So after meeting with my Dad and Brothers over the holidays, this is what we've come up with for our 2014 goals. The list is below.
These goals are on our must do list:
-- Re-finance Property #1 and pull out $10-$15k in capital
-- Shop our insurance around with a broker and make sure we're getting the best rate.
-- Add a 4th member to our LLC (my other brother who is almost out of college).
-- Adjust our monthly Contributions to go up by a total of $900/month over our current contribution level.
-- Purchase our first Multi Family Property(ies):
-- For a total of 4 units minimum.
-- A goal of $315/month cash flow per $100k spent**.
-- A total cash flow increase of $1,000/month (across new purchases).
These goals are on our "Nice to Have" list (in order of importance):
-- Refinance Property #2 for $10-$15k in capital.
-- Purchase more Multi-Family property (above and beyond 4 units)
-- If needed, package our 5 houses (or some combination thereof) and shop them around.
-- A 1031 exchange is most likely necessary so we need to purchase a multi-family with the nearly $40k-$50k we’d expect to get from selling this package within 180 days.
-- This could easily run into 2015.
** We discussed several options for how to measure "success". We batted around ideas about property numbers, unit numbers, profit, cash flow, etc. When we finally settled on cash flow as the ultimate indicator, but we then had to determine how to measure it. We batted around $X/unit/month, $X/property/month, and $X/month per $Y spent. We ultimately settled on cash flow for money spent. We've been making a pretty good killing in SFR's so we wanted to at least continue that success. We added up our 5 SFR's and determined that we make $312.50/month for every $100k we spend (that includes loan amounts and cash out of pocket). I've personally never heard of doing it this way but it makes sense to us. We just wanted to make sure we were cash flowing as well with our MFR's as our SFR's and this is the best way we could think of doing it. Maybe 10 years from now, we'll look back and say how could we have been so dumb, but I hope not :).
