Buy a house to rent out

I now have a house I purchased in Indianapolis, too. In the process of getting rehabbed now, and then will be for rent. I did it! Now I have offers in for 2 more houses. I want to get the first one actually rented, and then be able to get it financed, pulling my purchase price and rehabbing costs back out, plus a little extra.

I have 3 roommates in my house, and it’s working well. I love living here. I couldn’t get quite as much for rent as I thought, and am paying $500 for my part of the mortgage, but I have a lovely house to live in.

Next Wednesday my almost new, 2-story, 4-bedroom house will close. From looking at rents on Craigs list, I figure my part of the mortgage payment will be about $200 per month. The outside needs minimum a fence and yard put in, but the inside is move in ready. I’ve decided to sell my mom’s modest house and use the money as sizeable down payments on three different 2 or 3 bedroom houses. I may get a little less cash flow from rents for a few years, but in a short while I will be doing better. I will have three houses to be appreciating and three different groups to be renting to.

From my mom’s death I got my first rental house. Now I am looking for a house for me and some roommates. Then my goal is to get another rental house in 2008. It’s been fun looking for my house.

I can get a lower interest rate loan if I live in the place… so, my new plan. I’ve talked to a mortgage person, and I think I can get the most bang for my buck right now if I buy a 4 bedroom house, and find 3 room mates. That way the mortgage is almost all paid every month. Or, if I have to pay some, I can. I really only need 2 room mates and I will be okay.

Also, from reading about real estate, apparently there is a way to put IRA money into a special trust account, then buy a house with it. It still is “IRA” money. I want to find out more on this.

I’m on my third real estate book, have found 2 houses that both look good, and have been approved for a loan (even with the sub prime problems, and my “unique” situation and low income. One of the houses has 3 bedrooms and a full basement that could be converted into an apartment, or just a room for now.

This sounds like a definate way to prepare for future income. I met with a realtor who said Portland (where I live) is predicted to have 3 times the population in 25 years. Prices are already sooo high. But I have a goal to buy one small, two bedroom house and rent it out. Then in a couple of years (or less if possible) buy another one. I don’t want to stretch myself too thin financially, but I don’t want to simply wait forever, either.