Rookie Investor trying to gather his footing..

[Raj Kumar]

Hey all!! Hope everyone's having  a great day!

I'm a rookie investor who recently (like one year ago) bought my first property and then my second. I moved into the first property and put up the second property for rent earning a net cashflow of approximately 200$ on the second property(both are condo units almost identical). Both are 15 year mortgages - also i took advantage of the "COVID mortgages" low rates and got some attractive rates for both of them.

I earn approximately $160,000 (pretax) annually & have approximately 270,000$ in savings still left after these two purchases and am curious about purchasing my third (and fourth etc) similar Condos (assuming an average market prices of 220k per property). 

The question is : Given my savings and the current mortgage rates and the so-called threat of recession  - how does me purchasing these additional properties look risk-wise? I'm not getting any interest in my savings naturally and I'm stock market averse. Would it thus make sense to embark on getting these additional properties or am I being too risky? 

[Scott E.]

Unfortunately nobody here is going to be able to answer this question for you. Nobody has a crystal ball, and nobody can gauge your risk tolerance better than you.

With that being said, my 2 cents is that if you can buy a property right now in a strong location, with a growing local economy, and one that cash flows for you, then do it.

[Raj Kumar]

thanks i realize its a bit of a stretch but ballpark wise  for 270000 in savings that gives no interest rate. Would two properties make sense (assuming 20% Downpayment per property worth 200k would leave me with 165000 in savings)

[Sebastian Hernandez]

Raj, welcome to the BP Community. 

This one is a tough questions for others to give you a straight answer. What I will comment is, take a look a your long term goals and figure out which investing strategy or strategies will help you reach your end goals. Once you figure our your strategy, I would definitely encourage you to make some more acquisitions because inflation is high right now and interest on savings accounts are very low. 

[Andrew Freed]

@Raj Kumar - I would consider 30 year fixed financing for your next few purchases. Your returns will be better and with inflation in the 9's, you're better off taking the difference you would have paid down and investing it into another asset class with higher returns, e.g. more real estate or stock. With that said, you are in an extremely strong financial position assuming your monthly spending isn't absorbent. My last piece of advice is why only go for condos? You realize that it's pretty much the same amount of work to get a single unit deal under contract vs. a multi? Why not aim for accumulating more units with each transaction and perhaps utilize the stacking strategy. Condo's are an okay investment, however those HOA assessments are so unpredictable. They can kill your cash flow for years.

[Steven Foster Wilson]

Quote from @Raj Kumar:

Hey all!! Hope everyone's having  a great day!

I'm a rookie investor who recently (like one year ago) bought my first property and then my second. I moved into the first property and put up the second property for rent earning a net cashflow of approximately 200$ on the second property(both are condo units almost identical). Both are 15 year mortgages - also i took advantage of the "COVID mortgages" low rates and got some attractive rates for both of them.

I earn approximately $160,000 (pretax) annually & have approximately 270,000$ in savings still left after these two purchases and am curious about purchasing my third (and fourth etc) similar Condos (assuming an average market prices of 220k per property). 

The question is : Given my savings and the current mortgage rates and the so-called threat of recession  - how does me purchasing these additional properties look risk-wise? I'm not getting any interest in my savings naturally and I'm stock market averse. Would it thus make sense to embark on getting these additional properties or am I being too risky? 

 Hi Raj,

I personally would keep investing. You could easily get multi-family properties with that money as a down payment. I think you have to run the numbers and if a deal still makes sense then why not do it? If you wait for rates to go down or for the recession then you will miss out on great deals. If you want to continue to scale then write out a game plan and go for it. If the area you are investing in now is too expensive then look OOS. Get your core 4 https://www.biggerpockets.com/... started and keep the ball rolling. Personally, I think your money would go rather far here in Ohio with all the different markets. Not to mention our appreciation has been 8% higher than the US national average, because of the high demand for affordable housing.

[Craig Sloan]

@Raj Kumar if a deal makes sense long term, go for it.  I also agree with @Andrew Freed.  Why limit yourself to condos?

[Nicholas D.]

I would recommend anything but Condos! HOA's result in one more factor you have little to no control over.

That's far too much liquid cash in my opinion, but as others have stated it's all based on your needs and goals and risk tolerance. Look into multifamilies.