Low Risk Option
If you'd rather not take risks with money then it would be smart to pay down your mortgage until it's gone. Perhaps, then, when you've paid off your mortgage safely, over 15 years instead of 30 years, you can start to consider buying a second property. With only one mortgage at a time it eliminates the risk of not getting a tenant for 6 months, trying to afford 2 mortgages, and going broke. Likewise, someone might have the risk tolerance to quit their day job to start a business, but other's may want a big savings first. It's all about your risk level, there's no "right" or "wrong" answer.
High Risk Option
LEVERAGE! Only put 20% down on each property, less if possible. Most people can buy their first home with about 3.5% down, their second home with 5% down (owner occupied) and subsequent homes will require about 20%. That means you'll need to somehow save a 20% down payment for each home you buy. There are some creative ways to take over mortgages and owner-finance properties, but it's minimal in the real world. As you pay down your current mortgage, get a home equity loan for as much as you can, then reinvest it into a down payment for another property.
Ways to leverage money
- Home equity loan *low interest rate
- Refinance your car loan (get more money) *low interest rate
- Personal loan *high interest rate
- Max out credit card *high interest rate
- Ask your parents **Use an interest rate above a CD but below a mortgage
- Create a cryptocurrency token and raise the money for each home! :-) **No interest rate
Chris Bell
https://chrisbell.com/real-estate.php