What to do with my $55,000?

[Keegan Uderitz]

Hello all!

We are currently on the market looking at deals in Tennessee, Georgia and some in Minnesota. How long is normal to make initial investment back? The deals I am looking at are 5-7 years to get that initial deposit back. We are looking to replace my income with income from rental investment properties. With "only" $55k to invest right now the cash flows are around $300-500/mo. Its going to take us a while to reach our goal of $10,000 in cash flow per month but I feel like we need to start somewhere. I am looking for advice on a first property, for something that is cash flowing. I have read 10-12% return is ideal, thats still a small number in the big picture of things. Looking to build confidence, and seeking advice on our first purchase. 

[Joe Villeneuve]

Stop looking at percentages...they tell you nothing of value. Look only at dollars. What you need to do is layout a financial plan aiming at your ultimate financial goals (in dollars), with specific financial steps along the way, making sure that each step leads directly to the next, and so on...much like a college curriculum. Each class being a prerequisite for the next, until you graduate. With REI, graduation is achieving your financial (specific...not, "I want to be financially independent) goals.

Next, you need to forget about collecting income properties at the start.  It will take you forever, and every property will cost you money.  Instead, focus on flipping your cash over and over, so you use your cash multiple times, and in the end never actually spend it.  This will allow you to receive exponential gains rather than linear.  Notice I said flipping your "cash"...not properties.