After much research on passive income and wealth building, I decided that I wanted to get into real estate. I would love to be an investor in the future (not to be mistaken with a landlord. Who has time for clogged toilets? Certainly not me).
As mentioned in previous blogs, I chose to invest in turnkey properties because that is what currently works for me. Turnkey companies help people buy properties that have been rehabbed. Property management companies rent them out, and all you do is get the checks and approve major repairs.
When I came across the real estate freedom number formula, I was excited. The goal of the formula is to figure out how many performing real estate properties you need to gain financial freedom. Let’s give it a try.
Assuming you have a property that yields $420 per month, here is how you can determine the number of properties needed to achieve financial freedom:
Divide your freedom number (the monthly income you need to be financially comfortable; and for demonstrative purposes, we’ll use 5,500 as the freedom number) by 420.
5500/420 = 13.09
What this number means is that you need 13 properties that produce $420 or more a month in order to gain financial freedom (in other words, you would have enough money to live comfortably with real estate investments alone).
You are probably thinking: wow, how do I get 13 properties? That’s a bit of a reach. Not to worry! I used to feel the same way. Based on my personal calculations, I need 24 properties to attain financial freedom and I have mapped out a plan that would help me to achieve this.
I plan to buy 1-2 properties a year with the goal of being financially free in ten years. You can’t improve what you don’t measure. Determining the real estate freedom number gives you a goal to work towards.
I decided to invest in multi-units to decrease my risk of vacancies. A Chicago duplex deal fell through last year, but we found a fourplex in Ft. Worth this year, and inked the deal on it last month. Based on cash flow this deal is counting as 2 properties. 2 properties down, 20 more to go!
As always, self-experimentation is the key to opening up new possibilities in your life. Give it a try and you might be pleasantly surprised.
Do you struggle with work life balance? Do you want happiness and fulfillment in your medical career, family life, and finances? I can help! I have 4 free breakthrough coaching consultations available for this month. Click this link to book.
If not now, then when? Don’t wait. Book your consultation today.
