How I'm starting out

[Shaun R.]

I've got my game plan together to get started in real estate investing.  After a lot of pondering on what to do, I've decided that owning mortgage free rentals makes me feel all warm and fuzzy inside.  By nature, I'm not very risk averse... I'm a gambler and I like the high risk, high reward scenario.  And if I were a single guy I would definitely lean toward going out and leveraging lots of properties and building a large portfolio of rentals.  But, since I'm married with two young kids I feel like I need to go a safer route.

My goal is to replace our household income with rental income.  I don't know that i"ll even quit my job when that happens, but I know it will be nice not to be shackled to it.  Between my wife and I, our hh income is around $120k at the moment and should increase over the next couple years to cap out at around $150k.  

The gameplan is to start aggressively paying down our current home.  When it is paid off we will rent it out and move on to the next house.  The next house may be the one we end up staying in long-term, but we will pay aggressively on it (including using the rent collected from our first rental) and purchase the next rental once it's paid off.  The plan is to use all rental income, after expenses are paid, to pay off each new purchase since I don't need it to live on.  

I've also got some consumer debt to payoff, but I'm going to keep making the scheduled payments and let it pay down as it is scheduled.  My first thought was to pay down the debt first, but I've been making excuses for years on why I haven't gotten into real estate.  

I just made the first extra principal payment on my house.  The balance on my mortgage is $157k and I believe we can have it paid off in 5-6 years.  I know of at least one rental in my neighborhood that is similar in square footage, but has 3 bedrooms (mine has 4) and rents for $1600/mo.  

I have read lots of arguments on these boards on which way is the smarter way to invest in rentals, and I believe that the people that do it the way I want to are the minority.  But I've seen a few examples of people that have done it, and seem to be doing well.  I'd love to read some of those success stories right here on this discussion if you've done it this way, and are happy you did.  Or I'd even like to hear if you've done it and regretted it.