Need a Starting Plan

[Dan Brindley]

Hi,
My goal is to rent out as many homes as possible. If I had a starting amount to spend on this endeavor of 100k, how would you go about purchasing rentals.
I want to focus on duplexes. I guess I need advice on how to buy my first place. Should I buy the house outright, or finance most of it?
Then what would be my next plan of action on purchasing the next one?
Any advice is appreciated.

[J Scott]

Much of your plan needs to be derived from personal goals, amount of risk you're willing to take, your personal finanical situation, etc.

For example, there was someone who posted the other day whose plan was to save up for a couple years, buy a rental, save a couple more years, buy another one, etc. He preferred absolutely no mortgage (lowest amount of risk), and was happy building up his assets are the long-run. This is a perfectly valid plan given his goals and situation.

On the other extreme, there are those who will try to finance 100% of their purchase (if possible), buy as many rentals as they can without concern for having backup funds, etc. This is a very high risk plan, but for some people it works -- if they don't go broke first. Again, this plan is perfectly valid for those who decide they are willing to take greater risk.

Most of us are somewhere in between. Some of us are happy to borrow up to 80% of the equity, keep small reserves, and spend a couple years building our portfolios. Some of us like to keep our equity at at-least 50% of property value, keep large cash reserves and build our portfolio over 10-20 years.

Assuming decent credit, income and financial stability, any of these plans (with perhaps the exception of 100% financing these days) is viable. Only you can decide which is right for you based on your goals and risk.