Back in action baby!
Yesterday was very short because I was busy so today is going to be a touch longer and back to a normal post.
Overall, I think things are going well. In fact, things are looking extremely interesting.
We bought our 6 unit apartment building from an investment group that had fallen apart. That group just wants to get rid of their properties so they don’t have to deal with each other anymore.
They have another $2.5M of properties (~60 units) that they want to get rid of. I’ve told the agent that we want to buy the properties and outlined a plan to buy them all over the next year. This is that 24 unit I’ve mentioned at least a dozen times.
Well, here’s the crazy thing. The group reached out to us via the agent and offered to sell us the entire package in one swoop. Even better, they’re going to do seller financing on most of the downpayment. We could end up getting $2.5M worth of properties and ~$75K a year of cash flow (not counting the equity repayment) for ~$125K out of pocket.
With these units, our portfolio would be 74 total units and bring in more than $400,000 a year in rent. After expenses like maintenance, property management, taxes, we would be left with ~$200K a year to pay the mortgage with. We’d pay ~$125K a year in the mortgage, leaving $75K profit for us.
Said differently, we’ll bring in $75K a year in income per year on a $125K initial investment.
It also means we destroyed our initial goal. Our initial goal was 15 units this year. If and when this deal goes through, and we have 74 units, it means we 5X’ed our initial goal.
This is exciting as hell for so many reasons:
- It means we are well on our way to real estate cashflow that allows us to retire
- It means the power of goal setting is real, and something that can work really well for us
- It means staying in touch with people (the agent), and telling them our goals means that people know what we’re buying, so they sell it to us
- $75K of cashflow added to our marriage is essentially adding another full-time person’s salary to the mix.
Here’s the flip side, which I’d argue is just as important. Our leverage profile increases dramatically.
A severe economic downturn, or a surplus of tenants who don’t pay, means we are risk of serious default across everything. The odds of bankruptcy increase big time now.
In this case, the piece that matters most to me is Break Even Occupancy. I care about what percent of our units can be vacant but still allow us to cover all of our expenses.
If we have a 50% BEO, it means as long as our units are 50% occupied, we won’t be in trouble. I’d be willing to risk that’s okay, but I don’t think we’d have 50% of people be unable to pay.
If we have a 85% BEO, then things are risky. It’s not hard to see a situation where we would have less than 85% occupancy at some point.
I would love a dashboard or something like this that displays this for me. Maybe I’ll work with someone to build out a database for that; TBD!
Yesterday there were 1,595 days until I turn 30 and need to make $10K a day passively. Here’s how I spent it in pursuit of that goal
The current phase of the plan
I’m in Phase #3: The Business Phase. You can read more about the phases and my plan to get to $10K/a day at 30 here.
I still consult, and I still have a job. I’m looking forward to removing both of those ASAP.
Wake up & sleep:
I woke up at 6:30 after going to bed at 10:48, for a total recovery of 46%.
My fiancee and I walked together for a few miles. Whoop had strain data low at 5.2
I was at a 4/5, with 1 being the highest. I’m feeling in control, and most importantly, am excited about the opportunities from buying more real estate!
Diet was coffee, eggs, and a dinner of stir-fried vegetables. 2/5 with 1 being the best.
I watched the Netflix documentary “Game Changers” again.
I absolutely love meat, ice cream, and other animal-based products. Chicken wings are my go-to comfort food.
However, the documentary, and the actual data, makes it pretty clear that animal-based products slow you down and reduce your energy.
I’m trying to live a 0.001% life. You don’t get to that by living the same way as everyone else. I need every possible tactic necessary to get myself to this extraordinary life.
If that means eating plant-based to get more energy, then it’s worth trying it. I’m going to give it a shot for a few weeks and see what happens to my energy levels.
My Day Job
Wednesday. I attended a few calls.
Investment real estate
I talked about this above!
My Actual Business
Slow but almost done here.
Just about done
Market Research & Customer Interviews
A couple of calls here too
Sourcing new work
I had a pitch call for a quick $2,000 pitch deck here. That would be great if it coms through!
Long walks with my fiancee
Rescue Time Daily Screenshot
What I made today
Current Income Streams
- Job: $170
- Rental Income (13 rental units): $43
- Framework: $250
- Customer Interviews: $430
Planned income streams
- 15 websites
- My Startup
- Local Serviced Based Business (cleaning business)
- WordPress Maintenance Site
- Content sites
- Dividend Income (municipal bonds)
Today’s pro-rated amount of monthly & yearly expenses
Life Expenses: $89.73
- Rent, utilities, Internet: $63.33
- Phone Bill: $1.57
- Heath Insurance: $8.90
- Ladder Life Insurance: $0.83
- TrueBill for Budget tracking: $0.10
- Car: $15
My Startup’s Expenses: $0.16
- Bluehost Domain name: $0.16
Health Expenses: $12.00
- Peloton: $3.20
- Gainful Protein Powder: $1.80
- Care/of Vitamin pack: $3.00
- Whoop fitness tracker: $1.00
Productivity Expenses: $2.25
- SuperHuman to save time on email: $1.00
- Rescue Time to keep me honest on my productivity: $0.20
- Fantastical as my main calendar: $0.20
- Evernote to track everything: $0.27
- Grammarly to keep my emails looking okay: $0.38
- BackBlaze to keep my files backed up: $0.20
Consulting Business Expenses: $302
- Gusto to pay myself: $1.50
- Quickbooks to track expenses: $0.40
- Google Business Email Account: $0.40
- Fiverr for virtual support: $0
$10K a day: $12.42
- Kinsta for hosting: $1.00
- Bluehost for domain names: $0.03
- WP Rocket for speed: $0.14
- Link Whisper for SEO: $0.14
- Elementor for site design: $0.14
- Astra for theme: $0.14
- Rhino Rank for SEO: $10.83
Real Estate Investing: $0.52
- Legal Zoom Registered Agent (all LLC’s): $0.52
Today’s Income (pre-tax)
Topline of $893, spent $119, which means….
Made $774 (pre-tax).
My plan for tomorrow
Tomorrow is Thursday, and I need to do:
- Some finish up work on my financial modeling
- Award a winner on my design project
- The case study
- A few calls and interviews
1,594 days until I turn $30. I’m making $10K a day passively by then