What would you do? (buy,hold,refi,.... repeat)

[Christian Podedworny]

I have decided not to sell my home that I hoped to flip instead I am looking for a section 8 tenant to fill the vacancy and pay around $1000/mo. If this formula works I am looking to buy a similar home for $35,000 to $40,000, put a 20% down payment and rent it out to another section 8 tenant for the same amount. With the first home not having a mortgage I can refinance it,pull out $25,000 and purchase another 3 homes where I will have a portfolio of 5 homes.

5 x $1,000 = $5,000 Monthly rents

Are there some precautions I should be aware of or mistakes that can but me at risk. Many people have made a successful living with this simple formula,but I have to see the pitfall before I carry out this strategy. Can someone chime in and share their experiences of how they started such a strategy?