Real Estate Investing
- Thread starter MACHater02
- Start date
You should talk to mach. He made like 8 trillion last quarter because he's so savvy.
I don't flip, I only buy investment properties that can return a certain amount over a three year period.
I have one rental now, looking to add more. I'm part of an LLC looking to flip houses in my neighborhood, but some of them don't appear to be serious.
We have five rental properties, mostly in Pinellas but we still have our townhouse in Baldwin Park that we've rented since we moved over this way.
I'm not a fan of Real Estate investing but it's tough to beat the annual returns with essentially free money available.
It's best to use a rental management firm IF you are not local or you have more than a couple properties. Management companies are a dime a dozen, research them because many are just scams.
Not sure what the environment's like over there. Flipping has become more difficult for small partnerships over here with Blackstone running the Seminole and Orange auction houses
Best of luck to you
Up until about a year and a half ago we used a management company. Frankly, I got sick of paying them 10% only to get a phone call every time something needed to be done asking me what I wanted to do. They knew what the threshold was and yet I would still get a call for every little thing. So, we decided that if we were essentially doing the work ourselves anyway then we may as well keep that 10%. The decision couldn't have been better. Granted it was a little tough at the start because we had to re-tenant two of the houses at that time, so we had to babysit some trades, show the houses, etc., but we got two really, really good tenants and we've hardly heard a peep from them since. That's the other thing too: tenant quality. I guess it's somewhat intuitive (or should've been for us), but the management company was looking at things from a very binary lens: did they pass credit? do the references check? are they willing to pay what we're asking? etc. Now, we have more control over the tenants that go in and can be more subjective as we're showing the house. You can tell a lot about a person based on your personal interaction. That intuition can tell you a hell of a lot more than some FICO score.
All that said, our decision to take over the management of the properties was done almost simultaneously with our decision to have my wife re-retire from teaching (she's only 37, but I always joke with her that she's retired for the second time before most of us have done it the first time). Having her at home and able to deal with the day-to-day when needed is a huge relief. I suspect that if she was still working then we may have elected to interview other management companies. Also, I think that as we grow our portfolio that, at some point, we may again entertain the notion of a management company.
It's not as clear cut as that. It's all personal preference. It comes down to the quality/tenure of the tenants, age/quality of the house, etc. It's all about opportunity cost.
We had one rental and I wanted no part of any more. We sold the house and vowed not to try and rent anymore. I would much rather put money into an equity or ETF where I can liquidate with one click if need be.
PS- be careful "screening" your tenants since you can now be accused of discrimination and have a lawsuit filed against you. This happened to someone renting near our rental.
PS- be careful "screening" your tenants since you can now be accused of discrimination and have a lawsuit filed against you. This happened to someone renting near our rental.
This. It's just like hiring a new employee. There are phrases you can't say and questions you can't ask. Be very careful and study the do's and don'ts. When I screen I do it very much like hiring or speaking with prospective clients - you'd be amazed what people tell you without you ever having to ask a question. You learn much more with your mouth closed than with it open.
This areas pretty hot right now, but deals are much harder to find than they were a few years ago. At least that's what the experienced flippers are telling me. The deal are still out there you're just not going to get them off the MLS or at auction like you used to be able to do.
In Feathersound, the past 3 homes to sell had contracts within 2-3 days and they all sold for almost asking price. I've had realtors leave notes on our door asking if we'd be interested in selling since they're so in need of inventory for clients.
related question: do you know anyone who has bought or sold a house via the magic-marker signs on the side of the road at intersections?
We'll agree to disagree. Obviously time is variable depending on what's needed; but, over the last 18 months, my wife and I have spent a total of 51 hours (I keep a tally) on all five properties. That total includes 30 hours at one property for which I decided to do about half of the turnover (installed all new light fixtures, ceiling fans, outlets, switches, switchplates, plumbing fixtures, etc.) and let a handyman do the other half (paint, clean, general maintenance, etc.). It also includes having to show two of the houses a total of 4 times before we got the right tenants.
Again, it's not as simple as saying this is best or that is best. Our arrangement works for us, but we have a friend and also a family member that swear by a management company for their rental portfolio (one has a larger pool and one has a smaller pool).
I know people who have bought that way. Those are flippers or people looking for houses for flippers. They're simply looking for people in desperate need to sell their house for whatever reason. They'll pay cash but at price that allows them to make a profit on the rehab.
Wow, they're getting 10% now? That's way more than what my father in law (a real estate broker) was getting back in the '90's. Most of his were in the $50-90 range. I can't imagine dropping $180 on a $1800 rental. That's a serious dent.
It's complicated. Anyway, I don't know what the SFH management market take is, but for multifamily it's generally in the 3%-4% range (plus construction management % if needed).
You're correct, I plan on switching companies when the current tenant moves out.
Not talking about the "we buy ugly houses" guys. I'm talking about the ones that actually advertise a house for sale like "3 Bed, 2 bath 144K"
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