ideas for 2nd and 3rd properties

[Greg W.]

Hi- My wife and I just purchase our 1st property. It is a duplex that we will live in one side and rent out other. I set a goal for my self to buy at least 2 rentals per year.

 My wife and I both work salary paying jobs, have excellent credit, have 50k+ in available credit via credit cards, a few personal lines of credit but not a whole heap of savings. Any recommendations on how I should pursue next couple properties? Not a lot of money in the bank is my challenge.

Thanks,

Greg

[Hattie Dizmond]

Assuming you used your FHA 3.5% loan to purchase that duplex, I would stay in there for the year required by FHA, while saving as much cash as possible. After 1 year, I would find another duplex, finance out of the FHA loan on the first one, and buy another duplex. If you bought the 1st one at the right numbers, then you should have at least a small cash flow, once you rent out the 2nd side. I don't know what your monthly income vs expense is. However, with at least 1/2 of your mortgage paid by the tenant, you should be able to put some money aside. Even if you have to repeat that process twice, while you're saving cash, you're still not stagnant, because you have 2 properties at the end of 2 years. Then you can start doubling down on some single family residences. The other option is to leverage private investors, if you have friends or family that will loan you the money with favorable terms.