Rental Property Investor · Birmingham, AL · Member since 2019 · 3 posts · 1 vote
Newbie here on BP and in real estate investing. Just wanted to share my plan to the BP community to get their opinions and advice.
1st I am a 30 year old engineer in Birmingham, Al. I want to start REI with renting C+/B- SFH in the Birmingham area. I intend to buy the first property either late this year or early next year through traditional financing through a bank with 25% down. Since I don't need the cash flow now, I want majority of the cash flow to go towards paying down the loan while saving for potential repairs. After 2-3years take the equity out of that property and buy my next two. The end goal is 5 SFH.
Once most of the loans are paid, use the equity of those 5 properties to buy my first multi family. Again use most of the cash flow from all properties to now pay off the multi family home. Then buy another and another.
I plan to do all this over the course of the next 20 years then retire from my engineering job.
I would love for all you experts to weigh in with your opinions and advice!
New Rochelle, NY · Member since 2018 · 235 posts · 151 votes
7y
Welcome to BP, sounds like you have a solid plan. Just educate yourself for the time being and analysis of plenty of properties up until you are ready to purchase. Also go to local real estate meetups and speak to people that are investing in the same space you would like to invest in. Good luck!!!
Birmingham, AL · Member since 2014 · 875 posts · 947 votes
7y
@Brandon Marshall welcome to BP! Always happy to have another Bham native on the site! I love your plan - especially your long-term thinking with regard to loan pay down. If you don't need the income now, the best thing you can do is plow it all back into the loan. The amount you can save on interest over time doing this can be extremely powerful (of course, doing this with a portfolio of 5+ cash flow props will make the process go faster and save you more than with one prop, but the principle is the same). When you make extra payments, make sure to specify that they be applied to your principle. You may not need to do this, but sometimes lenders apply extra payments to future interest charges and it's just better to be safe than sorry.
You'll find plenty of friendly, knowledgeable people willing to respond to your posts. A lot of forum members are experts in their respective fields related to real estate investing, whether that is real estate sales, wholesaling, flipping, buy and hold investing, lending, self-directed IRA and Solo 401k investing, or tax and legal guidance.
There are some pretty nice discounts on many products and services offered as Perks to BP members that you might want to check out: https://www.biggerpockets.com/perks/pro
The site has quite a few tools that can be helpful for new members. For example, if you are looking to connect with other members near you, want to learn from people in a specific area you’d like to invest in, or have a desire to find people interested in certain topics, you could use the search feature here: https://www.biggerpockets.com/search/users