true that real estate can help generate passive income. But as with most things, fear of the unknown can easily get in the way and prevent people from achieving their goals. It’s stories like this that can really help. That and an experienced property manager that has the expertise to handle all things property related!