Just getting started and wanting to discuss strategies.

[Zachary Dosch]

Hi everybody - Long time reader and new poster.

Im 25 years old and just getting started in REI. The more research I do the more Im convinced this is how I want to invest my money. My family has also had success in REI so I figured why reinvent the wheel?!

My goal with REI is to get to a point where it is a full time job and the income it generates is something that can not only take care of myself and my family presently, but also for future generations. My primary strategy will be buy and hold and build up the excess cash flow for a down payment on the next property. I want to keep this going until I get into at least 7-8 properties which when paid off would net at least 10k/month. However, when Im 35, I want to transition from using the downpayments to get into extra properties to paying off the properties and potentially consolidating the equity into 2-3 12 unit apartment complexes, putting them on a 15 year note and having them free and clear when Im 50.

Currently I have two single family residences and I was able to purchas both of them OO (moved out of one and into the other). The first I purchased for 165k and it has $325.mo net positive cash flow. The house is now currently valued at 185K. The second house and the one that I am currently living in I purchased for 160k with $200/mo net positive cash flow from my roomates and the value of the place is currently at least 180K.

Im from North Dakota and the housing situation is very unique. Due to the oil boom and other factors, houses, especially in Bismarck where I live are appreciating at a nice rate. Historically, home values have always stayed at about a 3%-6% steady rate per year. The foreclosure rate is next to zero and the houses that do go into foreclosure basically sell for market value. In addition to that, the rental market has heated up. Its a very unique situation but it has turned out to be very profitable. There is no flipping of homes (the guy tried to flip the one I currently live in.. made for a nice amount of built in equity). To me, this market is calling for buying and holding.

For my next investment, I am eyeing a side by side duplex that I would move into. You can get into a good one for $225k out here with decent cash flow. Either that or another SFH as I have really grown fond of how easy they are to rent and maintain in addition to the quality of renter they typically attract.

My question to you guys is 1.) what are your thoughts on my strategy 2.) what are your concerns and 3.) If you would do anything differently.

Also, Im guessing you will have more questions about the current situation as it is fairly unique and I will answer everything to the best of my ability. Thanks in advance, fellas! You guys are life savers!