Myself and my fiancé will be purchasing our first property (a rental) soon, and I have created an investment plan but before we start pushing on with it I want some advice. Ultimately my goal is to use the first rental property to provide us a place to live that will allow us to gain some leverage on the mortgage and some equity. Our next step will be to use the equity in the rental property to pick up “simple” flips. At the moment we have very busy life so we will be focusing mostly on properties that need very little work, like paint and tiling.
With the money we make on the flip we will pay back down the mortgage and then purchase a second rental property. This rental property will be all rented out and put more towards its mortgage. We will continue to repeat this process over time being able to flip more complex profitable properties, and slowly acquire more and more rentals. Once the investing starts to gain traction the goal is to draw income from the rentals, while using equity as a base to purchase flip properties.
My goal will be to own at least 5 2-4 unit homes within 5 years, and the questions I have are:
-How has this worked for others?
-What specifically should we look for in properties?
-At what pace should we look to obtain these properties?
-Any other questions I have forgotten to ask but people can think to answer would be appreciated!
Sincerely, Seth
Where are you? You want a growth market to do the "simple flips" I reckon, or costs and risks outweight gains.
Also you will need to be extremely selective in your properties to be able to "draw income" from them without a large deposit. You may have difficulty finding such properties in capital cities.
Do plenty of research on vacancy rates and population growth rates in your target area, and do your sums very carefully. It's very easy to buy a moneypit that sucks up your spare cash and prevents you buying anything else.
Negativity aside your concept may work if you put enough time aside to do the research on your purchases and the improvements.
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