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Goal: Purchase 10 Rental Properties by the End of 2015

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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!

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{ 18 comments… add one }
  • MartinNo Gravatar July 18, 2013, 8:19 pm

    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.

    • FI FighterNo Gravatar July 21, 2013, 10:41 pm


      Thanks! Yeah, commercial buildings definitely have their appeal. They are perfect for people who don’t want to deal with the traditional type of tenant. I’ve also thought about public storage, since that’s somewhat low maintenance.

      Take care!

  • MarioNo Gravatar July 18, 2013, 9:12 pm

    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

    • FI FighterNo Gravatar July 21, 2013, 10:42 pm


      Yeah, it looks like interest rates are steadily rising which might finally slow down real estate prices. I would like to get a few more deals locked up before rates get to 6%.


  • All About InterestNo Gravatar July 19, 2013, 8:04 am

    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.

    • FI FighterNo Gravatar July 21, 2013, 10:45 pm


      Actually, the current property I’m buying is in Chicago. After I closed Rental Property #2, I kind of realized the Bay Area would be off the radar until prices plummeted again. Just too pricey here and properties no longer cash flow.

      You’ve got some nice looking properties there. It’s good to see that they are all cash flowing now. Best wishes as you look for #3!


  • Danny CNo Gravatar July 19, 2013, 8:35 am

    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.

    • FI FighterNo Gravatar July 21, 2013, 10:47 pm


      That’s a potential option for me. Basically, accumulate 10 properties or so and slowly pay off the debt, and cash flow every month. When the right time comes and the appreciation wave has reached its apex, sell half the portfolio to pay off the remaining half. So, basically end up with 5 free and clear properties.

      It could definitely happen. As we get older, I think our preference would be to start deleveraging as much as possible.


  • The First Million is the HardestNo Gravatar July 21, 2013, 5:09 pm

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

    • FI FighterNo Gravatar July 21, 2013, 10:48 pm


      Thanks! If I crash and burn… you’ll know what NOT to do 😉


  • small Business loan MindNo Gravatar July 29, 2013, 2:31 am

    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

    • FI FighterNo Gravatar July 29, 2013, 6:43 pm

      small Business loan Mind,

      Thanks! I’ll do my best to keep the updates coming.


  • chuckNo Gravatar February 26, 2014, 1:16 pm

    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.

  • Patrick FreezeNo Gravatar November 2, 2016, 10:22 pm

    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 valuable information.

  • Damon StrattonNo Gravatar July 20, 2019, 9:53 pm

    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!

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