Hello everyone,

I've been surfing these forums for the past week or so, and have found this site to be invaluable information wise. I've read some of the beginner guides and blogs, financial summary run-downs, and just forum posts in general that have helped out a great deal. I'm just starting out in REI, and wanted to get some focused advice.

A little about me: I'm 24, married, and feel fairly stable financially. My wife and I primarily live on my income, though she has a business that generates a little bit each year. I have stocks, and a traditional 401k, but the returns just don't seem very attractive compared to REI. I've found the prospect of REI to be very enjoyable -- it's been a blast so far to research and I find myself thinking about it a lot these days, though by the title of this post, I've not yet started. Along the way, positive cash flow is the short-term / continual goal, of course, but I'm realistic and wouldn't look to live off any of the money the investments earn. It would basically go straight back into investing.

So, specifically, to speak about my finances, I've still got a mortgage on our residence. As it stands, if I aggressively pay it off, I'm looking at another 3 - 4 years with it. I feel as though I could handle another mortgage to get started, but that's where I'm seeking advice. I have some money set aside that's enough for a 20% down-payment on a house around the $100k mark, plus a little extra for any minor repairs, closing costs, etc. Do most investors start by getting their own mortgages paid off, or is that not even a factor?

I suppose the bottom line is what you can simply afford month to month, and so with that in mind, I could make it month to month with a $550'ish per month mortgage, in addition to my own, though that would be a bit tight. I'm only really worried about the big ticket items that come up, that I may not be prepared for. For instance, if a roof needs to be repaired, new HVAC system needs to be installed, emergencies, etc.

Is it best to have a certain amount stashed away that can cover that? What is a good ballpark figure for that amount?

Beyond the finances, I'm looking at a two family home to start. I figure it's easier to rent and less risk to cash flow if there's only one vacancy. The area I'm looking at starting out is in St. Louis, near a lot of colleges and in an active / on-the-rise neighborhood. Is it best to find a place with renters already there, or does that not matter? Are there any guides that explain what to look for, what questions you can ask, etc, with these types of properties in mind? I don't want to ask a question of the seller that I'm not supposed to (though I don't know that there are any questions off-limits either, apart from those that would be discriminatory to tenants).

Lastly, can anyone share more information about 'Umbrella Policies' as opposed to putting investment property in an LLC? I've read it's the same, liability wise, which is attractive as opposed to starting another business entity, but I wanted to get more input on that.

If anyone has any final thoughts / advice that I didn't specifically ask for, I'd love to hear it! Thanks so much for any help, and I look forward to contributing as I grow in knowledge and experience.

Regards,

Ken