Newbie from Wilmington, MA

[Cheryl Prior]

I have a plan to retire in 4 years from a job that I do not enjoy all that much.  It would help boost my retirement savings and possibly shorten that length of time if I begin to invest in real estate.  Plus, when I retire, I don't plan on just sitting around, so owning and managing rental property would actually be a new type of job for me.

Investing in rental property has been on my radar for many years, but I've been hesitant to take the plunge.  I am ready now, with a lot of home equity to borrow and a partner also.

I am enjoying this site with its wealth of knowledge, and have read more than halfway through "The Ultimate beginner's guide to real estate investing."  The more I learn, the more I gain confidence, and the more excited I am feeling.

I have tons of questions; not sure if I post here or on another forum.  My first question would be, in my area, how could I apply the rules of thumb  in  evaluating a property such as the 2% rule  and the 50% rule?  I am looking at homes in the $500-600,000 range, mostly 2 families, although there may be a few 3 families.  Is there another rule to apply in my area?

Thanks in advance for your help.

[Arlan Potter]

Buy cheap houses. I would rather buy 10 $50,000 houses than 1 $500,000 house.

The returns are better. Plus if you ever get into a jam, it is much easier to sell a $50,000 house.

Lets say you retire with 20 houses that you bought for $50,000 each. Fixed up a little and had them rented. The monthly income would be great. The in about 10 years, the houses had appreciated some and they are rented and in much better condition than you bought them in. You are now in your seventys(assuming you retire at 65) You could continue to manage the portfolio, but also start selling one per year. That would be rental income plus maybe $75,000 cash per year in home sales. By the time you are 95 you are done with the houses, have a ton of money in the bank, and ready to meet the Lord.

Sweet.