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That's what my moms told me when I started my housing search...lol. Looking back, she was right. Back in 2007 everyone was looking to buy a condo in the South Loop or Bronzeville area of Chicago. At the time, I was in my second year of teaching making about $45,000/year and in no position buy condo. The mortgage, taxes, assessments, parking, etc would've hit me for like $1,600 month, and this doesn't include taxes, utilities and other costs associated with living in the down town area.
Instead, I opted to purchase 3 flat building in Chatham (located on Chicago's south side). This is when I feel in love with real estate. I purchased a 3600 sq foot building, unit's 1 and 2 were 3 bed / 2 bath. I stayed in the basement. I charged the first floor tenant $1,200 a month (free heat) and the second floor tenant $1,100/month (they paid their own heat)...$2,300 gross/month. The mortgage, taxes, utilities, and maintenance came out to approximately $3,100/month. I know what you're thinking, that's a net loss of $800/month?!? Technically no, $800 was my portion. I was only paying $800/month for a much bigger living space, which is a huge discount compared to condo living. I also had piece of mind knowing that my tenants were helping me pay the mortgage...it wasn't all on me!
In this scenario, and this is my opinion, the biggest win is that my tenants were adding money to my net worth! If you do the math, over a 10 year period they paid me a combined $276,000. This money was used for travel, new car, date nights, dinner, purchasing stocks etc. Ten years later, I refinanced, moved out and was able to net about $1,200/month!
For many, real estate is the biggest purchase that you'll ever make and it's also where most of a person's wealth is tied up. This begs the question, should my first home be a condo? Multi-family? Or Single family? Through a series of podcast interviews/testimonials, boot camps, forums, meetups, and more, our goal is to educate everyday people who on how to use REAL ESTATE to achieve financial freedom and leave legacy for their loved ones! If this resonates with you, Go Fish wants you to be a part of our growing village! Learn from the successes and failures of everyday people as well as industry professionals and seasoned vets. Topics include mindset, goal setting, sacrifice, negotiation, building a team, finding/analyzing a deal, financing, vetting tenants, exit strategies, tax benefits, scaling, and so much more! Follow us on social media @gofishvillage or email us with questions at gofishvillage@gmail.com. Multi-family boot camp coming soon! Need a realtor in the Chicagoland area? Contact joshuamercer.realestate@gmail.com or visit www.listwithmercer.com.