1) I know some people start small w regard to rental property investments but why couldn't this happen? Buy a property for $40k, rent it for at least $500/month, build up enough cash reserves, say 4-5k in an account for that particular house to cover major repairs, then turn around and do it again w another house of comparable value (build up cash reserves), until one has 4-5+ houses? Is this how people typically do well financially by owning real estate? Slow, steady additions to their portfolios of houses?
When taking on large debt make sure someone else is paying for it. Rental properties follow this rule very well because when you take on a mortgage, large debt, on a property and you put it up for rent and the people who are renting the property pay for the mortgage.. But don't base your numbers around tax cuts. Do your research and make sure when you take on a mortgage that you can come out positive income on the rental property every month and look at taxes cuts as a bonus. This is a golden rule for veteran investors in real estate because the tax reform act of 1987 caused a depression because people were relying on tax breaks and when the government changed the tax laws and eliminated those tax breaks those people who used them as a factor when making a deal now weren't getting that money. Therefore the structure of their deal and agreements fell apart. There is thousands of pages of tax code and more is added and taken away every year so simply just don't factor in tax cuts when putting the numbers in to figure income every month or if an investment is smart or not. Also when considering a deal if you do not come out positive every month pass on the deal. And base your information on facts not opinion when making a deal for example if someone says the property will be worth x amount of dollars in x amount of years your going off that persons opinion and not facts. Learn to tell the difference between the two early on. Some more advice when investing in real estate is to put the money down and get things into motion. I say this because when you finally put the money down you learn more than can be taught in a book, but also remember with learning come mistakes and don't be afraid to make them and don't let them stop you for reaching your goals. One last thing when investing in real estate just follow the game of monopoly and get 4 red houses and turn them into a hotel!
