All Forum Posts by: Chase Spitzer

Property 1&2 combined.

9000 yearly gross 1850 ins/taxes = 7150 net

Property 3

9000 yearly gross 3876 pymt/tax/ins = 5124 (30yr mortgage so I pay more)

So troy it seems you are saying to wait until I have another large down payment and purchase another "nice propery" instead of buying one cheap one now and another cheap one in 6-8 months?

The "city" is Decatur Illinois. It is my home town of only around 100k people. I can get to all three of my rentals in about 10 minutes from home.

So when I say it is an area I wouldn't live in, it just means it is not as nice or peaceful as I am accustomed to. Not necessarily that it is dangerous or has a lot of crime and so forth.

The advice of buying closer to them still seems smart. I have a point of the town where I will not go father south than. It is either bad neighborhoods, or 20+ minute drive.

I am very lucky to be investing in an area I know very well, also when I am out of town my Father who used to own rentals actively handles any issues. His failure came from a nasty divorce in addition to being bad with money in general.

Thank you for the replies. It seems netting $200 a month off of a $7500 dollar investment may be smarter than $400 on $15000 if it means doing it 6 months sooner and the ability to purchase another in 6-8 months. Just the long term of asset is not as great.

I must mention I am going back to school next year and IF needed would like to be able to use some of the income to help me get by. I currently put everything I make back into savings for repairs and reinvestment.

I am 25 with 3 rentals and a home my father lives in.

My first two rentals are kind of "slummy" not a part of town I would live in, but not great.

Property #1 - I paid 12k for one and it rents for 300 (paid cash)

Property #2 - I paid 18k for another and it rents for 450. ( paid cash)

A family friend was helping me get in the business by selling me these two properties. I then rolled all that income and my own savings and put 25% down on a "nicer" home in much much nicer area.

Property #3 - I paid 54k it rents for $750

For what I make at my day job and these other properties it will take me another 7-9 months to save up the 15K needed for another down payment on a 55-60k house. I like having the nicer property and gaining equity, but the cash flow is not as good.

So do I buy more 30k houses that rent in the $550 range? This will increase immediate cash flow, minimize down payment, and allow me to acquire a couple more homes. Obviously more to manage, more turnover, not as good of an asset. I could easily afford the down payment on another cheap house immediately and start generating income.

Anyone else been in this position starting out?

I live in a small town called Decatur, IL with about 100k people.

I am 25 and bought my first two properties with cash I had saved since I was 17. I bought two small two bedroom homes from a long time family friend to get started at the end of 2012.

I also own a property my dad lives in. It was his house but its in my name and will be mine when he passes.

I now saved up enough to buy another home in a better part of town. I am putting 25% down on a small 3 bedroom in a great location. The tough part is my work is seasonal and I get paid through payroll companies. So it looks like I have had 6-7 different employers over the last 2 years. I have finally found a couple banks that do everything in house and are willing to work with me.

I really hope to learn about what to keep track of and do for tax purposes and whether or not I should do an LLC. How these things will help or hurt financially and with purchasing more property down the road. This will be my first mortgage I take out.

To give you an idea is a nice little house in a good area and its a little under 60k. Expecting 750 a month rent.

Thank you and I look forward to learning.

Chase