First Time House Investor

[Andy Wayne]

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!

[J Scott]

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:

50% Rule Tutorial

[Andy Wayne]

Thanks!

[Brandon Turner]

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!