Sample Investment Strategies
Objectives: Wealth Growth
Diversification: Property Class (mix of A & B properties); Location
PHASE I: (Years 1-3) Purchase one investment property in each of the first three years.
PHASE II: (Years 4-10) Use a cash-out refinance of the first property to fund the purchase of property #4 in year four. Continue pulling equity out using cash-out refinances to fund another property each year, until the investor now owns 10 investment properties.
PHASE II: (Years 11 and beyond) Options include
(1) holding the portfolio for another ten years, then selling the entire portfolio to exchange for an apartment building;
(2) Hold portfolio through retirement for cash flow;
(3) Use all cash flows as extra principal payments on one property at a time to pay down properties at a more rapid pace, then convert to heavy cash-flowing asset for retirement.
Year 1. Year 2. Year 3. Year 4. Year 5. Year 6. Year 7. Year 8. Year 9. Year 10
Cash flow (which is likely all protected from taxes due to depreciation expense) during the portfolio-building years can be reinvested by applying toward purchasing the next property.
After the portfolio is complete, cash flows can be reinvested in stocks/mutual funds OR used a living expenses if the investor begins retirement.