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Posted: 2/19/2017 1:27:29 AM EDT
[#1]
Quote HistoryQuoted:
I don't even see a point if you manage them like that. It is a decent tax shelter but i'd just as soon buy mutual funds and forget it. I'm sure there might be one but i've never seen a market where you can pay cash and come out ahead vs just putting the money in a mutual fund. I guess I could see it if you were older and wanted to do it as a way to avoid taxes and have enough monthly money to live on without market fluctuations like a mutual fund. I don't care how much you earn, how much you have. Want to scale and make money, vacancy will bankrupt you. Period. Everything has a cost. I make a lot of money and I can't float a business model like that nor would I want to. Maybe my post was misleading. We have 3 rentals. First was bought 9 years ago, second 4 years ago, and third last year. For all three houses combined we have had a total of 6 months they have sat vacant. I try to keep them rented but I was just saying I am not in a bind to do so and won't rush into throwing a subpar tenant into one. My only hard costs if one is empty is the prorated property taxes and insurance which amounts to maybe $300 per month. It is no biggie. Now if I had 10 houses empty for a year maybe it would be a problem but a little here and there is not. We do invest heavily in the stock market and use the houses as diversification. Aside from the rents collected the growth in value of the houses is very interesting. My parents bought their house and kept it 15 years. They did not do anything really to improve it just kept it up. They sold it for double what they paid for it. I am not saying that is the norm but typically you have the growth in value of the property to figure into the equation as well. For example the house we bought 9 years ago we have collected nearly twice as much in rent as we paid for the place and we could sell it today for significantly more than we paid for it. |
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Posted: 2/19/2017 1:47:07 AM EDT
[#2]
Appreciation is cool and all, but most people don't buy houses as investments, they only think they do.
If you buy a house for $100,000 and you maintain it to the cost of 1% per year you'll be into the house for $110,000. Assume that it increases by the average 5.4%. That means the house will be worth about $169,000 after ten years. But then I have to pay closing costs, which, where I live, cost 9%. So I am actually receiving $154,000. When I calculate that I've got an IRR of 4%. That isn't an investment. Its a rental with risk. Now if I can buy that house on credit for 5% I can capture the appreciation without having to put money on the line. ETA: Rentals work because someone else pays for the place. |
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Posted: 2/19/2017 2:56:28 PM EDT
[#3]
Quote HistoryQuoted:
If your net ROI on a rental is ~35% , 3 months of vacancy (And I know people that budget for it) knocks you down to 26.25% cash ROI. Have someone do all the work for you, and I think alot of people would settle for +25% on a return. Not saying that's what he gets, but some people have insane numbers. Take for instance property #3 in that video. I got it for $69k and put $3k in it. It brings in $1,550/mo of income, I have almost no vacancy to it, only had 1.5 months worth of total vacancy in 3 years while we spent time rehabbing 2 units after move-outs. My cost basis is about 25% of gross rents, debt service since it's actually leveraged ends up at me getting around $800/mo after it's all said and done and I've met my internal rehab escrow for the month. Now, pre-debt income is in the neighborhood of $1200/mo ($400 in debt per month) - $1,200 * 12mo = $14,400 / $72k invested = 20% net ROI in my pocket each month, add on the fact I refinanced it at around $60k, and my ROI is actually $9,600 cash return on the remaining $12,000 I put into the effective down payment + rehab, that's a 90% ROI. Now, is 90% crazy? Yes. Now consider this - The guy I got it off of, who gave up on being a landlord bought this exact same 3 unit deal back in 2009 after it was foreclosed on for $32,000. He put MAYBE $15k in it at best. If he had my business model, that would put him at $14.4k cash return on only $47k invested, 30.6% cash return on a property in a very solid neighborhood with good growth. And the thing is, going back on a historical search on the MLS from 2009-2012, there's easily 100 properties in my local neighborhood that sold that would have made awesome numbers too. I've heard those claims before. At best, they are rare. At worst, they are "creative". For some reason, it's always the guys that need investors that supposedly make these returns. I have some family partners but i'm majority owner. If I was in an area that made those returns I would have bought out my partners and started my takeover of the entire planet by now. I'd own thousands of properties and wipe my ass with stacks of 100s. More power to you if you are in area that can produce that. But it's rare. My area you can do around 14% return on cash using leverage. It's good for me but we don't print money. |
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Posted: 2/20/2017 11:29:59 AM EDT
[#4]
Quote HistoryQuoted:
I've heard those claims before. At best, they are rare. At worst, they are "creative". For some reason, it's always the guys that need investors that supposedly make these returns. I have some family partners but i'm majority owner. If I was in an area that made those returns I would have bought out my partners and started my takeover of the entire planet by now. I'd own thousands of properties and wipe my ass with stacks of 100s. More power to you if you are in area that can produce that. But it's rare. My area you can do around 14% return on cash using leverage. It's good for me but we don't print money. All I can speak from is my own experience, but banks tend to absolutely hate these kinds of rentals, the stuff that's purchased below about $50k-$60k locally. Granted I understand where they're coming from - Tenants tend to trash houses way more often than nicer rentals, so you've got cash-strapped people buying rentals and they leverage themselves out as much as they possibly can. Then the 'normal landlord stuff' happens - Tenants trash it, house gets a drug raid, roof has giant hole and requires the whole thing to be re-done ,etc. So instead of spending the money on it, it goes vacant for 3-4 months while they try and save cash up to fix it, all the while the mortgage + insurance + taxes eat them away. Eventually the bank takes it back, and it was already a dump and now they're on the hook too for all that tenant damage + actual damage from being vacant for 1-2 years. I've done something like 1400 orders by lenders where they have me go out and photograph houses & provide values for them (Interior/exterior BPOs), the number of failed investors would always surprise me. Then I started looking into WHY, and it's usually extremely idealistic people that have no clue that rentals do take halfway decent cash reserves to get rolling, but after a while they're amazing. So, going back to the bank thing, most of the lenders I've talked to want to see you owning them/running a rental business for 3-5 years before they give serious attention to loaning you money. I'm right at 3.5 years now and they're finally warming up to how we're doing things. |
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Posted: 2/20/2017 7:54:36 PM EDT
[#5]
OP, it's interesting to see this. You and I are in about the same place, though my 54 doors are all under one roof. Last year I sold my rentals to buy one 54-unit apartment building. My vacancy is around 1.5% and my cash-on-cash is over 40%. There's no way I was seeing anywhere near that in my scattered sites. It's a desirable building in a desirable location (C-class; think working class/no collar workers who need inexpensive housing) and I got it for a song because of a partnership that was souring due to interpersonal differences / management style.
Best move I ever made. You've got my sincere respect for handling 50+ scattered sites. It works and it's profitable, but I'll never do scattered site again. Multiple doors under one roof are just too convenient and the economies of scale are wonderful. Do you self-manage, have a third-party management company, or have you formed your own management team? I do a hybrid where I self-manage with my cousin (we're 50/50 owners), have a tenant as a cleaning lady, and outsource for stuff we can't or don't want to handle. While there's always something to do and more that always needs doing, it works really well for us. ETA: Man, I wish I would have done a channel and saved pictures of some of the things I went through. I got started in 2008 and dove into the deep end of the pool with rent assistance tenants. Again, all self-managed. My God, that was a trial by fire- everything from roaches to grilling in the living room (charcoal Weber grill on two week old carpet) to deaths/murders. On the other hand, I feel much better about my own housekeeping! Mike |
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Posted: 2/21/2017 1:16:27 AM EDT
[#6]
I self-manage and have a team of guys that works for me doing all the maintenance stuff and other similar issues (Kicking in doors and whatnot).
When I hit 100ish units, my hope is to outsouce all the scattered properties and go after larger developments. The reason I like the scattered sites is significant appreciation that I'm seeing with the properties. I've got quite a few that have darn near doubled over the past 2 years after rehab and I just am not seeing those kinds of deals with larger multi-family units. I'd LOVE to get a 20-30 unit one, however the ones I see don't cashflow at all and the sellers are rarely distressed. |
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Posted: 2/21/2017 10:29:19 AM EDT
[#7]
Quote HistoryQuoted:
I self-manage and have a team of guys that works for me doing all the maintenance stuff and other similar issues (Kicking in doors and whatnot). When I hit 100ish units, my hope is to outsouce all the scattered properties and go after larger developments. The reason I like the scattered sites is significant appreciation that I'm seeing with the properties. I've got quite a few that have darn near doubled over the past 2 years after rehab and I just am not seeing those kinds of deals with larger multi-family units. I'd LOVE to get a 20-30 unit one, however the ones I see don't cashflow at all and the sellers are rarely distressed. SE WI just doesn't have that level of principal appreciation. I owned my places for 8 years and was happy to see 10% principal appreciation. It's a cash flow, depreciation, and loan amortization game here. Distressed apartment owners happen. The trick is finding them before they decide to sell and before foreclosure papers get filed. Target an area where you want to buy and get a list of every multi-family in the area. We have landlord registration out here, so it's a matter of going to city hall and paying them five to ten bucks for a full list. Our list also has complete contact information for the owner as required by law. Start hitting every owner once a month with a post card. You may not hear anything for years, but keep going. Professionally printed jumbo-size color post cards are .35 cents each for 1,000 or more, and I know I could drop that figure if I were to look around more. Regular size cards are more like .19 cents each (full color, 1000+). Postage for jumbos is the same as a normal letter at .49 cents each and the regular post cards are only .34 cents each. Even if you have to do that for years, your first deal should pay for all of those expenses in one month. And if you stop, you'd be surprised how many owners will call you YEARS after the fact. Some guys keep every solicitation to sell they receive "for the day" they decide to sell. Mike |
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Posted: 2/22/2017 2:46:47 PM EDT
[#8]
Good information.
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Posted: 2/22/2017 3:15:45 PM EDT
[#9]
This is great information. I find the low rents and home prices mentioned unbelievable. I guess I just live in some expensive ass cities. I pay $2050 in rent (Seattle) for a single family home. In Virginia, outside of DC, I paid $2400. As for who pays rents that high? People like me, transient workers. I work for the .gov and move every 2 years, buying a house every 2 years and selling is prohibitive and the prices in some of the cities I live is absurd. $600k for a house smaller than most apartments.
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Posted: 2/22/2017 3:16:05 PM EDT
[#10]
how much capital did you start with? do you have investors/partners? would love to see/hear a general discussion of your start and progression of the finance side of things.
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Posted: 2/22/2017 4:21:07 PM EDT
[#11]
Quote HistoryQuoted:
This is great information. I find the low rents and home prices mentioned unbelievable. I guess I just live in some expensive ass cities. I pay $2050 in rent (Seattle) for a single family home. In Virginia, outside of DC, I paid $2400. As for who pays rents that high? People like me, transient workers. I work for the .gov and move every 2 years, buying a house every 2 years and selling is prohibitive and the prices in some of the cities I live is absurd. $600k for a house smaller than most apartments. Ohio home prices are cheap. $450k gets you a custom build house, 4k sq ft. |
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Posted: 2/22/2017 4:27:42 PM EDT
[#12]
Quote HistoryQuoted:
how much capital did you start with? do you have investors/partners? would love to see/hear a general discussion of your start and progression of the finance side of things. $30k. Yes, I absolutely loathe banks, private investors on the other hand are amazing, although costly. |
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Posted: 2/23/2017 11:50:01 AM EDT
[#13]
Quote HistoryQuoted:
This is great information. I find the low rents and home prices mentioned unbelievable. I guess I just live in some expensive ass cities. I pay $2050 in rent (Seattle) for a single family home. In Virginia, outside of DC, I paid $2400. As for who pays rents that high? People like me, transient workers. I work for the .gov and move every 2 years, buying a house every 2 years and selling is prohibitive and the prices in some of the cities I live is absurd. $600k for a house smaller than most apartments. Those rents... WOW. 
$2,400/mo is a $475k home at 4.5% on a fixed 30-year. Around here, that'll easily put you in a very upscale suburb with a 3,000 square foot home with 4 beds, 3 baths, and a 2 car garage (all averages). On the extreme end, think 4,000+ sq ft with 5 beds, 4 baths, and a 4 car garage if you're willing to take a fine property that just needs updating. If you're willing to go rural, you can do a 3 bed, 2.5 bath, 2 car garage with 2,500 sq ft on 50 acres with a stream OR a 4 bed, 4.5 bath, 2 car garage with 5,000 sq ft on half an acre if you don't like taking care of land. FWIW, my rents are currently: 1 BR: $615-625 2 BR: $715-735 3 BR: $825 Heated underground parking is $15/mo/vehicle and a storage locker is $7/mo/locker. Coin laundry is $1.50/turn. Mike |
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Posted: 2/24/2017 12:08:40 PM EDT
[#14]
Quote HistoryQuoted:
I self-manage and have a team of guys that works for me doing all the maintenance stuff and other similar issues (Kicking in doors and whatnot). When I hit 100ish units, my hope is to outsouce all the scattered properties and go after larger developments. The reason I like the scattered sites is significant appreciation that I'm seeing with the properties. I've got quite a few that have darn near doubled over the past 2 years after rehab and I just am not seeing those kinds of deals with larger multi-family units. I'd LOVE to get a 20-30 unit one, however the ones I see don't cashflow at all and the sellers are rarely distressed. Have your houses appreciated due to general housing market trends? I'm in an area where the housing market hasn't appreciated in the last 10 years, and I don't see any housing appreciation happening in the next 2 or 3 years at least. I'd like to get into rentals, but I need to figure out how to make money when the properties won't appreciate due to general housing market stagnation. |
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Posted: 2/24/2017 3:19:24 PM EDT
[#15]
While everyone has different goals and strategies, I would invest for cash flow, and if it appreciates, that's a bonus. Investing based on speculative appreciation seems dangerous, to me.
I think most of us got into rentals for financial freedom, and that's what cash flow provides. As far as the OP, he and I live in the same city. And I think he's buying on the SW side of Columbus. We have an area called Franklinton, and it's going through a major resurgence. While still ongoing, many investors, and large developers have committed to projects of up to $500 million. Right now, you'll find a lot of multi-family units in that area going for $10k-$40k. And once a full rehab is done, many are going on the market for $200k-$400k. |
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Posted: 2/24/2017 4:19:48 PM EDT
[#16]
Quote HistoryQuoted:
While everyone has different goals and strategies, I would invest for cash flow, and if it appreciates, that's a bonus. Investing based on speculative appreciation seems dangerous, to me. I think most of us got into rentals for financial freedom, and that's what cash flow provides. As far as the OP, he and I live in the same city. And I think he's buying on the SW side of Columbus. We have an area called Franklinton, and it's going through a major resurgence. While still ongoing, many investors, and large developers have committed to projects of up to $500 million. Right now, you'll find a lot of multi-family units in that area going for $10k-$40k. And once a full rehab is done, many are going on the market for $200k-$400k. Thanks for the info. In my area (Peoria, Illinois) housing has decreased such that many houses are selling for less than they sold 10 years ago. I agree with you on investing for cash flow, especially in my area. What I was curious about was whether the OP had been able to buy smart such that he had some very quick appreciation. I'm considering getting into real estate investing and am trying to learn as much as I can so I can make a smart first purchase. |
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Posted: 2/24/2017 6:40:35 PM EDT
[#17]
Quote HistoryQuoted:
While everyone has different goals and strategies, I would invest for cash flow, and if it appreciates, that's a bonus. Investing based on speculative appreciation seems dangerous, to me. I think most of us got into rentals for financial freedom, and that's what cash flow provides. As far as the OP, he and I live in the same city. And I think he's buying on the SW side of Columbus. We have an area called Franklinton, and it's going through a major resurgence. While still ongoing, many investors, and large developers have committed to projects of up to $500 million. Right now, you'll find a lot of multi-family units in that area going for $10k-$40k. And once a full rehab is done, many are going on the market for $200k-$400k. Those numbers are crazy. Crazy like i should move there and buy every one that hits the market. Those are huge profit margins on flips. I cant even get the lower end of that around here (40 to 200k). Franklinton. Im seriously going to do some research tonight. |
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Posted: 2/24/2017 9:35:27 PM EDT
[#18]
Quote HistoryQuoted:
Those numbers are crazy. Crazy like i should move there and buy every one that hits the market. Those are huge profit margins on flips. I cant even get the lower end of that around here (40 to 200k). Franklinton. Im seriously going to do some research tonight. Look up Frankliton, Merion Village, Hungarian Village, and German Village. German Village is already known for being really expensive to own property. Merion Village is the next up and coming area. Franklinton, like I said, is still going through transition. But there's a lot of investors doing flips there. |
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Posted: 2/24/2017 10:39:21 PM EDT
[#19]
I'm right outside the outer belt. Pickaway and Ross County, hoping to be in Fayette and Fairfield within 2 years.
Franklin County has all sorts of good spots, I just hate Columbus city for fining me $400 for putting a tarp on a roof. Had it out with them 9 years ago and still can't let it go. A few years from now I'd love to do a study on Columbus but there's too much money outside of the outer belt and little competition. |
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Posted: 2/25/2017 1:20:18 PM EDT
[#20]
I own two single family homes and never planned on getting into the rental property game. I simply couldn't offload one as the value was considerably less than purchase price.
Anyways they are now coming back in value. While I'm still in negative cash flow, their value is considerably more than what I owe or paid and the tax break helps. Where can I search for multi family units? I have a decent amount of liquidity and am considering purchase a multiplex of $600k or less. I really just want to find some examples, draft up a business plan, and see if it will work for me. |
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Posted: 2/25/2017 3:47:41 PM EDT
[#21]
Quote HistoryQuoted:
I own two single family homes and never planned on getting into the rental property game. I simply couldn't offload one as the value was considerably less than purchase price. Anyways they are now coming back in value. While I'm still in negative cash flow, their value is considerably more than what I owe or paid and the tax break helps. Where can I search for multi family units? I have a decent amount of liquidity and am considering purchase a multiplex of $600k or less. I really just want to find some examples, draft up a business plan, and see if it will work for me. Loopnet is the big one, but the deals typically on there aren't as good as direct from seller or distressed deals. The MLS also has then, they CAN be good deals (Guys who list with non-commercial brokers who price it at much more reasonable rates). |
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Posted: 2/25/2017 4:23:37 PM EDT
[#22]
I search on Remax or any of the realtor sites. You can select multi-family.
Loopnet is kind of the garbage can of deals that no one wants. Most of the good deals never make it online. |
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Posted: 3/5/2017 4:33:56 PM EDT
[#23]
Quote HistoryQuoted:
I search on Remax or any of the realtor sites. You can select multi-family. Loopnet is kind of the garbage can of deals that no one wants. Most of the good deals never make it online. I've found some deals on LoopNet and have ealt with garbage on the MLS. It all depends on the area. Mike |
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Posted: 3/6/2017 1:00:10 AM EDT
[#24]
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I've found some deals on LoopNet and have ealt with garbage on the MLS. It all depends on the area. Mike I imagine they're both the same in the fact you can get in front of properties that way. I'm planning this summer on shooting for a few normal, overpriced MLS deals and seeing if I can make some cashflow & equity in seemingly bad situations. Would be a fun challenge I think. |
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Posted: 3/9/2017 2:09:13 PM EDT
[#25]
Quote HistoryQuoted:
I imagine they're both the same in the fact you can get in front of properties that way. I'm planning this summer on shooting for a few normal, overpriced MLS deals and seeing if I can make some cashflow & equity in seemingly bad situations. Would be a fun challenge I think. Quote HistoryQuoted:
Quoted:
I've found some deals on LoopNet and have ealt with garbage on the MLS. It all depends on the area. Mike I imagine they're both the same in the fact you can get in front of properties that way. I'm planning this summer on shooting for a few normal, overpriced MLS deals and seeing if I can make some cashflow & equity in seemingly bad situations. Would be a fun challenge I think. No cost in making lowball offers. At worst, time spent. At best, profit made. Mike |
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Posted: 3/10/2017 1:42:02 AM EDT
[#26]
Quote HistoryQuoted:
No cost in making lowball offers. At worst, time spent. At best, profit made. Mike Did you do that with MLS AND loopnet? Theres a pretty well known guy around here who makes offer on every single property on the market at half of list vale. No comps, no research or inspections, just half. |
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Posted: 4/5/2017 5:15:37 PM EDT
[#27]
Do you guys have experience investing in vacation rentals? I'm interested in buying waterfront places for short term rentals.
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Posted: 4/5/2017 5:21:33 PM EDT
[#28]
An area that I can buy something that rents out at 1% of value per month.
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Posted: 4/5/2017 5:25:33 PM EDT
[#29]
Quote HistoryQuoted:
Did you do that with MLS AND loopnet? Theres a pretty well known guy around here who makes offer on every single property on the market at half of list vale. No comps, no research or inspections, just half. Give him asbestos, lead, sewer problems and termites all in one lol |
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Posted: 4/5/2017 5:26:31 PM EDT
[#30]
Quote HistoryQuoted:
Do you guys have experience investing in vacation rentals? I'm interested in buying waterfront places for short term rentals. |
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Posted: 4/6/2017 9:57:19 AM EDT
[#31]
I see deals like this pop up fairly regularly in my small town. I know this one has sold already, I don't know why they didn't take it down.
$18k 2br, 1ba At that price, paying cash for it, I can't help but think I could make some money with properties like that. Perfect size for a newly divorced woman and a kid or two, it's only $18k, it's a smaller house so damages could be more easily repaired by myself than if someone trashes a larger house, etc. Am I crazy for thinking about something like this? |
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Posted: 4/6/2017 11:32:04 AM EDT
[#32]
Quote HistoryQuoted:
I see deals like this pop up fairly regularly in my small town. I know this one has sold already, I don't know why they didn't take it down. $18k 2br, 1ba At that price, paying cash for it, I can't help but think I could make some money with properties like that. Perfect size for a newly divorced woman and a kid or two, it's only $18k, it's a smaller house so damages could be more easily repaired by myself than if someone trashes a larger house, etc. Am I crazy for thinking about something like this? If you take 10 months of rent a year (to account for vacancy) subtract tax and insurance do you like that cash flow? I'd figure 25% off the top to save for repairs until you have a nice fund set aside if you don't have extra cash (you may). |
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Posted: 4/6/2017 1:23:08 PM EDT
[#33]
Quote HistoryQuoted:
How much do comparable properties rent for in your area? If you take 10 months of rent a year (to account for vacancy) subtract tax and insurance do you like that cash flow? I'd figure 25% off the top to save for repairs until you have a nice fund set aside if you don't have extra cash (you may). I would say a house like this could go anywhere from $500-600/mo. |
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Posted: 4/6/2017 2:16:46 PM EDT
[#34]
Is there any recomendations for hard money lenders?
Wife and I have some rentals and are trying to build up credit but are having hell getting financing traditionally since we're not that established. |
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Posted: 4/6/2017 3:09:29 PM EDT
[#35]
Do you cash out or finance, or does it vary? If finance, any good sourcing of lending, with 20-50% down?
How do you screen renters? What do you charge for security/cleaning? Do you accept rent via direct deposit, if so do you suggest a rental price break for those who take it? |
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Posted: 4/6/2017 4:53:54 PM EDT
[#36]
Do you manage for yourself, or do you have a property manager?
Have you any experience with the online rental services, where they collect your rent for you, or clients can pay with an app? |
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Posted: 4/7/2017 2:51:58 PM EDT
[#37]
I use Cozy to manage my leases. Tenants pay online.
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Posted: 4/7/2017 6:21:06 PM EDT
[#38]
Does it make more sense to go with duplexes or better?
It seems like you're combining some costs, at least to some extent, and it could even give you an "early warning system" if one of the tenants is getting out of hand; the other tenant(s) would likely let you know. |
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Posted: 4/8/2017 11:59:14 PM EDT
[#39]
Quote HistoryQuoted:
Does it make more sense to go with duplexes or better? It seems like you're combining some costs, at least to some extent, and it could even give you an "early warning system" if one of the tenants is getting out of hand; the other tenant(s) would likely let you know. For instance, one of my tenants emailed me on Monday, she said the guy at the building next door is dumping all of his building materials trash on the back porch of your vacant unit. I called up his landlord, and took care of that immediately. |
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Posted: 4/19/2017 11:26:24 AM EDT
[#40]
Hey @Shockergd
I just watched your latest video. Seems you got a hell of a deal for 15K The only suggestion I have is that your camera lens seemed a little dirty. That and maybe bring a flashlight to show us all the dimly lit areas. I enjoy your videos and learning more about real estate. I plan to get into that when I can. |
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Posted: 5/21/2017 11:58:13 AM EDT
[#41]
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For me it's 3 year minimum and if I refinance them out I'm required to pay whatever their loss would be. The goal is to use them for a while then refinance out once i can access commercial rates + portfolio products of 4%-5%, once I do that my profitability will be sky high. The big thing I've offered partners is backside equity even after a refinance to keep a relationship open with them post-refinance. Maybe I'm doing this all the wrong way, but once you secure private money and develop a good relationship with investors/partners it's significantly nice compared to dealing with banks. I've had banking lenders lie to me multiple times about what they offered, terms, approvals and whatnot. So far investors haven't lied to me a single time, never misrepresented themselves and been very, very easy to work with. That comes at the expense of having to bring some major experience to the table to make them comfortable to partner with me on buying stuff. Are your payments on the private investor/"hard money" loans interest only with a balloon payment for the full balance at the end? What does it take for you to be able to access commercial rates? I assume you are talking about just converting that short term, high interest loan into a 30 year fixed mortgage at 4-5%, right? |
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Posted: 7/12/2017 6:40:53 PM EDT
[#42]
I must have missed this thread, but we are in very similar spots. We just got to 48 rentals in the last 4 years, and I'm happy with that average.
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Posted: 7/18/2017 11:30:15 PM EDT
[#43]
This is some really good info. I've always thought about buying a 4-plex or something. Also, my house is paid off so renting it out when me move has been thrown around.
Those of you with multiple units, do you manage them yourself or do you go through a management company? |
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Posted: 7/19/2017 9:04:59 PM EDT
[#44]
Quote HistoryQuoted:
This is some really good info. I've always thought about buying a 4-plex or something. Also, my house is paid off so renting it out when me move has been thrown around. Those of you with multiple units, do you manage them yourself or do you go through a management company? About 18 months after i started with them i lost my job, got divorced, had health problems and bought another business so i turned all of the rentals over to them. I plan to buy 60 next year once i have some other things handled. I have 3 family partners now to help scale. Mine are in 3 towns so i need a lot more to hire a salaried manager for them. |
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Posted: 7/21/2017 12:38:46 AM EDT
[#45]
Quote HistoryQuoted:
I managed 15 units, when i bought 16 through 20 i switched half to a management company. I was happy after 12 months but i work in the trades so they had to use the company i managed for repairs so there was less room for shenanigans. About 18 months after i started with them i lost my job, got divorced, had health problems and bought another business so i turned all of the rentals over to them. I plan to buy 60 next year once i have some other things handled. I have 3 family partners now to help scale. Mine are in 3 towns so i need a lot more to hire a salaried manager for them. |
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Posted: 7/21/2017 6:43:01 PM EDT
[#46]
Quote HistoryQuoted:
So, say you had >5. You'd manage those yourself? Quote HistoryQuoted:
Quoted:
I managed 15 units, when i bought 16 through 20 i switched half to a management company. I was happy after 12 months but i work in the trades so they had to use the company i managed for repairs so there was less room for shenanigans. About 18 months after i started with them i lost my job, got divorced, had health problems and bought another business so i turned all of the rentals over to them. I plan to buy 60 next year once i have some other things handled. I have 3 family partners now to help scale. Mine are in 3 towns so i need a lot more to hire a salaried manager for them. If you get multi unit properties you can also pay a reliable tenant to handle showing units and doing minor repairs to save over using a management company. |
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Posted: 7/26/2017 12:02:46 AM EDT
[#47]
Closed on 13 Monday, have another 7 in the works that will close within the next week-ish.
This will take me to 71, and I think at that point I'll take a break. At this rate I do think I can manage ~100 by myself but want to look at some more serious software for management, so when I start hiring W2 employees that they'll be extremely effective. The average seems to be 50 units per full time employee, I want to try for 100 or so. I think with the right software I'll be able to do it. There's still too much around here to fully stop for an appreciable period of time. Dozens of landlords on the horizon wanting to get out for good, without children to pass their business on to, and the market can't support it. |
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Posted: 7/26/2017 1:35:04 PM EDT
[#48]
Quote HistoryQuoted:
Closed on 13 Monday, have another 7 in the works that will close within the next week-ish. This will take me to 71, and I think at that point I'll take a break. At this rate I do think I can manage ~100 by myself but want to look at some more serious software for management, so when I start hiring W2 employees that they'll be extremely effective. The average seems to be 50 units per full time employee, I want to try for 100 or so. I think with the right software I'll be able to do it. There's still too much around here to fully stop for an appreciable period of time. Dozens of landlords on the horizon wanting to get out for good, without children to pass their business on to, and the market can't support it. - How are you able to prove that funding to keep purchasing properties? - What software are you currently using to manage all this? |
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Posted: 7/26/2017 2:34:38 PM EDT
[#49]
We live in the same general area, and I have no idea how you're doing it.
But, keep winning my friend! |
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Posted: 7/27/2017 10:43:54 PM EDT
[#50]
Quote HistoryQuoted:
- Previously you said that you obtain the money privately ( im assuming close friends and family?) If so, how do you pay them back? on a monthly basis? or percentage of total properties? - How are you able to prove that funding to keep purchasing properties? - What software are you currently using to manage all this? Set interest rate (hurdle) and some equity normally. Well the few guys I've had were willing to outlay a good sun of money so it's lasted a while. Goal is to use them as long term lines of credit slowly cahsout refinancing them and buying more. Just Quickbooks |
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