Funding a second purchase

[Kelly Conrad]

Hello again! Another money question :)

Thanks to the folks who answered my first question about funding repairs, but now that brings me to a different question: purchasing second, third etc properties.

So say you have enough money to purchase a property with 20% down and you're also able to do a few repairs. You also have a little cushion of your own because you've already purchased a house that you live in (not house hacking or looking to really "flip it") and have dreams of being able to do bigger changes in your own home or going on a nice vacation someday.

So now you've spent a really good chunk of change buying that first property and doing some repairs and now you're making an extra $100 a month from that property which is getting re-invested. Now my question is, how can you afford to buy another property when you can't do the 20% down again? I can see how this would be super easy if you had a bunch of other properties already, but when you're putting money into your 401k and aren't getting another 20, 30, or 40 grand in a year (or even 5, 10?) to put down another down payment, how do you keep purchasing these properties? Also, if you're taking out a bunch of loans, how are you able to make money when you're always paying others off with interest (especially if you already have your own house with bills and a mortgage)?

Some advice on others who have been there and have been able to overcome that would be incredibly helpful! I want to do this so badly, but the conversation revolving around money and who's paying for what is something that's really important for me before I can start the process. 

Thanks in advance :)

Edit: In case it matters, I'd be focusing on properties in Minnesota, ideally in the Twin Cities area for buy & hold