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Our Next Step to Achieving Financial Independence: Purchasing Our 1st Rental Property with Cash

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Two years ago today, I published my very first blog post titled We are Paying Off Our Mortgage in Two Years. This is How. This bluntly titled post is pretty cringe-worthy for me to look back on. It holds no introductions and no background information about my husband and me because, in the beginning, this blog was just a way for me to document our unique (or so I thought at the time) journey of paying off our mortgage.

I set up my Instagram account shortly after as a way for anyone else with this uncommon goal to find me so that we could inspire one another. I remember the feeling of astonishment as someone commented on a post saying that she had read my blog post and was now inspired to start paying off her own home early. She has liked almost every one of my IG posts since, and every time I see her name, I think of that feeling.

That feeling, that indescribable moment of knowing you have inspired someone else to better their own financial situation, has led to the 90 blog posts, over 500 Instagram posts, and countless comments and messages that have provided me with such a sense of fulfillment and purpose since the initial post that announced we were paying off our mortgage. It led me to branch out from my original idea of only posting one update at the end of each month to keep track of how much mortgage principal we were able to pay off. It led to me finding friends who would later become the debt free community, which led to me finding the bloggers and podcasters of the FI/RE movement, which led me to make it a point to live on less than half of our income, which is enabling us to start a new goal today.

Saving $100,000 to purchase our first rental property in cash in two years.

Why $100,000?

My husband and I live in a rural area of east Tennessee where houses are inexpensive. The purchase price of our own home – our 2600 square foot, four bedroom, 1 and 1/2 bathroom home on one acre – was $100,000. We shouldn’t have an issue covering all of the costs involved, but if we find when the time comes that we need more money, we’ll just save more money.

Why two years?

On this day last year, we had paid off $51,107.45 in mortgage principal alone in 12 months. You can view that one-year anniversary post here. We are now earning higher incomes, living on a lower amount and have zero debt, so we’ll be able to meet (and possibly beat) our two-year timeline for our next goal.

Why real estate?

I’m a control freak, so I would much rather be responsible for putting in the work to make the decisions and choices involved with the investment than leaving it up to people in an office somewhere that I’ll never meet. I like the idea of owning cash-flowing assets, and since we live on such a low amount, it won’t take a huge portfolio to allow us to leave our jobs before we’re too old to really enjoy our freedom.

Why purchase with cash?

For safety. This was especially important to my husband. I was initially open to the idea of using leverage, but this was mainly because I was just feeling impatient to get started. We’ve been completely debt free for seven months now, and even if my husband had agreed to let us finance the property, I probably would wimp out. I just absolutely love not having any debt. We may be open to the idea down the road after we get our feet wet with the first purchase, but we’ll just have to see when we get there.

We are leaning toward a 3BR/2BA single family home or a 2BR/2BA with a floor plan and square footage that would allow us to add a third bedroom. We’re open to a duplex too, but we will most likely keep that for further down the line when we have more of an idea of what we’re doing.

We plan to purchase a property in our local area, and with my husband being a narcotics investigator, we will easily avoid shady roads and tenants.

The contractor who worked on a few rooms in our house the last several months has already expressed that he hopes we’ll have him do whatever work needs to be done, and he will walk with us through potential houses when the time comes.

We have no elaborate strategy in place at this time. We have a lot to learn and plenty of time to do it. We’ll play and run the numbers along the way while I continue to listen to podcasts and read all the REI books I can. We’ll make a lot of mistakes when the time comes, and we’ll learn from them.

And when we start earning rent each month, we’ll continue the snowball method we learned from Dave Ramsey by putting it with our savings for our next property, allowing us to save faster with each purchase.

Check back soon or subscribe so that you can watch our progress as we save for this goal, and be sure to follow me on Instagram where I post almost every day.

If there are any blogs, podcasts, or Instagram accounts you think I should be following while we work toward the purchase of our first property, please send them my way!

As always, thank you guys so much for your constant support!

It's been seven months since we paid off our mortgage. After catching up on some home improvements, we're starting our next major goal - purchasing our first rental property in cash.

It's been seven months since my husband and I paid off our mortgage, and we are now taking our next step in our pursuit of financial independence - purchasing our first rental property with cash!

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5 Comments

  1. Haleigh Collins says:

    Hi! Have you done a post on the updates to your house? Your insta pic with your loving room looks really cute. Would love to see how a frugal lady chooses what updates are worth the expense! Really enjoying your posts.

  2. Gabriela Michel says:

    You should search biggerpockets.com They have a podcast, a lot of information and a forum all based on Real Estate Investing 🙂

  3. This is so inspiring! I would love to have my mortgage paid off and get started with investment properties, love to see a young couple succeeding!

    Megan
    http://www.todayisthedaylifestyle.com/blog

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