2/10/15 Wednesday
Day 3. Today, I did some research into the advantages of leveraging. I currently have about $50k in equity on my primary residence. I have read several articles that state that you should try and use as little of your own capital as possible. With the simple calculations that I did, it seems more advantageous from a cash flow perspective to use your own capital as a down payment. I still have some homework to do though.
My current plan is to buy enough rental properties to replace my current income of $90k a year. When I do that, I will quit my job. Simple calculations to accomplish this include the following:
I figure I can collect $1500 a month for rent. I estimate monthly expenses (including mortgage) to be $1000. $90k/12 is $7500/month. $7500/500 = 15. So I will need 15 houses to replace my current income. My goal will be to buy 2 houses a year minimum. That makes this a 7 year plan. Then, as the mortgages are paid off, that's more monthly cash flow for me. This is an evolving plan, and something for me to look back on in the future and see how my plan has evolved.
I also continued reading 2 Years to a Million in Real Estate.
Still waiting on responses for pre-approval from the bankers.
Please check out my website for my other side business/hobby. www.yrlenterprises.com and at facebook.com/yrlenterprises.
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