First Deal--Requesting Feedback

[Glenn Paulson]

After a long period of talking with different people and watching many podcasts and videos, I am ready to move forward. I have one property (Condo) in NJ that my sister and I rent out. This property was my mom's prior to her passing (full equity). It currently has a $750 cash flow. I am currently 49 and recently unemployed. I have a opportunity to buy a like condo in the same community for around $65-$70k. Taxes are reasonable as is Maint Fee. These properties are typically valued around $80-90k. This property would conservatively cash flow over $700 as well (with full equity). Since I currently have no W2 income, I am considering pulling the needed cash from my IRA. Like many people, I typically was against doing this for the understood reasons (Taxes/10% penalty) etc. Due to the low price and timing, my full strategy is the following:

Buy the property (all cash deal)

After getting employment, Cash out refi this property to purchase 3-4 more properties.

Cash Flow on the three to four new properties will be $350 per unit (total of $1,400-$1,750)

Would like to get some feedback. One of my goals is to get to my freedom number within three years.

Thanks

Glenn

[Will Barnard]

Do not cash in your IRA early and eat the taxes and early withdrawal penalty. Counterproductive to your end game.

Roll the IRA into a self directed version and buy the property with IRA funds (you can get a non recourse loan too).

As @Christopher Phillips mentioned, every property needs to cash flow with at least 70% financing or it is not a good deal from a cash flow perspective.

Also, this $700 or so cash flow you are quoting, does that take into account all the expenses? Taxes, insurance, vacancy, eviction costs, repairs, maintenance, property management, accounting, etc.