Would you recommend this as a first RE purchase?
 

Say there is a triplex $400,000

You buy it with 10% down, finance it for 25 years lets say
so you put $40,000 down and you have a $360,000 mortgage for 25 years

you rent it out, and you are pocketing 500$ every month after taxes and mortgage. With not much hope of great appreciation.

does that sound like a reasonable deal for getting your feet wet in the RE market?

Buy yourself a pink RV. I could see you driving that.

I'll stick to my M3 thanks :thumbsup

Depends, a lot on the area. You have to make sure you are buying in an area that the values are not just going to drop out on you, If possible put down %20 and you will have lower payments each month. There are so many variables that it's hard to really tell you what to do. For instance, you think you will make $500 a month but with things life the roof, water heater, heating systems. There are a lot of things that will eat into that profit. Just make sure you do all the homework you can on the place you want to buy.

sure why not...you are basically making $6k a year on $40k basically 15% and then you will eventually payoff the sucker and have that money plus the appreciation, which should be between 5 and 10 % a year. Plus you have to remeber rents go up too!
If the deal is easy to get into I would be on it! ;)

Don't forget there is maintenance, garbage disposal, water/sewer bill, tenants not paying, mowing the lawn, etc...

You will make way more buying cheap property in the 50-60K range than you will off that.

Imagine buying 6 properties for 60K each and making $400 a month off each? Probably easier to sell them too.

I think you will find that most realestate people don't buy expensive stuff looking to rent it. Just my :2 cents:

Yes that is a great starter deal. Will you make $500/month? Nope. Will you make great cash over the long haul? Yep. You are in Canada. I thought they had shorter term loans then that. Hit me on icq if you want some help.

how did u come up with $500/month?

you think you would have positive cash flow with 10% dp?

hmmmm.

ok, it might be a good investment, but:

1. check the area's political climate, if there is any chance of rent control you might have trouble.
2. check local vacancy figures, if they are under 2% you might have a chance.
3. check population migration data, you need a growing area with steady population increase.
4. check avail land and builder activity---scarcer buildable lots are better for you.
5. check demographics, is the area mostly white or asian, that is good for values---if blacks are migrating into the area this will lower values, if hispanics are moving into area this will flatten values.
6. check if current tenants have long term leases. you don't want that.
7. check if tenancies are seasonal. you want long-term mature tenants, not college kids.
8. check if the law allows you to rent to adults only (exclude kids), if so you will have greater ROI.

good luck.

all true.