All Forum Posts by: Account Closed

Interesting. So is it a general rule that you get much better cash on cash ROI the more you leverage? But it's a bit riskier as you are in the hole if property values take a dive.

Hello and happy Friday!!

I'm looking into where to put some cash and I like the idea of buying something cash and renting it out. The theory is that I can have fewer properties to manage and less debt than leveraging, hoping that I can get good ROI and get to financial freedom with 3-4 fully paid off rental properties within 6/7 years, each mortgage free property helping to finance the next one.

So say I can save 3k per month from the day job. My primary residence is mortgaged at around 2k per month but I can buy one additional property outright now.

Now:

3k per month from rental #1, 3k per month from savings - pump that into my primary mortgage and I can have that paid off in 4 years.

In 4 years:

Buy another rental (#2) with a mortgage and rent it out.

2.5k per month from rental #1, 3k per month from savings, 2k per month from not having primary mortgage anymore . 2.5k per month from rental #2 - thats 10k per month you can pump into payments at that rate you could also pay off in 3 years (10 year mortgage of 350k at 4.25% is about 3500 and you are making an extra 6500 per month in payments bringing it down to 3 years)

So in 7 years I have 5k per month income and I have a mortgage free primary residence, right? That seems simpler than trying to scrape together a couple hundred dollars a month from a whole bunch of properties to get to the thousands of dollars per month I want coming in. 

And a bonus question... am I being unrealistic to look for a market with 15% ROI on a mortgage free STR? Should I aim for more like 10%.

Double bonus question -- WHERE can I get 15% ROI on a mortgage free STR??

Thank you all, lots to think about

Thanks all for the responses, very helpful!

Hi there,

I have the opportunity to buy a rental property outright but I would need to sell an existing rental property that has some equity but isn’t yielding much in monthly profit. 

I’m thinking that to really start making money, having one mortgage free rental property is the way to go but I’m nervous! Especially since the new property is in Mexico, the existing mortgaged property is in Chicago and property tax increases are really eating into profits.

Any advice? 

Hi there, I’m new here and am

thinking about buying a vacation rental property in puerto Vallarta, Mexico. I’m crunching numbers and have airdna data for the area and when I put in the address and property stats their model spit out that my occupancy would likely only be about 56% which seems really low. It’s a 2 bed 2 bath in the romantic zone, basically the best tourist area. I have seen others stats sit at anything between 70-90%. Which numbers do I trust??

Thanks in advance!

Bernadine