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Wheatie,

Thank you for your insightful reply. This gives me some things to think about.

I do realize that my current property is a bit of a drain. I think I am trying to convince myself otherwise so as not to feel the sting. Selling it in the local market I am does not feel like an option at this point though - I really think I have to tough this one property out until I can either:
- Pay down the loan enough to make the monthly cashflow positive
- Wait until the market goes back up, sell, take the profit and reinvest

Hello everyone. I will start off with some basics:

I work full time in the tech industry and make a decent income. I own a condo in California that I rent out. On a monthly basis, my cash flow from this property appears negative. After tax adjustments, I am just about breaking even on that property. If you factor in rising equity, it is profitable (that is questionable right now, I know). It was my first purchase - I definitely made mistakes, but I have learned from them and am most likely holding that property - at least for now. The current market in California is not something I feel like wrestling with for a sale at this time.

My interest is to invest in multi-unit rental properties. My goal is to generate enough monthly cash flow to quit my full time job and pursue personal business interests and additional real estate investments. I am reading several books on the topic and boning up on my necessary mathematics. I am 28 years old and single with no plans for marriage or children.

I do not own the house I currently live in. It is a rental. My reasoning for this at the time was that I wanted a nice large house with a swimming pool, room for my dogs, etc, and was not sure if I would be moving out of state soon. I pay the rent and all bills on my own - rent is $2250 a month and bills probably get the total closer to the $3,000 range.

I have become accustomed to the large house and amenities. However, I can't help but think of the extra $1,000 or so a month I could save by moving into an apartment or a less expensive property. I could use that money in this down market to make some great investments on additional rental properties and have a much more comfortable life in the long run.

My question to you all is this - how do you motivate yourself to be more forward thinking? That, or do you have any suggestions on how I can continue to live the style I am used to while still capitalizing on the great real estate prices out there now? I am very wary of any type of zero-down loans, so my plan would be to save up the necessary down payment and make one or two purchases a year, depending on the logistics.

That is also something to think about, thanks for the reply.

I wouldn't see it as losing $500 a month, I would see it as only paying $500 a month on a mortgage. Basically the tenents would be paying all the interest while I sunk money directly into equity. Does that make sense? The property value is rising, if only slowly.

I currently live in a small (1100 sq foot) 2 bedroom towhouse in the suburbs (Concord, CA). I purchased it a little over 2 years ago for $275,000 and it could sell right now for about $330,000 - $350,000. The market in my area (SF Bay) is down right now, it would have sold for more a year ago.

Here's my dilema. I want to move into a bigger place with a yard and a garage. Also, I feel like the $330 a month I pay in HOA fees is a bit excessive. I've thought of a few options:

1.) Keep the townhouse because selling it in this market would be sad. Rent it out for $1,500 a month (my mortgage plus HOA is $2,000), and go rent a house for $1,800 a month. I would be biting some cash each month but would get to hang on to the property

2.) Sell the townhouse. Use the money to roll into a house at approx $500,000. The payments would be tight, but I think I could swing it.

3.) Somehow, keep the townhouse - rent it out, and buy a house. I see people on my salary do it, but I honestly don't know how. I make about $90,000 a year right now and hope to be making a little over $100,000 in a year.

Any advice or suggestions? I'm 26 years old and really new to real estate and not quite sure where to go.

Thanks!

-Chris