Be very careful when you agree on the amount of the mortgage payments. In my opinion investment properties that have combined mortgage payments higher than 50 to 60% of the scheduled income are a bit too risky, unless of course, you have adequate back-up resources to pay for negative cash flow.
I’m always satisfied when my mortgaged properties earn me a small positive cash profit consistently every month. Little profits allow me to buy more properties, which in turn provide additional little profits! First thing you know, little profits add up to big bucks. Always insist on long-term paybacks. The longer the better, but nothing less than 10 or 15 years.
Walt Disney was delighted to draw the first cartoons that moved on a big theater screen. He was paid just $12 apiece for each one, but he kept drawing lots of them, over and over again. Needless to say, his $12 drawings don’t sound like much profit, but when you consistently keep small profits rolling in, they begin to add up to big profits. Using baseball analogies… go for the base hits. Swing for a home run is too much risk!