Investment Property Woes

[Diablo360]

FWIW, almost everyone that I know who rents a house pays rent far greater than what their mortgage payment would be if they just bought it. Maybe it's just the difficulty of saving up a 20% down on an $800K property that keeps them renting.

Not down here in SoCal............. My rent is about 1/3 of what I would have to pay if I bought one of the condos they're selling right down the street with 20% down on an interest only loan. Why pay $7000 a month in interest on a property that is going down in value in this soft RE market. Makes no sense......

 

[clr1024]

FWIW, almost everyone that I know who rents a house pays rent far greater than what their mortgage payment would be if they just bought it. Maybe it's just the difficulty of saving up a 20% down on an $800K property that keeps them renting.

Not here in Florida either as I stated in an earlier post. It used to be that way but with the market boom things have flipped and unless the market collapses I will see a lot of people rent at a much lower cost than spending their money to buy at a much higher cost. The gap is big right now, maybe not as big as cali but its significant. To me the RE market seems very unstable, I have a few friends that bought a year ago and I have a strong feeling they are upside down on their mortgages now, not a good place to be.

 

[steveny]

the reason noone "buys" the $70K home is because no credit, shaky job, low income to debt and they DO NOT offer the same loan products in those parts of the country. the coasts and high growth areas get much better, more flexible loan options.....

And this is the anwser to your question why people pay 1700 a month to rent a house I buy for 70k. I have dozens of properties like that and keep buying more all the time. I also manage quite a few for people who live out of state, even Prime members.

edit...
Here is a current list of the last batch we looked at to buy.
4 unit for 74k rents are $1675 need ~3k in repairs utilities seperated

2 unit for 40k Rents are $1100 needs a ~5 k roof replacement utilities seperated

3 unit for 75 rents are $1350 needs ~1k in repairs utilities seperated

3 unit for 29.9k rents are $1275 needs a lot of work ~10-15k nothing is seperated ~300 in utilities a month

2 unit for 54.9 rents are $1100 need nothing, utilities seperated

19 unit for 775k GI/year $121,140 sold within a day of listing to a california investor, paid cash ...full price.

This is just a list of what I looked at last week another prime member who is buying here has first dibbs but if anyone is interested I am all ears. I will be buying the 29.9k property probably next month, offer in for 22k waiting for reply.

 

[clr1024]

And this is the anwser to your question why people pay 1700 a month to rent a house I buy for 70k. I have dozens of properties like that and keep buying more all the time. I also manage quite a few for people who live out of state, even Prime members.

edit...
Here is a current list of the last batch we looked at to buy.
4 unit for 74k rents are $1675 need ~3k in repairs utilities seperated

2 unit for 40k Rents are $1100 needs a ~5 k roof replacement utilities seperated

3 unit for 75 rents are $1350 needs ~1k in repairs utilities seperated

3 unit for 29.9k rents are $1275 needs a lot of work ~10-15k nothing is seperated ~300 in utilities a month

2 unit for 54.9 rents are $1100 need nothing, utilities seperated

19 unit for 775k GI/year $121,140 sold within a day of listing to a california investor, paid cash ...full price.

This is just a list of what I looked at last week another prime member who is buying here has first dibbs but if anyone is interested I am all ears. I will be buying the 29.9k property probably next month, offer in for 22k waiting for reply.

This sounds interesting, how hard of a time do you have keeping these places rented? Do you sub contract all the repair work? What do you charge as a management fee? Is there a prime member discounted rate:tongue:

 

[mfh]

Here in San Francisco a deeded parking spot costs about $100k.

: |

 

[steveny]

This sounds interesting, how hard of a time do you have keeping these places rented? Do you sub contract all the repair work? What do you charge as a management fee? Is there a prime member discounted rate:tongue:

pm sent

 

[lrsudog]

Not down here in SoCal............. My rent is about 1/3 of what I would have to pay if I bought one of the condos they're selling right down the street with 20% down on an interest only loan. Why pay $7000 a month in interest on a property that is going down in value in this soft RE market. Makes no sense......

I live in SoCal myself. I was actually talking about houses, specifically. Condos, in my experience, don't rent for much more than the equivilant sized & equiped apartment, no matter where in LA you are.

OTOH, a smallish 2 bedroom house in West Hollywood might sell for a million and rent for $2600, while a house twice as large in Northridge might sell for $750K and rent for the same amount, so it all depends on where you buy.


FWIW, my house would cost about $3000 per month to rent, but my mortgage is $1058. Of course I bought lucky, ten years ago.

 

[Diablo360]

I live in SoCal myself. I was actually talking about houses, specifically. Condos, in my experience, don't rent for much more than the equivilant sized & equiped apartment, no matter where in LA you are.

OTOH, a smallish 2 bedroom house in West Hollywood might sell for a million and rent for $2600, while a house twice as large in Northridge might sell for $750K and rent for the same amount, so it all depends on where you buy.


FWIW, my house would cost about $3000 per month to rent, but my mortgage is $1058. Of course I bought lucky, ten years ago.

That same house in West Hollywood that rents for $3k a month can't be touched for under $700-$800k if you wanted to buy it. Your still looking at payments that are at least 2X, if not 3X, larger on an interest only loan.......

 

[lrsudog]

That same house in West Hollywood that rents for $3k a month can't be touched for under $700-$800k if you wanted to buy it. Your still looking at payments that are at least 2X, if not 3X, larger on an interest only loan.......

Um, that's why I said it would sell for a million, and that it depends on the area.

 

[johnny010]

And this is the anwser to your question why people pay 1700 a month to rent a house I buy for 70k. I have dozens of properties like that and keep buying more all the time. I also manage quite a few for people who live out of state, even Prime members.

edit...
Here is a current list of the last batch we looked at to buy.
4 unit for 74k rents are $1675 need ~3k in repairs utilities seperated

2 unit for 40k Rents are $1100 needs a ~5 k roof replacement utilities seperated

3 unit for 75 rents are $1350 needs ~1k in repairs utilities seperated

3 unit for 29.9k rents are $1275 needs a lot of work ~10-15k nothing is seperated ~300 in utilities a month

2 unit for 54.9 rents are $1100 need nothing, utilities seperated

19 unit for 775k GI/year $121,140 sold within a day of listing to a california investor, paid cash ...full price.

This is just a list of what I looked at last week another prime member who is buying here has first dibbs but if anyone is interested I am all ears. I will be buying the 29.9k property probably next month, offer in for 22k waiting for reply.

How'd you get the nuts:biggrin: , I mean money to start this? I talked to a guy that was 37 and retired. He started the exact above when he was 19. Said the most he owned was 50 rents in one year, and had bought and sold 30 some odd houses the year of his retirement. He started out with one house, no money, and built the business.

Did you already have money, or did you just go find a set of rent houses on a gamble, and leverage the equity?

Also, anyone buying short stocks on the housing industry? Been thinking about it.

 

[steveny]

How'd you get the nuts:biggrin: , I mean money to start this? I talked to a guy that was 37 and retired. He started the exact above when he was 19. Said the most he owned was 50 rents in one year, and had bought and sold 30 some odd houses the year of his retirement. He started out with one house, no money, and built the business.

Did you already have money, or did you just go find a set of rent houses on a gamble, and leverage the equity?

Also, anyone buying short stocks on the housing industry? Been thinking about it.

I have told my story on Prime a few times. I think some people are probably getting sick of hearing it. :biggrin: If you search you will find it for sure.

Short version, Born REALLY poor, poorer than anyone I have ever met. Started at 18 built up a huge business sold it all off in 2001 at 35 and took a few years off. Got back into it a few years ago because I was pretty bored just hanging around the house.:biggrin: Also my wife is much younger than me and although she has a masters degree she wanted to do RE. She helped me out while she was in school and liked RE better than being a speech pathologist.

The key to my success, never pay what something is worth. Be willing to get my hands dirty. Having great people who help me accomplish my goals while I am helping them accomplish theirs.

 

[robr]

Two things missing in this area, nice weather in the winter and there is a lack of traffic congestion.

And probably tech jobs (and a pool of tech people to hire from if you have your own tech company).

 

[steveny]

And probably tech jobs (and a pool of tech people to hire from if you have your own tech company).

Yep. This area is very depressed. Factory/college jobs mostly ~15 bucks an hour. Lots of tenants. Beautiful in the summer. All the Ithaca college and Cornell students go home and the town is empty, no traffic.

 

[robr]

Sort of sucks. I've looked at relocating this office, but I'm stuck keeping it in an area with a tech talent pool. My investors are in Richmond, VA and would love to move us down there, but even in such a major city so close to DC, there is squat available in the tech pool (for the technologies we use) when I've gone to VA resume resources. Not that my wife would move anyway, but I was at least looking into the possibility. I'm stuck here for now.

 

[steveny]

Sort of sucks. I've looked at relocating this office, but I'm stuck keeping it in an area with a tech talent pool. My investors are in Richmond, VA and would love to move us down there, but even in such a major city so close to DC, there is squat available in the tech pool (for the technologies we use) when I've gone to VA resume resources. Not that my wife would move anyway, but I was at least looking into the possibility. I'm stuck here for now.

Not a bad place to be stuck in the summer.

 

[robr]

My goal was to move someplace where I could buy a decent house for $200-250K, yet still be in a tech-centric locale. Almost did the Round Rock thing with Dell, but again, the wife wouldn't go for it after they flew us out there.

I either need to make more $$$, or the housing market around here needs to drop by 50%. I have a feeling it's not going to be the latter!

 

[DDankew]

For those of us on the left and right coasts, let me just ask...

You can buy a house for approx. $90K???? Holy crap. They are building townhouses near me that sell for $800K. You can get an older single family for maybe as low as in the high 400's if its a fixer upper. Most 2-3000 sq. ft. single families go for $600K and up to many millions. Townhouses from $400K to $1.5M (those 1.5M townhouses are fantastic though).

Anyway, that's just remarkable that you could buy a house for $90k or so.

Back on point, a few of the responses here may have been a bit off point by saying you've dodged a bullet. No one has asked, and you have not said, what's the intent of the investment? Hold it and hope for appreciation? Pos. cash flow? Hold it and be happy if there's neutral cash flow and though it's not appreciating, you are building equity because someone else is paying the mortgage? If the latter, than so what if you are even on the purchase price vs. the FMV. SteveNY's advice is good, but it's more focused on creating quick equity. Doesn't sound like the housing market down there in your part of TX is really hopping, so you may not be able to see quick growth and as we all know, bargains that are worthwhile are few and far between.

I'm just beginning my search for a commercial condo here in MD, so I can relate to the search.

Hey here in San Francisco, in a average neighborhood, a 100 year old 3 bed 1.5 bath home that has 1000 sf would sell for $ 1,200,000. All you get for $ 800,000 is a 1 bedroom condo that is less that 950 sf. Prices here have not gone down...(other parts of the SF bay area has dropped but not the City).

A duplex which was remodelled recently is selling for $ 2.3. million in my neighborhood!!!!!

Be glad you live in Texas or anywhere away from California.

 

[DDankew]

And this is the anwser to your question why people pay 1700 a month to rent a house I buy for 70k. I have dozens of properties like that and keep buying more all the time. I also manage quite a few for people who live out of state, even Prime members.

edit...
Here is a current list of the last batch we looked at to buy.
4 unit for 74k rents are $1675 need ~3k in repairs utilities seperated

2 unit for 40k Rents are $1100 needs a ~5 k roof replacement utilities seperated

3 unit for 75 rents are $1350 needs ~1k in repairs utilities seperated

3 unit for 29.9k rents are $1275 needs a lot of work ~10-15k nothing is seperated ~300 in utilities a month

2 unit for 54.9 rents are $1100 need nothing, utilities seperated

19 unit for 775k GI/year $121,140 sold within a day of listing to a california investor, paid cash ...full price.

This is just a list of what I looked at last week another prime member who is buying here has first dibbs but if anyone is interested I am all ears. I will be buying the 29.9k property probably next month, offer in for 22k waiting for reply.

Are you a Property Manager or Broker? I maybe interested provided I have someone I can trust managing the properties. PM me and we can talk.

 

[Ben]

pm sent

Can you send me a PM too? I'm very interested in seeing this as well!

 

[steveny]

I just want to clear a few things up. First, I am not a broker. We own a realestate management company and a maintenance company. We find the deals put in offers and if those offers are accepted we either pass them on to other investors or keep them ourselves. I would not set up a deal that I would not be happy with myself. We do not charge for finding or helping close the deal. I do require a contract to manage the properties I have set up for you. We are a full service comapny that handles ALL the needs of the property owners including but not limited to rent collections, repairs, lawn care, renting apartments, bill payment, etc...

Many people have pm'ed me about investing here. Whoever is interested can send me their email address and I am going to email out deals as we find them to everyone all at once.

 

[docjohn]

Hey Make sure Prime gets a piece of that action: (facilitation) fee.:wink:

 

[steveny]

I am able to receive emails but not send them out. I am going to look into what is going on tomorrow with the email glitch. Anyways I wanted to let you all know all the property that I have emailed everyone has been picked up by investors. I will be looking at more property in the beginning of April. I hope some of those will suit your needs. Steve

 

[robr]

Just a guess, but......

Are you trying to use a different SMTP server to send out mail while you're down in Florida than the one you normally use? If you set your email client to use a "from address" with a domain that's not local to the SMTP server, your outgoing email will be rejected by that server (spam prevention).

 

[steveny]

Just a guess, but......

Are you trying to use a different SMTP server to send out mail while you're down in Florida than the one you normally use? If you set your email client to use a "from address" with a domain that's not local to the SMTP server, your outgoing email will be rejected by that server (spam prevention).

Yes. I think that is what is going on I think. Any ideas on how I might fix it?

 

[robr]

taken to PM.