Why are you NOT buying rental properties?

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ponyboy
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Re: Why are you NOT buying rental properties?

Post by ponyboy » Thu May 28, 2020 12:24 pm

It is pretty brilliant how OP has managed to keep this thread alive, while not getting it locked. Lot of headed discussions here and no mod has chimed in? Something is fishy.

Maverick3320
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Re: Why are you NOT buying rental properties?

Post by Maverick3320 » Thu May 28, 2020 12:37 pm

tomtoms wrote:
Thu May 28, 2020 12:19 pm
Maverick3320 wrote:
Thu May 28, 2020 11:46 am
OP,

Since starting this thread you've posted dozens of pithy one-liners in response to questions. Why not just put all the doubters in their place and open up your books? Show all the ignoramuses out there the spreadsheet you've used to track all your real estate expenses and revenues back to the time you bought your first property.
Do you doubt that people make money from real estate?

You mean the spreadsheet that I put together? That is the conclusive evidence you need?

Look, I am not here to tell everyone they should invest in real estate. Most people are not able to buy a second home so they do not have the resources to do real estate investing. But for those who can, I can tell you it is not as hard as you think.

I have a unique perspective that is very different from most people here. In addition to owning rental properties, I have a regular 9-5 job. I also own stocks and a business. I am not saying this to impress you but to give you an idea where I am coming from. I can tell you real estate investing is by far easier than working at a 9-5 job and starting a business. It also offers stability that stocks do not, as long as you buy cash flow properties and put away 20% of rent toward vacancy and repairs.
Friend,

I understand. You are telling Bogleheads how successful you are. I'm telling you to show us.

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HomerJ
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Re: Why are you NOT buying rental properties?

Post by HomerJ » Thu May 28, 2020 4:21 pm

tomtoms wrote:
Thu May 28, 2020 10:48 am
HomerJ wrote:
Thu May 28, 2020 10:12 am
tomtoms wrote:
Thu May 28, 2020 9:48 am
stoptothink wrote:
Thu May 28, 2020 9:03 am
tomtoms wrote:
Thu May 28, 2020 3:59 am


why be average?
There are very few posters on this board who are financially "average", and my family is not in the small subset. This very board is about people with regular 9-5 jobs who have become wealthy with a very simple investing strategy.
Nearly 40 millions have lost their job since this pandemic. Many will need to restart at the bottom of the ladder.

Hasn’t the Great Recession taught us anything? Corporations don’t care about you. Having multiple source of income is the key.
Having multiple liabilities is a detriment during a recession. If renters stop paying, you not only lose a source of income, but you still have to pay a mortgage and insurance and property taxes and repairs.
Then why put money in the stock market? That is just more liability!
How in the world do you have a business and rental properties and not understand the word "liability"?

Stocks are not liabilities.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

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tomtoms
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Re: Why are you NOT buying rental properties?

Post by tomtoms » Fri May 29, 2020 9:03 am

HomerJ wrote:
Wed May 27, 2020 7:43 pm
tomtoms wrote:
Wed May 27, 2020 10:07 am
7th_Diagram wrote:
Mon May 25, 2020 8:35 pm
Because I already have a job.
Having just 9-5 job is not going to get you far. You have to go the extra mile. It doesn’t have to be rental properties. It could also be a side hustle or whatever you want. The point is...don’t depend on a job.
This is incorrect. You should get a better 9-5 job.
Tell that to the 40 million Americans who just lost their job. Your 1960 playbook needs some updating!

StoopieHippo
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Re: Why are you NOT buying rental properties?

Post by StoopieHippo » Fri May 29, 2020 9:19 am

tomtoms wrote:
Fri May 29, 2020 9:03 am
HomerJ wrote:
Wed May 27, 2020 7:43 pm
tomtoms wrote:
Wed May 27, 2020 10:07 am
7th_Diagram wrote:
Mon May 25, 2020 8:35 pm
Because I already have a job.
Having just 9-5 job is not going to get you far. You have to go the extra mile. It doesn’t have to be rental properties. It could also be a side hustle or whatever you want. The point is...don’t depend on a job.
This is incorrect. You should get a better 9-5 job.
Tell that to the 40 million Americans who just lost their job. Your 1960 playbook needs some updating!
Not all 9-5 jobs are created equal. And for those 40 million Americans who just lost their jobs, you think they can all afford to invest in real estate? Likely many of them would also be renting to someone who lost their job...so then they'd have no income and more expenses with a real estate investment.

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tomtoms
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Re: Why are you NOT buying rental properties?

Post by tomtoms » Fri May 29, 2020 10:46 am

StoopieHippo wrote:
Fri May 29, 2020 9:19 am
tomtoms wrote:
Fri May 29, 2020 9:03 am
HomerJ wrote:
Wed May 27, 2020 7:43 pm
tomtoms wrote:
Wed May 27, 2020 10:07 am
7th_Diagram wrote:
Mon May 25, 2020 8:35 pm
Because I already have a job.
Having just 9-5 job is not going to get you far. You have to go the extra mile. It doesn’t have to be rental properties. It could also be a side hustle or whatever you want. The point is...don’t depend on a job.
This is incorrect. You should get a better 9-5 job.
Tell that to the 40 million Americans who just lost their job. Your 1960 playbook needs some updating!
Not all 9-5 jobs are created equal. And for those 40 million Americans who just lost their jobs, you think they can all afford to invest in real estate? Likely many of them would also be renting to someone who lost their job...so then they'd have no income and more expenses with a real estate investment.
Where did I say those 40 million Americans can afford to buy rental properties? My point is you shouldn’t just depend on a job. You need something else nowadays like a side hustle, rental properties or whatever.

StoopieHippo
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Re: Why are you NOT buying rental properties?

Post by StoopieHippo » Fri May 29, 2020 10:59 am

tomtoms wrote:
Fri May 29, 2020 10:46 am
StoopieHippo wrote:
Fri May 29, 2020 9:19 am
Not all 9-5 jobs are created equal. And for those 40 million Americans who just lost their jobs, you think they can all afford to invest in real estate? Likely many of them would also be renting to someone who lost their job...so then they'd have no income and more expenses with a real estate investment.
Where did I say those 40 million Americans can afford to buy rental properties? My point is you shouldn’t just depend on a job. You need something else nowadays like a side hustle, rental properties or whatever.
Then by your own admission, not everyone needs rental properties. A side hustle is just fine (and would personally be my choice). I'm not handy enough to fix things that break in a rental property without hiring out and I don't think I'd enjoy screening for good tenants, etc. To each their own.

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tomtoms
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Re: Why are you NOT buying rental properties?

Post by tomtoms » Fri May 29, 2020 11:02 am

StoopieHippo wrote:
Fri May 29, 2020 10:59 am
tomtoms wrote:
Fri May 29, 2020 10:46 am
StoopieHippo wrote:
Fri May 29, 2020 9:19 am
Not all 9-5 jobs are created equal. And for those 40 million Americans who just lost their jobs, you think they can all afford to invest in real estate? Likely many of them would also be renting to someone who lost their job...so then they'd have no income and more expenses with a real estate investment.
Where did I say those 40 million Americans can afford to buy rental properties? My point is you shouldn’t just depend on a job. You need something else nowadays like a side hustle, rental properties or whatever.
Then by your own admission, not everyone needs rental properties. A side hustle is just fine (and would personally be my choice). I'm not handy enough to fix things that break in a rental property without hiring out and I don't think I'd enjoy screening for good tenants, etc. To each their own.
I think this goes without saying, not everyone can or should buy rental properties.

StoopieHippo
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Re: Why are you NOT buying rental properties?

Post by StoopieHippo » Fri May 29, 2020 11:12 am

tomtoms wrote:
Fri May 29, 2020 11:02 am
StoopieHippo wrote:
Fri May 29, 2020 10:59 am
tomtoms wrote:
Fri May 29, 2020 10:46 am
StoopieHippo wrote:
Fri May 29, 2020 9:19 am
Not all 9-5 jobs are created equal. And for those 40 million Americans who just lost their jobs, you think they can all afford to invest in real estate? Likely many of them would also be renting to someone who lost their job...so then they'd have no income and more expenses with a real estate investment.
Where did I say those 40 million Americans can afford to buy rental properties? My point is you shouldn’t just depend on a job. You need something else nowadays like a side hustle, rental properties or whatever.
Then by your own admission, not everyone needs rental properties. A side hustle is just fine (and would personally be my choice). I'm not handy enough to fix things that break in a rental property without hiring out and I don't think I'd enjoy screening for good tenants, etc. To each their own.
I think this goes without saying, not everyone can or should buy rental properties.
Then I guess you've answered your own forum question :sharebeer

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tomtoms
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Re: Why are you NOT buying rental properties?

Post by tomtoms » Fri May 29, 2020 11:27 am

Do you take everything literally? You should reread my first post:
tomtoms wrote:
Wed Jan 16, 2019 2:28 pm
I am not saying your average joe can do real estate investing. But, I think if you have the money (high income, low debt) and you are street smart, you can make a lot money in real estate.

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Abe
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Re: Why are you NOT buying rental properties?

Post by Abe » Fri May 29, 2020 4:46 pm

The reason I'm not buying anymore real estate is because I'm getting older, and I'm leaning more toward passive investing now. I'm not trying to convince anyone to invest or not to invest in RE. I'm just conveying my experience over the years. A little over 40 years ago, when I was young and more ambitious than I am now, I was looking for ways to invest my money. I got a real estate license and I mentioned one day to some of the agents in the office that I wouldn't mind buying a house to rent. It wasn't long before one of the agents found a house for me to buy. It was a nice little 3 bedroom, 2 bath and in a nice neighborhood. The asking price was $32k, and there was a $29k loan on the house. So I paid $3k down and assumed the loan and rented the house with about a $50 per month cash flow. Over the years the rents increased and I now rent the house for $800 per month. It was paid off years ago, and the value of the house now is around $100k. I might add that where I live the economy is very depressed. I bought several more houses over the years with similar terms as the first one. I know that most Bogleheads in general are not keen on rental properties, and I read a lot of posts saying something like, "I don't want a second job". To me having a job is getting up every morning and going to work, putting in 8 or 10 hours a day five or more days a week. My experience over the last 40 years owning rental properties has not been like that at all. Yes, there is a certain amount of management that has to be done such as showing properties to perspective tenants plus maintenance and repairs. I have learned to screen perspective tenants before showing them the house so that I seldom have to show a house more than one time before renting. And I have people who I can call on to do repairs. Recently I have turned some of my houses over to a manager. They don't manage it like I would, but it eliminates some of the management problems for me. I wouldn't say its passive or active but somewhere in between. If I had known back when I started what I know now, I might have done things a little different but, as they say, hind sight is 20/20. I may have been better off just investing everything in Mr Bogles S&P 500 Index Fund back in the 70's, but it is what it is. The way things have worked out, my wife and I receive enough income from rentals and social security to live on plus pay the taxes on all our investment income combined and still have some left over. This allows us to let our passive investments like stocks, bonds, CD's, etc, grow without withdrawing anything from them. I don't know if this is the best strategy to take, but it's worked pretty good for us.
There is another real estate related type of investing that I got into later that is a lot more passive than rentals but still produces good cash flow. This is buying owner financed mortgages at a discount. This is basically how it works. When someone sells their house and owner finances it for whatever reason, they sometimes like to get a lump sum of cash instead of receiving monthly payments. Many times they will take a deep discount from the loan balance to get a lump sum of cash. There are many variations of this but I won't go into all that now. Back when interest rates were high, I could buy mortgages yielding up to 24%, but those days are over now. Buying mortgages is a little more complicated than buying rentals. You have to know how to use a financial calculator to discount an income stream among other things. As far as the risk, all I know is that I have never lost any money buying mortgages, and it has been very lucrative for me. This post is getting pretty long so I will end it here. Once again I'm not trying to convince anyone to do any of these things. All I'm doing is conveying my experience.
One other thing. It doesn't hurt anything to have an open mind about other types of investing. Don't just automatically say it won't work. It doesn't cost anything to check it out. You never know. You may be glad you did.
Slow and steady wins the race.

gr7070
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Re: Why are you NOT buying rental properties?

Post by gr7070 » Fri May 29, 2020 5:54 pm

Abe wrote:
Fri May 29, 2020 4:46 pm
buying owner financed mortgages at a discount.
Interesting. Curious how you find mortgages to purchase. Care to share?

As an aside not related to Abe's post:
I think I spend more time hanging up on people wanting to buy my rental property at a steal than I spend managing my property manager. ; )

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Abe
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Re: Why are you NOT buying rental properties?

Post by Abe » Fri May 29, 2020 6:01 pm

gr7070 wrote:
Fri May 29, 2020 5:54 pm
Abe wrote:
Fri May 29, 2020 4:46 pm
buying owner financed mortgages at a discount.
Interesting. Curious how you find mortgages to purchase. Care to share?

As an aside not related to Abe's post:
I think I spend more time hanging up on people wanting to buy my rental property at a steal than I spend managing my property manager. ; )
Sure. I will be away from my computer this evening, but I will respond to your post in the morning when I have more time.
Slow and steady wins the race.

gr7070
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Re: Why are you NOT buying rental properties?

Post by gr7070 » Fri May 29, 2020 6:06 pm

Abe wrote:
Fri May 29, 2020 6:01 pm
gr7070 wrote:
Fri May 29, 2020 5:54 pm
Abe wrote:
Fri May 29, 2020 4:46 pm
buying owner financed mortgages at a discount.
Interesting. Curious how you find mortgages to purchase. Care to share?

As an aside not related to Abe's post:
I think I spend more time hanging up on people wanting to buy my rental property at a steal than I spend managing my property manager. ; )
Sure. I will be away from my computer this evening, but I will respond to your post in the morning when I have more time.
Much appreciated!

rich126
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Re: Why are you NOT buying rental properties?

Post by rich126 » Fri May 29, 2020 6:27 pm

I ended up with a rental SFH due to circumstances but I'm glad I don't have any rentals now. I think if you started out small and slowly add to it while maintaining a good cash flow w/o getting over leverage it can be an excellent way to make money. If you only have a single property, especially higher end, then you don't have much diversity and if the area gets hit in a way that hurts the local economy then you may not be able to rent it out nor sell it and if you have a mortgage on it then it can be painful.

I've known a few military guys with rentals due to their moving around so frequently and getting a housing allowance. In those cases you just need to make sure you have someone to manage the property when you move out of the area.

My case was due to relocating near the bottom of the AZ market in 2011. My house was in a very desirable location and was easy to rent. It wasn't really cash positive because I wasn't expecting to relocate and had gotten a 10 year mortgage. It was more of a break even preposition. I just felt very strongly the market was going to recover some (didn't realize how much) and my income was enough that I could handle 2 mortgages if it ended up empty for a period of time.

I was lucky to find an experienced and excellent property manager and in the 8 years it was rented, it may have been vacant 3 months and most of that time was in the beginning since I moved near the Thanksgiving/Christmas holidays. The house ended up appreciating a significant amount of money, and as I had hoped, I moved back into it.

Right now I'm thankful I don't have any. I'm close to retirement and my goal is to avoid any big hits and having a decent priced SFH house as a rental falls into that category to me.

It is one of those things that if you know what you are doing you can do well.

StoopieHippo
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Re: Why are you NOT buying rental properties?

Post by StoopieHippo » Fri May 29, 2020 10:05 pm

tomtoms wrote:
Fri May 29, 2020 11:27 am
Do you take everything literally? You should reread my first post:
tomtoms wrote:
Wed Jan 16, 2019 2:28 pm
I am not saying your average joe can do real estate investing. But, I think if you have the money (high income, low debt) and you are street smart, you can make a lot money in real estate.
Ok, I guess I'll go back to using /s for sarcasm, jeez.

We're not the avg Joe, have a decent salary (though compared to the avg Boglehead, probs on the lower end? Not blue collar, but will never break $300k HHI), and we both have post-grad degrees, but considering we plan to travel after FIRE and not hang around in any one place for too long, it doesn't seem like the best move for us. We're also in Seattle, where rent prices still aren't quite as high as mortgage prices (especially once you add in HOA, etc). Maybe if we were in a less expensive part of the country, maybe it'd be something we'd look into while we build our net worth but for us in our current location? Nah, not worth it.

My parents do rental real estate and they seem to enjoy it, but they live in an area where home prices are decently low. They also do all their maintenance themselves. Just not for us.

WJW
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Re: Why are you NOT buying rental properties?

Post by WJW » Sat May 30, 2020 5:57 am

gr7070 wrote:
Fri May 29, 2020 5:54 pm
As an aside not related to Abe's post:
I think I spend more time hanging up on people wanting to buy my rental property at a steal than I spend managing my property manager. ;)
Ditto, I get several calls a week for people wanting to buy my properties. Good real estate investments are hard to come by nowadays.

flaccidsteele
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Re: Why are you NOT buying rental properties?

Post by flaccidsteele » Sat May 30, 2020 6:56 am

WJW wrote:
Sat May 30, 2020 5:57 am
gr7070 wrote:
Fri May 29, 2020 5:54 pm
As an aside not related to Abe's post:
I think I spend more time hanging up on people wanting to buy my rental property at a steal than I spend managing my property manager. ;)
Ditto, I get several calls a week for people wanting to buy my properties. Good real estate investments are hard to come by nowadays.
I agree

I get the same. Texts too. Polar opposite of what I experienced as a buyer during the credit crisis
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat

Stormbringer
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Re: Why are you NOT buying rental properties?

Post by Stormbringer » Sat May 30, 2020 7:53 am

WJW wrote:
Sat May 30, 2020 5:57 am
Good real estate investments are hard to come by nowadays.
For several years after the 2008-09 financial crisis, I was buying 3-4 properties per year at great prices. The past couple years have been nearly impossible. I was making cash offers above asking price, and losing deals to people offering even more. Buyers were getting 10 offers during the first few days on market.

Rather than overpay, I've just been stockpiling cash to see what happens. Maybe the pandemic will soften the market.
"Compound interest is the most powerful force in the universe." - Albert Einstein

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anon_investor
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Re: Why are you NOT buying rental properties?

Post by anon_investor » Sat May 30, 2020 7:57 am

willthrill81 wrote:
Thu Jun 13, 2019 10:04 am
Rental properties are a part-time job that could become a full-time job. No thanks.
+1. My parents have a rental property, dealing with tenants does NOT seem fun. I already have 1 fulltime job already!

Scuttlebutt
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Re: Why are you NOT buying rental properties?

Post by Scuttlebutt » Sat May 30, 2020 8:19 am

StoopieHippo wrote:
Fri May 29, 2020 10:05 pm
Maybe if we were in a less expensive part of the country, maybe it'd be something we'd look into while we build our net worth but for us in our current location? Nah, not worth it.

My parents do rental real estate and they seem to enjoy it, but they live in an area where home prices are decently low. They also do all their maintenance themselves. Just not for us.
You don't have to live in Huntsville, Alabama to buy a house there.

lostdog
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Re: Why are you NOT buying rental properties?

Post by lostdog » Sat May 30, 2020 8:27 am

I wouldn't want to take a chance to deal with dead beats and evictions. I'll stick with index funds.
Global Market Cap Equity/1 Year Cash/Bonds || 25x Expenses

StoopieHippo
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Re: Why are you NOT buying rental properties?

Post by StoopieHippo » Sat May 30, 2020 9:28 am

Scuttlebutt wrote:
Sat May 30, 2020 8:19 am
StoopieHippo wrote:
Fri May 29, 2020 10:05 pm
Maybe if we were in a less expensive part of the country, maybe it'd be something we'd look into while we build our net worth but for us in our current location? Nah, not worth it.

My parents do rental real estate and they seem to enjoy it, but they live in an area where home prices are decently low. They also do all their maintenance themselves. Just not for us.
You don't have to live in Huntsville, Alabama to buy a house there.
No, but I also don't want to own a house in Huntsville, AL. I'm fine with just my one job. I'm comfy with the risk level I'm at now with index funds - no need to add in potentially crappy tenants or not having tenants into the mix.

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Abe
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Re: Why are you NOT buying rental properties?

Post by Abe » Sat May 30, 2020 10:29 am

gr7070 wrote:
Fri May 29, 2020 5:54 pm
Abe wrote:
Fri May 29, 2020 4:46 pm
buying owner financed mortgages at a discount.
Interesting. Curious how you find mortgages to purchase. Care to share?
To answer your question gr7070. When I first started buying mortgages, I would run classified ad's in newspapers and local shoppers saying something like, "Are you collecting payments on property you've sold. I will pay cash for your mortgage/land contract. Call (my phone number)." When people called expressing an interest in selling their mortgage, I would go check everything out, and if everything checked out okay, I would make them an offer. I would say 90% of the time they accepted my offer. Once everything was set up, it was just a matter of receiving a check in the mail every month and taking it to the bank. Later, after I had been doing it for a while, I would occasionally get calls from banks, title companies or individuals who wanted to sell a mortgage. Sometimes I would stick up little cards in stores and public places saying, "Individual will pay cash for your mortgage or land contract." Sometimes people would call and tell me they are "making payments" on a mortgage and they wanted to know how much I would pay them. I had to explain to them that they would have to be receiving payments, not making payments before I would be able to pay them any money. I was kind of funny in a way, but kind of sad too because most of the time these people were in dire straits and desperately needed money.
Slow and steady wins the race.

gr7070
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Re: Why are you NOT buying rental properties?

Post by gr7070 » Sat May 30, 2020 11:18 am

Abe wrote:
Sat May 30, 2020 10:29 am
gr7070 wrote:
Fri May 29, 2020 5:54 pm
Abe wrote:
Fri May 29, 2020 4:46 pm
buying owner financed mortgages at a discount.
Interesting. Curious how you find mortgages to purchase. Care to share?
To answer your question gr7070.
Thanks Abe. Are you still buying up contracts?

Maverick3320
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Re: Why are you NOT buying rental properties?

Post by Maverick3320 » Sat May 30, 2020 12:25 pm

OP,

Still waiting for you to show us your real estate spreadsheet numbers. You've been telling us how awesome you have been doing - when do we actually get to see it?

WJW
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Re: Why are you NOT buying rental properties?

Post by WJW » Sat May 30, 2020 12:37 pm

flaccidsteele wrote:
Sat May 30, 2020 6:56 am
WJW wrote:
Sat May 30, 2020 5:57 am
gr7070 wrote:
Fri May 29, 2020 5:54 pm
As an aside not related to Abe's post:
I think I spend more time hanging up on people wanting to buy my rental property at a steal than I spend managing my property manager. ;)
Ditto, I get several calls a week for people wanting to buy my properties. Good real estate investments are hard to come by nowadays.
I agree

I get the same. Texts too. Polar opposite of what I experienced as a buyer during the credit crisis
Yes, loads of texts too...
Last edited by WJW on Sat May 30, 2020 12:38 pm, edited 1 time in total.

WJW
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Re: Why are you NOT buying rental properties?

Post by WJW » Sat May 30, 2020 12:38 pm

Stormbringer wrote:
Sat May 30, 2020 7:53 am
WJW wrote:
Sat May 30, 2020 5:57 am
Good real estate investments are hard to come by nowadays.
For several years after the 2008-09 financial crisis, I was buying 3-4 properties per year at great prices. The past couple years have been nearly impossible. I was making cash offers above asking price, and losing deals to people offering even more. Buyers were getting 10 offers during the first few days on market.

Rather than overpay, I've just been stockpiling cash to see what happens. Maybe the pandemic will soften the market.
Same here, haven't seen anything investable in quite some time. I see house flippers in my area working on razor thin margins.

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Abe
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Re: Why are you NOT buying rental properties?

Post by Abe » Sat May 30, 2020 12:47 pm

gr7070 wrote:
Sat May 30, 2020 11:18 am
Abe wrote:
Sat May 30, 2020 10:29 am
gr7070 wrote:
Fri May 29, 2020 5:54 pm
Abe wrote:
Fri May 29, 2020 4:46 pm
buying owner financed mortgages at a discount.
Interesting. Curious how you find mortgages to purchase. Care to share?
To answer your question gr7070.
Thanks Abe. Are you still buying up contracts?
I occasionally pick one up, but I'm not actively looking for them now. Up thread I posted that there are many variations to buying mortgages. An example would be me buying a house for say $30k cash and reselling it for $40k with me owner financing. Essentially this would be the same as buying a $40k mortgage at a 25% discount. You can do this with houses, mobile homes, lots, etc, or even personal property if you really want to get creative. After you do this for a while, you begin to see opportunities that you couldn't see before. At one time there was a government program called the "Officer Next Door Program" where repossessed HUD houses were sold to police officers for half their appraised value. If a police officer did not qualify for a conventional bank loan, I would finance for them at 14% interest. Since my loan to value was only 50%, I didn't have much risk if they defaulted. Most of them either paid me off or refinanced later when their credit record was better. If they defaulted, I would get the house for half the appraised value. So, there are a lot of ways to do this. Once again, I am not recommending any of the above to anyone. I am just conveying experiences I have had. I enjoyed doing it, but it's not for everyone. I started out replying to the OP's original post, but I seem to have gone off on a tangent. Sorry about that.
Slow and steady wins the race.

gr7070
Posts: 1146
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Re: Why are you NOT buying rental properties?

Post by gr7070 » Sat May 30, 2020 1:35 pm

Appreciate the info Abe. I seriously considered selling my previous house owner financed, but just too big too much too new.

Would be interesting to get into a small mortgage.

I'm doing some crowd funding real estate online, but that's with so little money it doesn't matter- risk or return.

Topic Author
tomtoms
Posts: 242
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Re: Why are you NOT buying rental properties?

Post by tomtoms » Sun May 31, 2020 11:01 am

Maverick3320 wrote:
Sat May 30, 2020 12:25 pm
OP,

Still waiting for you to show us your real estate spreadsheet numbers. You've been telling us how awesome you have been doing - when do we actually get to see it?
I would rather invest my money in real estate than leasing a luxury car that you can't afford.

Maverick3320
Posts: 564
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Re: Why are you NOT buying rental properties?

Post by Maverick3320 » Sun May 31, 2020 11:22 am

tomtoms wrote:
Sun May 31, 2020 11:01 am
Maverick3320 wrote:
Sat May 30, 2020 12:25 pm
OP,

Still waiting for you to show us your real estate spreadsheet numbers. You've been telling us how awesome you have been doing - when do we actually get to see it?
I would rather invest my money in real estate than leasing a luxury car that you can't afford.
I have no idea what that has to do with what I'm asking. To quote your first post on this thread:

"But, if you want to be wealthy at a young age, you have to start a business or buy rental properties. For me...I am doing both. I am not trying to impress you but just to let you know where I am coming from. I also have a high paying job so I am flushed with cash."

You're much more likely to convince people of the merits of real estate if you show us your numbers.

Topic Author
tomtoms
Posts: 242
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Re: Why are you NOT buying rental properties?

Post by tomtoms » Sun May 31, 2020 1:08 pm

Maverick3320 wrote:
Sun May 31, 2020 11:22 am
tomtoms wrote:
Sun May 31, 2020 11:01 am
Maverick3320 wrote:
Sat May 30, 2020 12:25 pm
OP,

Still waiting for you to show us your real estate spreadsheet numbers. You've been telling us how awesome you have been doing - when do we actually get to see it?
I would rather invest my money in real estate than leasing a luxury car that you can't afford.
I have no idea what that has to do with what I'm asking. To quote your first post on this thread:

"But, if you want to be wealthy at a young age, you have to start a business or buy rental properties. For me...I am doing both. I am not trying to impress you but just to let you know where I am coming from. I also have a high paying job so I am flushed with cash."

You're much more likely to convince people of the merits of real estate if you show us your numbers.
what are you going to show me in return?

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HomerJ
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Re: Why are you NOT buying rental properties?

Post by HomerJ » Sun May 31, 2020 8:52 pm

Maverick3320 wrote:
Sun May 31, 2020 11:22 am
tomtoms wrote:
Sun May 31, 2020 11:01 am
Maverick3320 wrote:
Sat May 30, 2020 12:25 pm
OP,

Still waiting for you to show us your real estate spreadsheet numbers. You've been telling us how awesome you have been doing - when do we actually get to see it?
I would rather invest my money in real estate than leasing a luxury car that you can't afford.
I have no idea what that has to do with what I'm asking. To quote your first post on this thread:

"But, if you want to be wealthy at a young age, you have to start a business or buy rental properties. For me...I am doing both. I am not trying to impress you but just to let you know where I am coming from. I also have a high paying job so I am flushed with cash."

You're much more likely to convince people of the merits of real estate if you show us your numbers.
Don't feed the troll. Come on, you've been on the Internet long enough to recognize this.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

barberakb
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Re: Why are you NOT buying rental properties?

Post by barberakb » Mon Jun 01, 2020 1:00 am

gr7070 wrote:
Sat May 30, 2020 1:35 pm
Appreciate the info Abe. I seriously considered selling my previous house owner financed, but just too big too much too new.

Would be interesting to get into a small mortgage.

I'm doing some crowd funding real estate online, but that's with so little money it doesn't matter- risk or return.
What site you investing in? I just tried groundfloor.

gr7070
Posts: 1146
Joined: Fri Oct 28, 2011 10:39 am

Re: Why are you NOT buying rental properties?

Post by gr7070 » Mon Jun 01, 2020 1:06 am

barberakb wrote:
Mon Jun 01, 2020 1:00 am
gr7070 wrote:
Sat May 30, 2020 1:35 pm
Appreciate the info Abe. I seriously considered selling my previous house owner financed, but just too big too much too new.

Would be interesting to get into a small mortgage.

I'm doing some crowd funding real estate online, but that's with so little money it doesn't matter- risk or return.
What site you investing in? I just tried groundfloor.
Groundfloor.

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AerialWombat
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Location: Cash Canyon / Cashville

Re: Why are you NOT buying rental properties?

Post by AerialWombat » Mon Jun 01, 2020 1:19 am

gr7070 wrote:
Mon Jun 01, 2020 1:06 am
barberakb wrote:
Mon Jun 01, 2020 1:00 am
What site you investing in? I just tried groundfloor.
Groundfloor.
I put $20k spread over 200 loans on Groundfloor in 2019 as an experiment. This year, I’m not reinvesting as notes mature, but rather pulling the money out. I’ve got about $12k left to go. When it gets down to $5k, I will leave that in as fun money and churn it.

Right now, half the loans I’m in are either in default or being paid late. On the notes paid back, I earned 10.2%. Only two loans so far have been completely bust, but Groundfloor made investors whole via a large credit line they can tap. Other defaulted loans get foreclosed on and Groundfloor sells the property, recovering most funds.

It’s been a fun test, but it’s not for the faint of heart.

JBTX
Posts: 6323
Joined: Wed Jul 26, 2017 12:46 pm

Re: Why are you NOT buying rental properties?

Post by JBTX » Mon Jun 01, 2020 1:55 am

tomtoms wrote:
Fri May 29, 2020 10:46 am
StoopieHippo wrote:
Fri May 29, 2020 9:19 am
tomtoms wrote:
Fri May 29, 2020 9:03 am
HomerJ wrote:
Wed May 27, 2020 7:43 pm
tomtoms wrote:
Wed May 27, 2020 10:07 am


Having just 9-5 job is not going to get you far. You have to go the extra mile. It doesn’t have to be rental properties. It could also be a side hustle or whatever you want. The point is...don’t depend on a job.
This is incorrect. You should get a better 9-5 job.
Tell that to the 40 million Americans who just lost their job. Your 1960 playbook needs some updating!
Not all 9-5 jobs are created equal. And for those 40 million Americans who just lost their jobs, you think they can all afford to invest in real estate? Likely many of them would also be renting to someone who lost their job...so then they'd have no income and more expenses with a real estate investment.
Where did I say those 40 million Americans can afford to buy rental properties? My point is you shouldn’t just depend on a job. You need something else nowadays like a side hustle, rental properties or whatever.
What does an average rental home make? Maybe $5k per year? $10k tops?

If you are netting $20k per year thats likely doing really well. For what, $20k? For people that want to go that route, that's fine, but it's pretty easy to see why many wouldn't.

And why does everybody need a side hustle? The main thing is to have a backup plan if, or when things change. Perhaps it's a side hustle. Or maybe it is a spouse with a second income. Or maybe it is living well below your means and having plenty of cushion. Or taking the time to invest in yourself, including your career, if that is the route you take. For many people the payoff of investing in their existing career is far higher than venturing into a new side hustle or rental property that anybody can do.

onourway
Posts: 2491
Joined: Thu Dec 08, 2016 3:39 pm

Re: Why are you NOT buying rental properties?

Post by onourway » Mon Jun 01, 2020 5:21 am

tomtoms wrote:
Sun May 31, 2020 1:08 pm
Maverick3320 wrote:
Sun May 31, 2020 11:22 am
tomtoms wrote:
Sun May 31, 2020 11:01 am
Maverick3320 wrote:
Sat May 30, 2020 12:25 pm
OP,

Still waiting for you to show us your real estate spreadsheet numbers. You've been telling us how awesome you have been doing - when do we actually get to see it?
I would rather invest my money in real estate than leasing a luxury car that you can't afford.
I have no idea what that has to do with what I'm asking. To quote your first post on this thread:

"But, if you want to be wealthy at a young age, you have to start a business or buy rental properties. For me...I am doing both. I am not trying to impress you but just to let you know where I am coming from. I also have a high paying job so I am flushed with cash."

You're much more likely to convince people of the merits of real estate if you show us your numbers.
what are you going to show me in return?
This is an anonymous site where people openly show their finances.

Your credibility is suspect when you won’t show them. People can (and do) make up all sorts of nonsense - especially regarding money - online and in real life.

Here’s your opportunity to show a group of financially savvy people exactly how well you are doing.

That you refuse to do so is a strong indication that your numbers likely not as good as you claim - as has happened repeatedly on this site over the years when RE investors actually show their cards.

Topic Author
tomtoms
Posts: 242
Joined: Wed Mar 06, 2013 11:56 pm

Re: Why are you NOT buying rental properties?

Post by tomtoms » Mon Jun 01, 2020 7:41 am

onourway wrote:
Mon Jun 01, 2020 5:21 am
tomtoms wrote:
Sun May 31, 2020 1:08 pm
Maverick3320 wrote:
Sun May 31, 2020 11:22 am
tomtoms wrote:
Sun May 31, 2020 11:01 am
Maverick3320 wrote:
Sat May 30, 2020 12:25 pm
OP,

Still waiting for you to show us your real estate spreadsheet numbers. You've been telling us how awesome you have been doing - when do we actually get to see it?
I would rather invest my money in real estate than leasing a luxury car that you can't afford.
I have no idea what that has to do with what I'm asking. To quote your first post on this thread:

"But, if you want to be wealthy at a young age, you have to start a business or buy rental properties. For me...I am doing both. I am not trying to impress you but just to let you know where I am coming from. I also have a high paying job so I am flushed with cash."

You're much more likely to convince people of the merits of real estate if you show us your numbers.
what are you going to show me in return?
This is an anonymous site where people openly show their finances.

Your credibility is suspect when you won’t show them. People can (and do) make up all sorts of nonsense - especially regarding money - online and in real life.

Here’s your opportunity to show a group of financially savvy people exactly how well you are doing.

That you refuse to do so is a strong indication that your numbers likely not as good as you claim - as has happened repeatedly on this site over the years when RE investors actually show their cards.
You need me to show a spreadsheet that I CREATED as prove? What incentive is there for me to try to impress people on an anonymous forum? The twisted logic.

User avatar
Sandtrap
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Re: Why are you NOT buying rental properties?

Post by Sandtrap » Mon Jun 01, 2020 8:27 am

Joylush wrote:
Fri May 22, 2020 3:03 pm
Ive been a landlord since 1986. I still have 22 single family homes left. No issues at all with tenants paying rent. You have to know how to screen well. That’s being said I’ve been knock-on-wood so incredibly lucky I’ve decided to start selling whenever anyone moves. Too much nonsense to deal with these days, emotional support pit bulls, eviction moratoriums, etc....

But if the housing market plummets again...I will likely take advantage of that deal again.
+1
R/E Development/Property Management Co. and multi family rental buildings since the late 70's.
Sold most 8 years ago but still have holdings.

Left because of the changing laws, L/T codes, and overall litigous atmosphere that effected the landlord/tenant relationships.
IE: Pet laws, abuse of ADA assist pet laws, bed bug laws, lease provision changes and restrictions, frivolous lawsuits, small claims court climate. Also, the changing climate of employee relationships and employment rules/regs which became thick and cumbersome. Often, (but not always) the landlord tenant relationship has gone from "mutually beneficial and supportive" as in the past to the more modern "adversarial and entitled relationship type". It is maybe a reflection of a change in times overall.

Still absolutely love being a businessman and R/E development, and working with tenants. Seriously "ponder" getting back into multi unit building ownership if the R/E market falls, IE: another 2008 scenario, and as a means to portfolio diversification.
But, the more I remember the valid reasons against self managed R/E Rental/Ownership business, the more I "un-ponder".

From a multi-unit buildings owner/landlord/& property management co. perspective (not SFH):
Physically owned self managed R/E residential income property ownership is a "business" that can be lucrative and rewarding, but it is not for everyone, and there is no assurance of success or reward.

j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

onourway
Posts: 2491
Joined: Thu Dec 08, 2016 3:39 pm

Re: Why are you NOT buying rental properties?

Post by onourway » Mon Jun 01, 2020 9:37 am

tomtoms wrote:
Mon Jun 01, 2020 7:41 am
You need me to show a spreadsheet that I CREATED as prove? What incentive is there for me to try to impress people on an anonymous forum? The twisted logic.
When people are open and honest and transparent they are generally trusted to be doing what they are saying they are doing. If your data was posted and the many other smart people here - many of them also RE investors - could look at your numbers and comment and ask questions, your credibility would increase.

As it stands, you're playing the same role that a long series of other RE shills have played on this site. Lots of talk. Zero details.

There are lots of successful RE owners here. The ones that gain trust are those who counsel others with a level-headed approach. As soon as people start trying to sell us something (from the opening statement of this thread - "I am only starting this thread because I was turned off to buying rental properties when I first started to read this forum. I now own several rental properties. Not only it is easier than I had expected, but I am also making a lot more money.") - we're going to ask hard questions because it doesn't pass the smell test.

So yeah, without some details most of us here aren't buying.

Topic Author
tomtoms
Posts: 242
Joined: Wed Mar 06, 2013 11:56 pm

Re: Why are you NOT buying rental properties?

Post by tomtoms » Mon Jun 01, 2020 11:59 am

onourway wrote:
Mon Jun 01, 2020 9:37 am
tomtoms wrote:
Mon Jun 01, 2020 7:41 am
You need me to show a spreadsheet that I CREATED as prove? What incentive is there for me to try to impress people on an anonymous forum? The twisted logic.
When people are open and honest and transparent they are generally trusted to be doing what they are saying they are doing. If your data was posted and the many other smart people here - many of them also RE investors - could look at your numbers and comment and ask questions, your credibility would increase.

As it stands, you're playing the same role that a long series of other RE shills have played on this site. Lots of talk. Zero details.

There are lots of successful RE owners here. The ones that gain trust are those who counsel others with a level-headed approach. As soon as people start trying to sell us something (from the opening statement of this thread - "I am only starting this thread because I was turned off to buying rental properties when I first started to read this forum. I now own several rental properties. Not only it is easier than I had expected, but I am also making a lot more money.") - we're going to ask hard questions because it doesn't pass the smell test.

So yeah, without some details most of us here aren't buying.
I don’t have any financial interest in you buying rental properties or not. I also don’t want to have the status as a “trusted” financial guru on this forum.

It is funny that you think my credibility depends on my “spreadsheets” that I supposedly have. What is going to stop you from claiming the spreadsheet is fake or my numbers are a big lie?

Real estate has made more millionaires than any other assets. Something to think about.

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VeganBH
Posts: 97
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Location: No. California

Re: Why are you NOT buying rental properties?

Post by VeganBH » Mon Jun 01, 2020 1:25 pm

Been there, done that....and don't want the 2nd job.
After 10-years, two house rentals, with perfect tenants and 100% rental/payment - hubs and I can say - NEVER again.
The last year, one home had two heritage trees fall/or begin to fall. We had to hire a crane and work through the night so the tree didn't fall completely and wipe out a house or two. Insurance paid zero (since no damage had occurred - yet - we'd be negligent if we didn't take action. Expensive year - not tenant-related/not preventable - 100% out of pocket. We earned %0.00 return that year. Just one example of many......No thank you.
We sold both homes over a year ago.....thank heavens.
"Until we extend our circle of compassion to all living things, humanity will not find peace."​ ~ Albert Sc​hweitzer

barberakb
Posts: 198
Joined: Fri Apr 21, 2017 11:14 pm

Re: Why are you NOT buying rental properties?

Post by barberakb » Tue Jun 02, 2020 12:39 pm

AerialWombat wrote:
Mon Jun 01, 2020 1:19 am
gr7070 wrote:
Mon Jun 01, 2020 1:06 am
barberakb wrote:
Mon Jun 01, 2020 1:00 am
What site you investing in? I just tried groundfloor.
Groundfloor.
I put $20k spread over 200 loans on Groundfloor in 2019 as an experiment. This year, I’m not reinvesting as notes mature, but rather pulling the money out. I’ve got about $12k left to go. When it gets down to $5k, I will leave that in as fun money and churn it.

Right now, half the loans I’m in are either in default or being paid late. On the notes paid back, I earned 10.2%. Only two loans so far have been completely bust, but Groundfloor made investors whole via a large credit line they can tap. Other defaulted loans get foreclosed on and Groundfloor sells the property, recovering most funds.

It’s been a fun test, but it’s not for the faint of heart.
default sucks, I dont mind late payments because they still pay you interest. Gonna leave it for a year or so and see what my overall return is.

Doubleeagle4me
Posts: 59
Joined: Sun Jan 18, 2015 7:03 pm

Re: Why are you NOT buying rental properties?

Post by Doubleeagle4me » Tue Jun 02, 2020 4:48 pm

Here’s my advice. Whatever you think you will make cut it in half. What can go wrong will go wrong. G luck.

cutterinnj
Posts: 345
Joined: Wed Jun 01, 2011 10:08 pm

Re: Why are you NOT buying rental properties?

Post by cutterinnj » Tue Jun 02, 2020 4:50 pm

After watching what my friends go through as landlords as well as all the craziness from the last few months, I thank the lucky stars I don’t have any investment properties.

barberakb
Posts: 198
Joined: Fri Apr 21, 2017 11:14 pm

Re: Why are you NOT buying rental properties?

Post by barberakb » Wed Jun 03, 2020 11:24 am

Doubleeagle4me wrote:
Tue Jun 02, 2020 4:48 pm
Here’s my advice. Whatever you think you will make cut it in half. What can go wrong will go wrong. G luck.
You could say the same thing about stocks...

manatee2005
Posts: 726
Joined: Wed Dec 18, 2019 9:17 pm

Re: Why are you NOT buying rental properties?

Post by manatee2005 » Wed Jun 03, 2020 11:28 am

I was thinking of buying rentals in Midwest, but after seeing the riots and cancel rent movement, no thanks.
I’ll stick with the easy money in the stock market.

Topic Author
tomtoms
Posts: 242
Joined: Wed Mar 06, 2013 11:56 pm

Re: Why are you NOT buying rental properties?

Post by tomtoms » Mon Jun 08, 2020 2:37 pm

Real estate is still going strong. Even a pandemic doesn’t cause real estate to go down.

Locked