Investor · Santa Cruz, CA · Member since 2017 · 61 posts · 50 votes
So, my wife and I have been have been saving for a while, which isn't really easy. (Two kids, tuition, CA prices..) But we do live a pretty thrifty lifestyle. 2001 ford truck for me and 2010 Pilot for the Mrs. All paid off and very little CC debt. Mortgage on our PR is $1500/mo.
That said, where would you park your $40k? Strongly feeling this bubble is near the popping point, and don't want to make the same mistake I've seen so many make. I'm really getting interested in MF syndication.
I'm not you so I'm answering this from my perspective. I had around $60,000 to invest.
I bought 3 cheap/low income houses paying cash. I'm bringing in $1,650/month and own the properties free and clear. Used that money and just put a 4th one under contract that will close those week which will bring my monthly income to $2,350/month. Once again I own everything free and clear. Already have my 5th one lined up as well. Just going to wait another month to save up another $2,000 that I can use towards repairs on the 5th house.
Thanks @Robert DeForge This is a great thread. Thanks for sharing your stories and opinions. Those of us in California watch with envy the deals across the country...people getting work done for $14k that would cost $90k here, and people buying property for $40k that would cost $1M in CA.
@Jonathan R. Can we just import those workers for time and materials for a few weeks? Then, they have to leave, of course, because the crowds are what drive the prices so high.
Next, I'm going to call someone "fancy clipboard guy" just because its such a great image. Thanks @Aaron Mazzrillo
I've bought several SFH in last year at auction.com and another auction for about 35 and renting for avg $800 mo. With more than 50 percent equity built in. I've done improvements and can resell or refinance. Hubzu is another auction site or Hud homes are Also a resource for value homes.
I've bought several SFH in last year at auction.com and another auction for about 35 and renting for avg $800 mo. With more than 50 percent equity built in. I've done improvements and can resell or refinance. Hubzu is another auction site or Hud homes are Also a resource for value homes.
Wow! That's a great return. I've thought about auctions but never looked into it.
What's the process? Is it pretty straight forward? Is there a lot of competition? What are the downsides?
I registered on auction.com The experience has been mixed. I lost a few because I didn't get all the paperwork in time. You have to have your funds and LLC paperwork lined up.
Once registered, I pick an area and then follow some auctions that may fit my goals. They will automatic bid up to a certain amount, and sometimes the reserve is not listed so you don't know how much they want. In some auctions, there is no reserve, so it will sell but with a buyer's premium of 5% or $1,500.
Hello Robert. Sorry for the delay. I just noticed I can get mentions. I can do you one better. Let me give you a few zip codes that are in good areas. 48224 (I lived in this area for over 20 years, East English Village), 48235, 48219, 48221, 48227. Let me know if you have any other questions.
When the above poster claims he is "parking his money" he doesn't know it, but he means permanently. I don't care what those Midwest houses appraise for. Just cuz some guy with a clipboard and fancy paperwork tells you the house is worth $65K doesn't mean you'll find a buyer ready, willing and able to pull the trigger on that deal and when the dust settles, that sales price is likely to be much lower than fancy clipboard guy claims it should be. That house will be on the market, vacant, along with lots of other on the market, vacant, houses all looking for the same low income, subprime buyer who is most likely more happy being a renter. I've got two of those awesome deals left in my holdings. Awesome deals I did when I didn't know what I was doing. Now they are anchors producing crappy returns and I almost can't give them away. As they say; when you lie down with dogs, you get up with fleas.
If I only had $40K to work with, I'd find a proven flipper in a market very close to me and I'd lend him/her the money secured by real estate, using escrow and getting a lender's title policy. I've done lots of these exact small loans when I was starting out and they were the only early on deals that paid off very well again and again.
@Aaron Mazzrillo, while I too have done very well by being lucky with timing in a high value market, not everyone has the ante for that game, especially in areas with low or negative cashflow. If I could buy a property for $15k that rents for $600 like @Derrick E. I'd jump on it. At that cashflow who cares about appreciation?
That's how I feel with all the homes I buy. With the cash flow I am getting I don't care if it ever appreciates as long as I can keep it rented (which has been EXTREMELY easy to do.)
Yes, ideally as long as the property value doesn't depreciate (nobody wants that) then cash flow is king. Depending on the purchase price cash flow could easily pay for the property one, two, three times over.