New Member - Hi All - Quick question

[Waqar Yakoob]

Hi everyone, Thanks for giving me this opportunity to be the member of this community. Given I am new here, first question. 

I recently bought a rental property in a top area in Charlotte with 20 percent down and 15 year mortgage. The property will not produce positive cash flows. However, rental income will be able to take care of property taxes, HOA (fee), home insurance and P&I on 15 year mortgage. I will not get any positive cash flows, possibly few dollars will go out of my pocket. However, my saving is essentially going to be the principal pay down on a monthly basis and hopefully end of 15 years, I will be in a sweet spot.

Wanted to check any expert thoughts on this model for investing in rental properties. 

Thanks everyone!!!

[Kevin Siedlecki]

@Waqar Yakoob - Very few people here are going to condone that strategy. You need some cash flow to grow, especially since you haven't included CapEx, vacancy, or management in your expenses. You might be coming out of pocket for a lot more than you anticipate if you run into any issues with tenants or mechanicals early.

You might consider trying to refi into a longer amortization to keep more positive cash flow. Is this going to be your only real estate investment? If so, then having it paid off in 15 years to get significant cash flow coming in isn't a terrible idea. If you want to grow your portfolio, though, this will not fit that strategy.