Am I on the right track??? First investment property

[David Sheridan]

First time post here. Looking forward to gaining as much knowledge as possible.

Last July I purchased my first investment property. It’s a 3 family (3br, 1br, 1br). Newer roof, siding, windows. It’s an early 1900s house. Foundation recently repointed. So most of the major mechanical items are done. Will need a boiler within 5 years, other 2 boilers have 15+ years left in them.

I purchased the property by taking out a home equity loan (10 year) on my primary residence for the down payment and taking out a 30 year mortgage.

After PITI, my positive cash flow is $450/month.

2 of the tenants I inherited and have been there for 10 years. Rents are around $100 below market, but they pay on time every month and I rarely hear from them so I’m good with that.

My goal for this house is to let the positive cash flow account build and when something needs repair or replacing, I can just pull it from that account. I’m trying to not use personal funds for this house at all. I have a feeling it won’t go completely as planned due to the fact that the 2 inherited tenants apartments could use a facelift and if they move out in the next couple years, the positive cash flow account will not have built enough income to cover everything.

SO.....I would like to hear from the veteran BP members. Am I on the right track? Do I have a good plan??

The numbers all seemed to make pretty good sense with all the scenarios I played out and how the numbers worked out over 30 years including improvements and repairs.

My plan down the road to purchase another......worst case scenario I wait 3 years. At that point I will have paid down my home equity and the mortgage on my primary residence to refi the home equity and pull out enough for another down payment on a multi family.

So once again.....good plan????