Newbie from Wisconsin

[Nick Bleser]

Hi Folks! This is my first post. My wife and I recently bought our first rental property and are trying to figure what to do next. Our first property is only 2 months behind us but we are bouncing around the idea of making another deal. 

Our first rental has positive cash flow and nets us about $200 a month. My question is do a lot of deals only bring in a couple hundred dollars a month. Is this how everyone starts. We fear buying another rental because of the possibility of stacking debt with such small income from each property.

Thanks for the feedback and I'm excited to learn here at BiggerPockets.

[G. Brian Davis]

Hi @Nick Bleser, and welcome to BiggerPockets!

My first piece of advice is just checking in on how conservatively you're calculating cash flow. Are you including realistic vacancy rates? Repairs and maintenance? CapEx? Property management expenses (regardless of whether you're managing it or someone else is)?

My second piece of advice is waiting six months and stashing more cash before jumping right into another deal. Use that time to further your education and get to know your target market better (or to choose a more profitable target market, depending). 

Having more cash will also help with my third piece of advice. I would consider a small multifamily property for your next deal, 2-4 units. That reduces your concern about stacking debt with so little income per mortgage. You can earn several hundred dollars per door, with multiple doors per property. 

Here's an article you might find useful on this topic: 

https://www.biggerpockets.com/renewsblog/lump-sum-...

Please feel free to PM me any time, and best of luck!