New to RE Investing from Quincy, MA

[Account Closed]

Hey everyone my name is Justin. I'm from Quincy, MA.  First, I just want to say that I have enjoyed reading the site over the past week, it's been a great learning experience. My background in real estate is fairly limited. I joined a real estate law firm in July of 2015 and have been working there ever since. So, while i'm well versed in closings, purchase and sale negotiation/drafting and title work i'm not nearly as well educated in what underlying numbers make a deal work from an investment perspective. Although I have since learned a bit about the 2% rule and 50% rule.  

In terms of goals, I don't think that I want to have a big portfolio (although this may change the more I learn). What I always envisioned was turning my current condo into a rental after living there for about 5-8 years (it's in a nice location about a five minute walk to the red line, for those non Bostonians that's one of the train lines that takes you into Boston). When that unit gets paid off I would then buy another and so on and so on. My underlying logic behind this is that I don't want to over extend myself. By adding one unit at a time where my salary can cover the rental mortgage and my personal mortgage I view it as a less risky play. 

Although, I have a feeling that it may be the exact opposite, by keeping only one unit there is far greater risk because you could have a situation where your rental portfolio is 100% unoccupied/or worse you're stuck with a bad tenant. This is a very different model from what appears to be the norm of adding lots of units quickly/rehab/cash out refi, etc. so any comments on why my strategy would be a bad long term strategy would of course be much appreciated.  Thanks and glad to be a part of the community! 

[Jason Carter]

Hi Justin,

To me less leverage always means less risk.  Having enough income from your job to cover all of your mortgages would help me sleep better at night.  If you seek diversity in terms of # of leases in place you may want to consider a Multi.  I'm interested to hear what others have to say.

Good Luck!

Jason