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Which is more important? Fruits or vegetables?
Can I shoot my shot if I am not black?
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Chief
Robinhood engaging in market manipulation
Jummah Mubarak Fam ☪️💚
Enthusiast
Which is more important? Fruits or vegetables?
Can I shoot my shot if I am not black?
Conversation Starter
Chief
Robinhood engaging in market manipulation
Jummah Mubarak Fam ☪️💚
Congrats OP. Are you buying these under an LLC? If so, could you share how you got the mortgage for it? Thank you.
Read previous answer in thread above.
Congrats! Wow, where can you purchase a place for under 150k that rents for $1200/mo?
Was your question ever answered? Or is the answer “south florida”? Are there any other regions that offer this high return?
I buy from 2 Turnkey companies:
- Rent to Retirement (R2R).
- Martel Turnkey (if interested, DM me and I'll do an introduction. If you end up buying from them, I get $500. Hehehehe)
I bought from #1 back in Feb 2020 and it's been perfect. Only issue I had was a kitchen drawer needed to be fixed about 2 months ago.
I bought the duplex from MT in August. Had some additional maintenance issues after closing. They took care of some of them and the others were paid for with the rental income. I'm not out of pocket on this one, but my cashflow was eaten up by a few things. However, looks like we're good now.
I will tell you that from my experience, unless you live on one side of a duplex or the tennant's are responsible for the lawn AND all water/gas/utilities, it isn't worth it until you get 3 or 4 plex units. The economy of scale isn't there. This is my opinion.
Do you vet the PM companies, or you just use what the turnkey companies recommend? Also, do you see the properties in person first before buying?
I'll answer a few things here...
1. I'm in Charlotte. I have a SFH in AR, a duplex in OH, and this SFH will be in KS.
2. These were not bought in an LLC. They are in my name. I do plan to transfer to an LLC and I spoke with my bank about this beforehand. Like you, I couldn't find a place to loan to an LLC. Despite what the books said.
How do you go about determining where to buy? Do you know these locations beforehand or do you have an agent that researches for you?
Hi all. I just wanted to say Thank You for all the kind words. Plus, 6 of you have reached out to me. I'm glad I can help.
I’d love to start investing in real estate - how would you recommend getting started? Where did you source properties?
@EY3: Sure
@Salesforce 1: A friend actually asked the same thing. My response to him is below. And yes, you will pay the PM for as long as you use them. You can stop using when the contract comes due, but then you have to manage yourself. I could bring in more if I didn't have to pay 8% or 10% of the rent each month, but then it wouldn't be passive. I don't want to coordinate maintenance, find/screen renters, etc. I just want to sit back and get a statement every month and money deposited into my account.
100% agree and what you just said is why I’m liking this investment strategy! I love the stock market and what you described above is why I’ve not done real estate. I can’t make the time so that mgmt fee is worth it to me. Can I PM you? If I decide to go this route I’d happily give you a referral to one of the companies you mentioned.
What city are you in?
@M2: Nope. I don't deal with all that. My property manager does.
I assumed this push your income over the limit to also contribute into IRA. Do you backdoor Roth or is that not much of a concern to you?
I do a backdoor Roth IRA.
Coach
I'm astounded that your annual insurance is so low. I have shopped and shopped and can't get below $3000 for my duplex
Very fair, thank you! @VP
How do you research your market?
Do those companies then take a management fee for life? What are you giving away for the “turnkey”
Part? This seems very interesting because I’ve always wanted to do real estate investing
I Answered this above
Curious, why did you use 5% maintenance for your forecast? I’ve traditionally seen forecasts of 5-15% plus another 8% for capex. I’m only 3 years into my first property so don’t have good benchmarks to compare myself so interested in your experience behind the numbers.
That's a good question. I've seen all kinds of #'s.
First, I don't save for CAPEX since the properties I just bought went through a total rehab.
I chose 5% for each because that is what my friend does who has a few million worth of property. TBH, it doesn't really matter right now. I'm not using the current cash flow for anything except saving it to buy another property. I make enough from my day job to cover anything that happens. But I'm still using it as a rule of thumb. In the end, it's just personal preference.
I have 4 properties with 20% down, 1.5M total value of properties, typically I get 12% annual cash flow after all expenses and mortgage payments. Goal is to add one property every year for next 10 years.
What companies did you use?
5% annual vacancy seems low for what I experience; and I stopped seeing the value of a property manager after I’ve had some long term tenants. Numbers look Ok otherwise. Congrats on the journey!
It depends on the location but the minimum vacancy rate I see on projections is typically 10%.
Well done VP, but I find it amazing that you can rent out yearly for more than 10% of the value of the property. What city is this in? I would love to get in on this market.
Yeah, I don’t know of any market where that 1% rule would hold true. Have you found one?