Why Target 4 Rental Properties NOT 100+

so why do I think four rental properties will change your life why do I always ask everybody to get started with four where there are actually several reasons for that the first and foremost is because I believe everybody thinks and believes it's possible when I talk about getting to four properties at events or with people on the internet it is always met with yes I think I can do that if you go to events and you talk about getting to 20 or 50 or 100 units it quickly becomes I wish I could only if I was younger and the excuses just start to pile up but really the reason about four is because that was my goal when I started at 30 years old I simply wanted to have four single family homes that would be eventually paid off by my tenants so I'm going to give you some basic math that was around my belief I also want to talk about what getting to four rental properties is is not let's do the math first so if we assume for a moment that the purchase price of a home is $200,000 and we assume that there is appreciation of Two and a half% each year for 30 years that will add up to drum roll please $419,500 basically in the span of 30 years as your tenants are paying off your units your property value doubles now you got to also remember it not only doubles but in all reality it probably goes up 400% how can that be well for most investors you're putting 25% down so in our earlier example of a 200k purchase you're putting 50,000 down and then the tenants are paying off the other 150 Grand so basically your 50 Grand becomes $ 49,51 now if you take that times 4 that is $1.68 million more on that in a minute but because these are investment properties not only do we have the purchasing price or the value we also have rent if we assume the same rent increase and we assume we purchased it with uh existing rents at $1,500 rents will again double and become $3,000 so again if we assume you have four rental properties each producing $3,000 that is 122,000 in gross income at which point you will have zero debt if we assume for a minute you are operating at 50% expenses which in reality you should be doing much much better than that but let's just assume for a moment you are running at 50% expenses that $122,000 would turn into $6,000 net after your expenses so again you spend 30 years your tenants paid off you now have a net worth of 1.6 million you have cash flow of $6,000 a month what does that mean well in reality what it means for most of you is you could go out and get a 50% loan to value you could borrow $800,000 about $840,000 to be exact and for many of us probably myself included that would double our retirement base and allow us to have a lot more income uh and cash to use in our retirement other things I want you to understand about getting to four is it's not not getrich quick at one rental at a time we are just that one rental at a time we are not talking about going fast we are not talking about Max leverage we are simply setting realistic goals getting to four and if we like that then we go for 10 where did this idea of four rental properties come from lots of people today Bigger Pockets Pace morby Ryan pan and others are talking about getting to five why do I talk about getting to four well the reality is I invested through the Great Recession I saw the banking environment Go from very loose to very tight and in the most tight most regulated environment you may not remember this but the lending environment was so tight you could only ever get four loans now you got to remember this was after the Great Recession I hope we never go back to that lending environment but even then even then you could get four Home Loans so that is why I have always stuck with four the other reasons four is important again as I've started this everybody believes it's possible I've asked this question to thousands of people and everybody believes they can get to four very few people think they can get to a 100 and even less should get to 100 I want you to understand that one rental at a time is not get rich quick it is get rich for sure also a lot of us are employees a lot of us like our jobs maybe even some of us love our jobs we are not trying to replace our income we are trying to give ourselves options that's what we are doing here and again the numbers are really simple if you assume a 2 and a half% uh appreciation for 30 years your property values will more than double same for rent so folks that's why I talk to get to four I talk about getting to four because it's believable it's something you and I can do and I hope you take me up on it and again when you get to the end of it when you are retired you can do so many things you could sell the houses you could take out loans you could take out $800,000 very easily you could you could do lots of things you could sell one keep three but again this is about giving you options how many people at 60 years old or 65 wouldn't like to have four single family homes paid off that is why I talk to four that is why I think you should Target four if you get to four great stop or go to 10 I hope that makes sense hope you enjoying this view we are leaving Iceland on our way to Greenland look at that spectacular view isn't that gorgeous it's so peaceful it's so quiet Iceland is so quiet I hope you get to enjoy it someday I'll let you go Ahad and watch the view for a little bit enjoy