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First Time House Investor
Hello everyone! I wanted to post on here a little bit about what I've got going on / what I've been debating doing....and get some feedback! I bought my first piece of property when I was 19 (Im currently 24). Since that time I have bought two more times (all adjoining parcels of raw land). This amounts to a total of about 30 acres of (mostly) tillable crop ground.
The first and biggest piece I bought was paid for out of pocket, the subsequent two where purchased with seller carrying the mortgage at a rate of 3% (family friend, gave me a great deal!). I am currently cash renting it to a farmer as well as renting out hunting rights in the fall. This covers about 40% of my monthly payments and expenses.
My next goal is to purchase a duplex (cost of ~$85,000, each side currently rented for $575 a month w/ stable renting history. I will be able to put 20% down on the duplex should I need to for obtaining a loan.
I would then use some of the positive cashflow from the rented duplex to pay its expenses as well as cover expenses from my previously purchased farm land ($700 / monthly payment) - less 40%. $420 out of pocket each month.
The payments on duplex would be $500/month mortgage. So...$1150 income - $920 mortgages, remaining cash flow of $230 per month.
So down to my question. Cash renting farmland has basically zero expenses except for taxes. With a duplex, I have no idea. I can't seem to find solid numbers - seems to vary wildly. Would this be a worthwhile endeavor? I want to make another leap into real estate investing and this makes the most sense to me...any arguments agreeing or disagreeing?!
Any feedback greatly welcomed!! Thanks!
With respect to your question about expenses for rental properties, you'd probably be interested in learning about the "50% Rule" we discuss on here a lot. Do a search for existing threads on the topic, and here's a video that also provides an explanation:
Thanks!
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Brandon Turner
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Hey @Andy Wayne welcome to the site! Great to have you here!
I'm gonna also throw this video here, since now we can put youtube videos here in the Forums!