real estate. He got started by refinancing his home for $205,000 in February 2004 (it appraised for $257,000) and putting some of the proceeds toward the three-family house he purchased for $175,000 in the neighborhood in which he grew up. He rents two of the three units for $950 a month each and hopes to get market rate (roughly $900 to $1,000) for the third apartment, which has three bedrooms.
Rufus is looking for additional properties he can purchase and rent out in East Orange, New Jersey, and other areas. He also hopes to take advantage of the state’s government-subsidized Section 8 program, which allows tenants to rent apartments below market rate and pays a subsidy to the landlord to make up the difference. Rufus says that if he can make $2,000 to $2,500 a month from his properties, after paying the mortgages, he will reinvest one-fourth of that amount each month. That will help him continue to build cash reserves and retirement savings well into the future. He’s optimistic he can become financially independent within 10 years. Salter admires his ambition: “Now that Rufus is going through the financial planning process, he’s asking questions he’s never asked before. Now he knows what to look for.”