Sorry for the late response:
Thanks for all your responses. Everybody gave good knowledge and new input that helped clear out a lot of my questions.
Some more information. My current (1st and only prop so far) cost 255k. 3-unit. $2900 monthly rent. With $2100 (15yr loan) monthly mortage payment and maintance/operations it usually evens out. So no cash flow here.
My salary stated is an average of the last 2 years and the next. After that it should be around 90k going forward.
My goal like I said is getting to 100K rental income, the sooner the better :-) I would love to be able to do it before 40. Im 25 now......As far as risk I am really not too much of a risk taker but in this case I am willing to and like someone said I still plenty of time, so I rather make a mistake now so I can learn while Im making a decent salary.
When you guys mention trapped equity you mean as a potential source of a loan that is not used?
Otherwise if a rental property is paid off free and clear and is bringing rental income, I dont see how it would be trapped equity if its providing a stream of income?
This year so far I've paid about 8k interest and I understand its from the rent income but if I paid the debt off that money would come to me not to the bank. BUT I now have a better understanding of how this works. That is basically the price to pay for LEVERAGE which is better than trying to first pay off a house before moving to the next because I get a better ROI, tax shields, I get better interest rates on loans now than what I would get in the future, would get to my goal faster,etc. This is definetly intriguing and I will do a lot more reading on this, but I will be going this route.
@Rich Weese. You made a point "10. I don't care whether your personal residence is F&C or not-as long as you have SOMETHING F&C and safe from all litigation "
So you are suggesting that its a good idea to have at least on F&C property?? Im from Chicago, and I know of some houses in 40k, 50k like @ Steven mentioned.
