The 7-Property Retirement Plan ($80,000/Year)

**Dave Meyer** (0:00)
If you can save one down payment, you can buy seven properties in 10 years. Most people think real estate investing is only for the wealthy, because they assume you need to save up 20% for every new property. But that assumption is wrong. And today in the show, I'm gonna show you how. If you can buy your first rental, you can have a portfolio of seven cash flowing properties that completely replace your income in only 10 years. That's right, financial freedom in just 10 years. With only a single property, you can build equity and then tap into that equity to fund future deals. So you're not starting from zero over and over, you're recycling the same small initial investment into bigger and bigger assets. And today in the show, I'm going to show you step by step, and with a real property example, how repeating this one strategy seven times over 10 years can build you a retirement most people only dream about.
Hey, everyone. Welcome to the BiggerPockets Podcast. I'm Dave Meyer. Happy to have you all here today. Recently, I've been thinking a lot about what is enough properties. What is sufficient to actually achieve financial freedom without adding additional complexity in my life? And although the exact number you need is going to be slightly different for everyone, I came up with the number seven. And it wasn't just random guessing. I built an actual financial model and found that for a relatively, quote unquote, normal American, this is the number of properties you need to acquire to completely replace your income within 10 years. So that's pretty exciting. And today on the show, I'm going to show you exactly how you can do this. What strategy to use? What kind of deals to buy? And I'll walk you through the math that shows that you can replace your income in 10 years or less, whether you're starting with a $50,000 income or an $150,000 income. So let's do it. First things first, big picture here. Why I'm proposing the strategy I'm about to talk about is that almost everyone who wants to invest in real estate gets stuck on the same question. Where do I get the money for the next property? Because maybe you save up for that first one, but every subsequent deal is going to require a new down payment, right? So that can be a major blocker. But the answer to this question is that for most people, if you're buying that first deal right, you already have at least part of your down payment, if not most of your down payment, maybe even all of your down payment sitting in your first deal. And this is the magic of the strategy that we call the BRRR.
The BRRR stands for buy, rehab, rent, refinance, repeat. And the magic in this deal strategy is in the refinance step, because if you build enough equity through the rehab and rent stage, you can then pull out the equity that you've built as cash through a refinance and use it to fund your next purchase. Let's just talk a little bit about how that works. So first thing you do is you go out and buy this property. That's the first B. The R is rehab, and that's where you renovate a property. You make it worth more than it was before, and you need to do that by spending less than the value you're creating, right? So you need to generate $50,000 in new value from the property by investing $20,000 as a simple example.
And if you do that, you can actually pull that $30,000 out and use it for your next deal. Any investor I know who scales does this at some part of their investing career because it just works so well. And you can find these deals on the market today, and you don't need to do heavy rehabs. You can just do a cosmetic burr and make this work and repeat deals over and over and over again. So if you want financial freedom in a short timeline, this is what I recommend you do, the cosmetic burr. So let's talk about the steps you need to follow to actually do this.
First thing you got to do, define your buy box. So you should spend a little bit of time doing what I call a resource audit, which is just figuring out what resources you can bring to your first deal, because every portfolio is comprised of basically three things, time, money, and skill. And so if you have a lot of time, great, you can do more of a rehab, you can spend more time finding a great deal. If you have more money, that gives you a lot of flexibility. If you have more skill, you can do the renovation yourself. So just figure out what you have and what you can contribute to that first deal. And once you've done that, go out and figure out what are the right kind of deals and if they exist in your market. Because in this episode, what I'm talking about is going out and buying a cosmetic burr. You got to go check if this is possible where you live. Just going to tell you right now, you live in LA or New York, this isn't happening for you, right? That's okay. You can go long distance. You can do this somewhere in the southeast or in the Midwest or in Texas or in Oklahoma, whatever. There are great places where you can absolutely do that. But all things being equal, if you can do it in your own backyard, I would. So check that out and figure that out. If you can't, go out and find a market. We have tons of different episodes on the show about going out and finding a market. But that is a step that you'll need to take if you can't do these in your own backyard.