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bought 6 town houses in suburbs of Chicago since graduating (3-years out). Primarily buy short sale and rent 50/50 section 8 housing. Solid returns (20% IRR over 5 year holding period) due to using mortgages to finance
I self manage everything. If you put the time upfront to inspect and take care of the property you won’t have things breaking down in the middle of the night. That being said it has happened to me before and I remember 1 day out of 2 years now that I had to work from home in order to fix a plumbing issue at one of my units. Finding and managing tenants also gets much once you have a process down.
Bought in 2013 for 80k. Rented for 1200. Worth around 130k now but holding for that cash flow its providing
Lololol a house here is 1mil, can’t afford a place of my own let alone investment 😭
First was purchased in 2016 for $40K and fixed for another $60K in the Philadelphia area. Exclusively renting to section 8 (the government cuts you a check for section 8 tenants) which pays to cover the mortgage + some extra (paid all cash for the initial purchase and did a refinance to take out a % of my total equity to leverage for another investment). Totaling 3 at the moment hoping to find a 4th by EOY if possible and stay on track to do one property per year.
2.5 years since graduated. About to close on 3rd townhome to rent. Have 1 condo in downtown Chicago, and 2 in the suburbs now. I buy em at low price (outdated) and rehab myself, then rent them out. Profit after expenses per condo ranges from $300-600, nice passive cash flow.
My tenant is also section 8. I get a guranteed check from the county every month. In addition, my tenant deposits her portion separately. Read about the '1% rule' (if your property is 100k, it should generate 1k rent monthly), it's a good rule of thumb for starters.
C1 how many years working?
Feel you D1. OP where and what did you get for 80k?
Condo in Chicago. Got lucky at the time with an estate sale
Chicago is still solid but getting a little high now. I have cash but noticed inventory has slowed to a standstill with stuff just sitting on the market. I'll likely wait a bit more before buying again
Very impressive all! One question - are you using a property manager to handle repairs, contracts, finding renters, etc? With this job those are the aspects that scare me off because I hardly have time to work on my own place. If you use a property manager, I expect most of your profit goes out the window.
Thanks all! Any pitfalls to watch out for? I’ve heard Section 8 housing is steady income but your home gets pretty damaged. Also how did you all select your properties? Do you live close to properties or invest wherever you see the best value? I’m 1.5 years out of undergrad and have around 40k saved. Currently working in a tier 1 city but looking to invest elsewhere.
Please post geographies
Also scared about the section 8 program and its tenants are bullshit. These are just regular people. You're just as likely for your property to be damaged by any other average Joe
It’s the best side hustle...