Looking to get started on accumulating rental properties-looking for advice

[Michael Wang]

Hello everyone, new to BP here, but have been reading here for a while. I'll first introduce myself. I am 36 years old, my wife is 38. We both work full time, no kids yet, and live in NV. With our income, we are able to live solely on one of our incomes, and save approx 80k a year. Here is my plan...please tell me if you see any certain flaws in my logic..haha...

A year ago we made the decision, to take 36k that we had saved up and buy a small bank owned condo and use it as a rental. I figured out that the going rent for these units in this area are around 600/month. With taxes/maintenance figured in there, we figure it to give us ROI in 10 years give or take. Then after that it's all passive income. Ok so after it's paid off, it will give us approx 5k a year. It's now just a year after buying it, and I've made 11% of my investment back. I figure it should be the same each year.

Using the same logic, we are wondering if we can every 2 years, save 160k or so...and look for good deals like the condo, except we get single family homes instead, cash. I figure I'd like to stop working around 60(or when medicare kicks in if it's still around). That's 24 years. We can possibly be up to 12 houses by then. More if we use some of our home income to buy more homes.

Homes today around here in that price range bring in around 1400/month rent today. using today's rent, 10 homes should bring in 168000 a year in today's money. appreciation should gross more 20 years from now I assume, market depending(once we have accumulated 10 or more).

Also, we both will have life insurance, so any kind of a disaster(I hope not of course) could be taken care of with this life insurance.

So my question is, is my logic sound? Is there anything big I am not thinking of? I worry also about homes neighborhoods possibly declining as well. I figure I can just keep watch on trends for them as time passes. if I don't like where a neighborhood is going, I can always sell the home in that bad area and put that money into a different one.

Would you guys buy all homes in various parts of one city? or maybe half in one, half in another? or more? ust in case one city faces hard times that makes it difficult to rent? Not sure how investors account for these market swings as well.

thanks, I know this is a lot, I just had to get my questions out there :)

[Al Williamson]

Hey welcome Michael Wang. You've received some excellent advice already. My two points are:
1 - the future is not linear, it's more of a windy road. You just can't see too far ahead. Best to actively create your future investing conditions
2 - you can do more than just watch for signs of neighborhood decline. Consider investing your leadership as well as money into the communities you buy into. There are obligations and responsibilities that go with property rights.

That being said, your investment outline seems like a good general guide. We'll cheer you along all the way.