All Forum Posts by: Jason Schmidt

I have been thinking about taking a while to purchase some smaller homes at $100k-125k, pay them off early and keep buying others just like that.

Then I got to thinking - if homes average 6% increases, then a 300,000 * 6% per year certainly would be a lot better than 100k * 6% a year. Even 3 homes @ 100k may not be as good because if you rent them, you would have to deal with 3 tenant families.

What is considered the wisest move here?

Finally, when selling (say I live in that 300k house for 3 years, and end up having 60k equity in it) the LAST thing I want to do is pay 6% ($300k + $60k appreciation * .06 = $21,600) to a realtor! That would take a MASSIVE chunk out of my profits. How are you all doing it? Or is my understanding of this whole thing waaaay off?

I am starting to wonder about this - if I were to pick up a $125k piece of property, say, this month, is there anyway to go $0 out of pocket? Or is there always going to be something that costs me? Such as $5k for inspection, other closing costs, etc. ??

very interesting idea - not that I have the money to do that, but how do i find these deals? where to look? how to determine if they are good deals or not??

Mike, thanks for your answers - I must sound like a fish out of water here :)

Wow, 50%? So how on earth do people make it? How could there ever be a positive cash flow on rentals? For example - if someone rents the house that I am paying off now for $1300 a month ($400 going to taxes, $900 going to me) that means I can expect to only bring in about $450 a month or something for it?

I am 28 years old and have been paying $2350 on top of our $1200 monthly payment on our 120k house (taxes are about 400 a month here) @ 6%.

I was wondering what would happen if i paid it off, but then continued to buy one house at a time as it is paid off too. I figured it would look like this:

after I pay off my house, I can put $1200 + $2350 (like I do now) + $900 (assuming that is what my house would rent for after taxes) = $4350 a month on a house of the same price. After 3 years, I would outright own this, and could put approximately $1100 a month after taxes with what I was paying already, for my next - $1200 + $2350 + $900 + $1100. This would pay off the 3rd in a little over 2 years ....

Doing this about 6 times would give me a small handful of properties I would own free and clear over the course of about 10 years. The cashflow could probably be about $6000 a month or so.

Is this a good plan? Could I then retire at that point??? How would you do it?

I just heard some dude on here bought like 22 properties last year alone. How on earth do you all do this? That is a TON of tenants to take care of, yeah?? In addition, doesn't it scare you when each one brings in only $100 a month each or so, and there are 22 possibilities of pipes, a/c's and roofs being broken?

what do you recommend doing? How would you do it differently? My newbie plan surely leaves a lot to be desired :)

wow - 20-40 properties to manage sounds like an aweful pain in the rear. I *think* what I am going to do is try and finish paying off my house in 1 1/2 to 2 years, then buy another to live while renting this one out and leapfrog like that for a while. Ultimately, I think if I can get just a core group of 5 house and have them all paid off in 10-15 years, that would leave me at between 40 and 45 years old, with a cashflow of around $5,000 a month if they are all paid off.

If this is a poor idea, let me have it! :)

great reply - thanks again!

keep em coming, folks!