A Glimpse of My Personal Finances and How to START

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Although this is a new account, I have been coming on here for a few years. I have listed to every BP podcast, read some books etc.

I have been interested in investing since 2015, when I listened to, yep, you guessed it. Rich Dad Poor Dad. I have looked at a few deals here and there and pondered a lot but didn't know where to start (which stopped me).  Well, my wife and I committed a few days ago to making something happen. The problem is, I still have no clue where to start.

Our Goal is to replace our monthly income with rental income. Min $4000 (basic necessities), comfortably (for us), $6000. We'd like to have this within 5 years.

I have no clue where to start!

I am interested in mobile homes, mobile home parks, and multi-family mostly. But I am open to single-family and other suggestions.

I am in a decent market I believe. South Carolina, 10 miles from a decent sized university (huge football following), literally surrounded by lakes and mountains. (Maybe some AirBNB type options too.)

My biggest unknown is financing. I think we have a few things on our side but I have no idea what options would work for a first property and what type of property we should consider.

W2 income is 50-60K/yr but will be about 80-100K/yr soon. It is all from my wife currently as we are traveling for the past year for her job. I will re-enter the workforce in 3 months when we are done with her assignment, bringing our w2 income to the 80K-100K level.

We own an "accidental rental", free and clear, out of state, that grosses about 11000/yr less PM (1000/yr) and HOA (4600/yr)..it's a condo so that is why the HOA is so hight. Value about 130K (probably very conservatively).

Also have a 401K, currently about 160K.

Wife has debt of 27K for school loans. 

I have debt of 10K from business equipment loan. This will be paid off end of year.

We also own a house (primary residence) that has maybe 10K in equity. Owe 80K @6.625%. This was bought 10 years ago when credit was pretty low. This house is also not co-owned on paper.

Credit scores are both mid 700's.

We have about 5000 in cash on hand. We have had some recent medical expenses so had to dip a little. We'll be able to save an extra 2000 a month (conservatively) once I return to work.

I am asking for a bit of help on where to focus our attention as far as type of investment and the smartest way to finance.

Thank you to anyone who replies.

[Craig Johnson]

Erik, I feel your pain. I am struggling with the same questions. How much cash do you think you need to have on hand to get started, in a responsible manner? And, is it smarter for you to pay your own bad debt down first. I want to go NOW, but I am still trying to wrap my blue collar brain around using massive debt as a tool. My whole adult life has been spent trying to eliminate debt from my life.

One thing is for sure. There is plenty of money out there. If you find a deal that works, you can get it financed.