Any articles/literature that got you thinking?

[Adam C.]

Looking for advice/strategy from like-minded, anti-risk, I want to maximize cash flow type folks. I'm 43. Wife and I are maxing out retirement accounts. Everything going through my mind is around securing our income during retirement and leaving some sort of inheritance to my children. I've got one LTR property that I'm trying to pay off prior to taking any additional risk in the form of loans. I'm hoping to pay it off and then I'll be ready to take a "little" risk to acquire a second LTR property. STR/MTR is a consideration after the 2nd LTR. Ultimately, I'd like to have 3-5 paid for properties heading into retirement at 65. Should I adjust my goal? Is that to short a runway to acquire that number? Can it be done?

If I was your brother getting my REI portfolio started, is there any advice, strategies, links, literature, articles, or people to follow that you would recommend for someone extremely leery of financial risk? Is there a particular forum in BP that you would point me to?

Thanks, 

AC

[Nathan Gesner]

Quote from @Adam C.:

The first "strategy" I would teach you is how to leverage our money to increase your returns. You shouldn't be afraid of a mortgage on investment property! As long as you are borrowing 80% or less and the properties are analyzed correctly, you shouldn't run into any problems. 

Read a few books on real estate investing to learn the power of leverage. I like the Unofficial Guide to Real Estate Investing. Here's a fundamental explanation to get your juices flowing:

Assume a house costs $200,000 and rents for $1,500. The market appreciates 3% per year.

Pay cash for one house and rent it for $1,500. After five years you'll have earned $90,000 in rent income and gained $34,000 in appreciation.

Buy four houses with $50,000 down on each. The mortgage payment is $1,000 on each house, so you earn $500 per house or $2,000 monthly. After five years, you'll earn $120,000 in rent income and $136,000 in appreciation. You've earned $132,000 more by splitting your money and leveraging it.