This might end up being a ramble rather than a succinct question, but there you go.
The question I'm trying to ask is based on the fact I've just gone from having enough in the bank to cover my taxes and such, to having an extra house that should do quite well in the long run (touch wood) and a balance on a line of credit.
It's small beer - the house was $30k, the rehabbing work being done to make it nice for tenants is about another $5k including appliances.
Wonderfully, the line of credit (unsecured) is at 3% for the next few months, then returning to its normal rate of about 6%.
So - I'm in debt to the tune of $30k, after spending 2 years paying off a mortgage on another house I own. I now have an asset that should pay me nicely. I'd do it again. I'm just wondering where the line is - how much risk?
My wife has friends who are serial house purchasers - they buy, live in for a while, and convert to rent to students, making a very nice return on investment. They are probably in mortgage debt to the tune of $1m.
I'm guessing people who become rich are the ones who, in my position, would borrow more (the bank will almost certainly lend us more next year when I have enough years of self employed income). Either a second house bought with a mortgage, or with a line of credit secured against the house we live in.
I don't *need* to do any more. I can stick to the plan of paying off this LOC over the next 15-20 years, giving myself a small monthly income bump from this house I bought once it's rented. I am far, far, far from rich, but I think I have pretty much enough.
I hate debt, though, so even while looking at the numbers and the 15 year plan, I'm also going, nope, don't like this debt, I want to kill it. At the moment I'm still doing a few days self employed stuff a month for a friend which is nice, and I can (and will) throw any extra money at the LOC just because I know I'll get ~6% on it. But if I can buy another house in a few months and get 10%...
If it is generally unwise to borrow to invest in the stock market, is it also unwise to do it in real estate? Clearly not (or, rather, clearly it's possible to make *really* bad decisions, but if you've done your research...).
Next year I'm going to be SAHD, on my own from July or August time when my wife will go back to work. I don't know if I'll still be self employed then - I'm assuming not, the stuff I do is generally winding down, and while there may be a few $k next year I'm not banking on it.
Any thoughts, words of wisdom? Ideas on how to become a millionaire without a job/while being SAHD? (I guess that's a bit far off the topic).