Own Investment Real Estate

“I could not relate more to this post. I purchased my first three family in 2019 and appreciation has treated me well along with a low interest rate. Appreciation and principal pay down alone have been 5 fold versus if I were to invest in the S&P500 on just the first property itself. I recently purchased another three family this past fall and it has been an uphill battle; low rents and long term tenants with large expenditure items that have come up since the purchase. The property breaks even at baseline due to the low rents (in the process of raising closer to market) and I have been using the cash flow from the other property to pay for such expenses. This is a natural process although the headaches I have experienced have had me questioning whether the stock market would've been the right choice. This business is a long game and the new property will eventually get up to par and produce a more positive cash flow, appreciation will follow down the road. I took out a HELOC on the first rental property as a safety net (have yet to draw anything from it) in case any larger expenses or other unforeseen major expenses came about, though I am usually diligent to set aside money to pay for these expenses. While I didn’t need the HELOC it will never hurt as there was a low cost to open and no maintenance cost to keep it open; it offers a piece of mind. The easy route would’ve been to invest in the stock market rather than purchase the second property but I know my area well and foresee a better real estate return albeit the headaches that come with it.”

“I had nightmare tenants and property my first 18 months. I had to learn and adapt. My mistakes were solved through capex and implementing standard policies. That property wasn’t in the black until a few years after purchase.”