All Forum Posts by: Jacob Compton

 @Andrew Cichon Good point. My thought on this is that paying off a mortgage is no risk. I can still pay it off within 2-3 years and thenrent it out for 1750.. and after that purchase a duplex/triplex and do the same thing, pay it off ASAP while renting extra units and once its paid off.. go get another one. It is slower than leveraging mortgages, for sure, but safer and I dont need to spend so much time looking for that diamond in the ruff.

@Sean McDonnell I am living in kc, ks. I have a 401k but nothing else invested

Hello BP! I am interested in thoughts from the REI community on my situations...

I bought my first home in March 2019.
Home Value - 178k
Original Mortgage - 170k
Current Mortgage - 155k
Loan Type - 5% conventional
Loan info - 4.25% 30/yr fixed
Monthly payments - $1477, includes Mortgage, Taxes, insurance, PMI
My brother and fiancee pay the majority of monthly home payments - $1350 total
My monthly payments on home is - $127

I now have all my other debt taken care of and I can begin paying $4000-5000/mo on my mortgage... or I could save that extra income and invest it into a new property. Or I could pay off my mortgage enough to allow me to file for a cancellation of PMI before investing the rest.

My thoughts were that it would be safest/easiest to go ahead and pay off my current mortgage in the next 2-3 years and then I would buy a duplex/triplex and house hack, paying off the mortgage of the new property ASAP while renting my SFH. Rinse and repeat.. in 10 years I can retire living off the income of my rental properties.

Any thoughts on this strategy? It would eliminate the need to find those diamond deals.. I wont need to renovate anything, etc.. I am 32 now so I can still retire in my 40s. I know this strategy is not as quick as leveraging mortgages to purchase new real estate.. I am not gonna have 100s of properties.. but that could be a good thing as well, I dont have to manage a bunch of properties, only 5-10.

Please poke holes in these ideas :)

I recently had an issue with the basement flooding in a property of mine. I tore out all of the carpet that was in it. I fixed the issue which caused the basement to flood and verified through the last few rainfalls that it is no longer flooding. I am ready to put back in flooring but I am not sure if I should take this opportunity to go with Laminate instead of carpet? This is a rental property so the durability of laminate may be a good thing but I always found it appealing to have carpet in the basement (upstairs is hardwood). Any thoughts?

Benjamin,
In all those examples, you show a 3-5% down payment. Does that mean these were all purchased as primary residences with a conventional loans? Also, I notice none of the cash flow listings take into account expenses other than mortgage. You still have maintenance, capex, PMI with 5% conventional loans, etc.

@Matt R. I checked it vs rentometer which has rents as high as 1100 but this property was previously renting 1 side for 850.

@Kevin Ledding Thanks Kevin! I will have the tenant pay all utilities, yes. I am even planning on making the detached garage into a mini coin-laundromat for extra cash flow.
@Andrew B. I am pretty sure my number are accurate but I dont want to post the actual property address/listing.
@Dante Feria I have about 10k worth of repairs
@Daniel Bradley Yes this is a duplex. It was actually a SFH which a previous owner turned into a duplex.. Currently the thermostat/utilities all go under unit A but I am going to price out installing a new meter for unit B and getting them on a separate utility plan.. If I cant do that, I will pay all utilities and split it between the units. Also, yes, I am local. No property management.
@Nicholas Simeone Thanks for the info on your experience... I will look into the rental registration fee (didn't know that was a thing) and the sewer.
@Gregory DeRosso I actually estimate low on my rent. My rent I will try to get 550 for 1 unit and 950 for other.. 1350 is conservative. The unit is move-in ready at 85k but there are things that I want to update and finish ... I wouldn't live in it like it is although you could. I won't rent to someone else until the unit is looking how I would expect it to if I were to rent it. The bulk of that 10k will be to turn the deteched garage into a coin-laundromat and getting an electric meter installed for unit B and everything else that goes with that. 10k has not been quoted to me yet but I gave it a high estimate as well.

@Joe villeneuve 27000 is coming out of pocket. That is closing, down payment, and rehab. All the monthly expenses will be covered by rent.

Hello BP!
I am in the process of purchasing a home in Kansas City, KS. My math says that I will make over 500/mo in cash after all expenses are paid. Here is the problem... I am paying 85k for this home, the comps in the area show the top top end being around 85k and I still have to put maybe 10k worth of repairs into the property. After my closing costs, down payment, and renovations, I'll be into the property for about $27000, with a loan of $72250, and the market value on the home I expect still around 85-90k. It will be cash flowing but I wont be gaining equity. Any thoughts on this? Bad deal? I'll give you the financial breakdown below.

@Travis Clark Great Info, I will look into those websites.
@Thomas J. Clifford Thanks! I'll go look for it. :)