Who here owns rental properties?

[KBScobravert]

Exactly, less risk imo. He’s got a network of guys doing the same thing. This particular place he bought the mortgage for $39k. Sank $15k in to the flip when he had to foreclose. Sold for $90k, so he made money there, plus the returns on the note. I guess there is some hope that they continue to default after a few years. I need to find out more about the whole process but supposedly when you Owner Finance, you don’t have all the red tape when it’s time to evict. You can get them out in a week.

This interests me even more now. By "network" does he have multiple investors doing the same thing or multiple homes/payees he financed alone?

[bcoop]

This interests me even more now. By "network" does he have multiple investors doing the same thing or multiple homes/payees he financed alone?

Both. He holds several mortgages himself, but he’s got a network of investors that he sources mortgages from and for other people.

He’s the VP of a mortgage company by day, he’s been involved in the purchase and sales of hundreds of millions of dollars worth of mortgages for the company he works for. Now he’s doing this on the side trying to build it up to the point where he can be self employed. I’ll send you his contact info if you’re interested. He speaks at RE seminars all over the country.

[KBScobravert]

Both. He holds several mortgages himself, but he’s got a network of investors that he sources mortgages from and for other people.

He’s the VP of a mortgage company by day, he’s been involved in the purchase and sales of hundreds of millions of dollars worth of mortgages for the company he works for. Now he’s doing this on the side trying to build it up to the point where he can be self employed. I’ll send you his contact info if you’re interested. He speaks at RE seminars all over the country.

Send his contact info. if you will. I'm trying to learn as much as I can. I'd like to find someone willing to mentor me into my first deal.

I follow wholesaler pages on FB and those folks are a whole different breed but they are just scan enough to find cheap deals that need rehab.

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[jewozzy]

My grandfather while still alive owned 20 rentals and when he sold them he told all of his renters to go get financing at the bank and anything they could get he would give them .5% lower on the same terms. He had several houses that he sold 3+ times due to default. One in particular the guy only had 3 payments left but up and moved to Mexico. Told my granddad he was done and he could have the house bad. That guy in particular had added 1000sqft onto the house and had pulled the proper permits. He mad a huge killing on that one.

[beefed88]

I did the math. That is not a bad deal. At first I thought 10% is a terrible return. But, running the numbers that is not bad with a piece of property securing it.

Simple put.
150,000 purchase price
10% down for $15,000
135,000 financed for 10% at 15 years for $245,000 return.
15 years and profit $260,000 on $100,000 aint bad

Now though, managed mutual funds you can make more but there is nothing securing it like a piece of real estate.

Please share the info on the mutual fund that gets over 10% for 15 years because i will sell my rentals.

[slow99]

Please share the info on the mutual fund that gets over 10% for 15 years because i will sell my rentals.

Also, the funds that have nothing securing them.

[KBScobravert]

Please share the info on the mutual fund that gets over 10% for 15 years because i will sell my rentals.

I'm totally new to this stuff and have just been trying to learn what i can before getting into any investing, I got out of any stocks I had 7 years ago. From what I've read mutual funds will provide 12% return depending on timing.

1 had explained to me by a coworker, VTSAX. But again, I know nothing and dont know how to read that stuff.

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[Ruffdaddy]

Give me 12% returns and I'll cut my expenses by another 50% and live like a college student for 10 years at which point I'll retire.

[HarrisonTX]

Can you get me into a new Z06, nothing down right now, but in a few months I can sell some of my stocks to repay you. I would like payments around $500 a month also. This is on the Stanger's hookup plan. Thanks!

Are you me?

[akfodysvn]

The talks on financing... I'm not a veteran on the laws but those rates may be a violation of Dodd Frank laws on predatory lending

[Broncojohnny]

I did the math. That is not a bad deal. At first I thought 10% is a terrible return. But, running the numbers that is not bad with a piece of property securing it.

Simple put.
150,000 purchase price
10% down for $15,000
135,000 financed for 10% at 15 years for $245,000 return.
15 years and profit $260,000 on $100,000 aint bad

Now though, managed mutual funds you can make more but there is nothing securing it like a piece of real estate.

You can't reliably get 10% returns in mutual funds.

This calculation you are trying to do is in this post is the IRR for a series of cash flows over a period of time. If you look at a mutual fund in the same way you do the calc, you can compare. Generally rental property returns more than mutual funds but there is more risk involved. There is definitely a lot more hands on management involved. Mutual funds don't call you in the middle of the night with a fucked up toilet.

[Gasser64]

Mutual funds don't call you in the middle of the night with a fucked up toilet.

That's why I keep wanting people to talk about their property managers. If indeed anyone here employs one. I'd like to hear moar

[beefed88]

That's why I keep wanting people to talk about their property managers. If indeed anyone here employs one. I'd like to hear moar

First question I ask when someone inquires about rental properties. Do you max out your 401k and Ira? IMO those should very easily be a priority.

I manage my own properties but why would someone that lives local and has the abilities to fix things hire a property manager? The hassle? What hassle?

If you have a one 3/2/2 house (no 2 story homes, I personally would never but a single family 2 story) and you go through the house replacing faucets, water shutoffs, toilet floats, drain/maintain water heater, have good hvac, you are going to rarely get any calls. A 10% monthly fee does not justify getting one phone call in the middle of the night once a year.

With 4 sfr in 6-7 years I have one phone call in the middle of the night for a PEX line that broke in the ceiling. I give all tenants a water turnoff key for the main, he turned off the water. They get a case of air filters with reminders on the first, allen keys attached to the garbage disposals. I send quarterly reminders for checking leaks under the sinks and any outlets/switches that don't work. All rent payments are automatic with auto late fees. They all understand they don't even have to call me if they are going to be late I am getting $25 a day in late fees.

With the current market prices and hiring a management company the cap rate looks pretty bad. Even finding something off the MLS is hard, firms like opendoor have really made off MLS pricing difficult for the average investor.

People have tools to get values but a lot of people can't do math for repairs , closing costs. they don't believe you. I have had a lot of people get appalled by my fair offer, then come back to me after closing and tell me that they should have sold to me after it was all said and done. I made a lot of offers off MLS and I have my realtor write the contract. Its pretty easy. Looking for my 5th sfr, I was hoping interest rates would start pushing prices down but no luck yet.

[bcoop]

This interests me even more now. By "network" does he have multiple investors doing the same thing or multiple homes/payees he financed alone?

I’m going to make a run at this. Hope to have some notes myself before the end of the year. Just starting to work on my business and marketing plan. It could be great, and could be a total disaster.


This goes against everything I believe when it comes to financials, so it should be interesting.

I’ll send you some links to material.

[lowthreeohz]

my mom wants out of her place in hurst, and has offered it to me at well below what the comps in her neighborhood are selling for. i keep going back and forth on whether i want to deal with the hassle of owning a place across the country. i have a couple buddies in the area with 10-15 rentals between them and a couple of seemingly reliable property managers so even at ~10% of rent for mgmt fees i wouldn't be coming out of pocket for anything.

we're also looking to buy a new house in the next few years, and i'm not sure how having a rental property could hurt/help me. we don't anticipate moving for a while, however i'd like to be poised to jump should something come up - it's hard to find newer houses on 40+ acre plots around here.