Snowballing Rental Properties

[Jesse Moore]

I am very interested in beginning my real estate investing career.  I have been following bigger pockets and reading about RE investing for close to 2 years and seem to be stuck in analysis paralysis.

Here is a little about me:

Just turned 30 y/o.

W2 job grosses ~130k, and currently maxing out 401k pre tax contribution

Currently renting and in the process of buying a short sale for my primary residence.

Have a truck that I owe ~24k and student loan ~8k

~17k in savings, with the ability to save atleast $2,500 a month.

I really like to idea of saving up and buying a multi-family in cash and repeating until I reach my goal (enough to retire).  The projections with this plan have me meeting my goal in about 13-15 years.  Has anyone done this before and could give me some advice?

With the financial number I have, does anyone have opinions on other ways to invest?  I get nervous when I think about leveraging properties, which is why I like the cash snowball plan.

[Andrew Johnson]

Jesse Moore Right now you still have a mortgage interest deduction. As far as I know, CT isn't exactly a low-tax state. At $130K salary you're likely at a decently high marginal tax bracket. Net result: you don't want any additional *taxable* income. You can balance out that taxable income with depreciation and mortgage interest. That doesn't mean --- by the way --- that you have to do a 75/25 LTV mortgage. You can get a 50/50 mortgage to lower your payment and still have a comfortable cash-flow. So there's likely a middle ground there.

*** What you don't want to do is take your cash-snowball-plan and end up paying a lot of that cash to the government! ***