I want to buy a rental now, my husband wants to wait a see.

183 Replies

Originally posted by @Stefanie Jensen :

@Jeff W., the best part of this conversation is that my husband DOMINATES at Monopoly! He's much more hesitant with real money. He'll come around, it's just taking way too long for my taste. He was s okay with 1 rental property a year. I might have to slow my roll.

 Instead of monopoly, change the game to that cash flow game...maybe that will get him to think more like an investor?

Originally posted by @Stefanie Jensen :

3 bed 3bath townhouse, good condition, built in 1998.

Currently rents for $1,000, tenant wants to stay for at east two more years. Could easily raise rent to $1075 or $1,100. 

 Asking price is $150,000. It will sell closer to $145,000. The seller is paying buyers agent 3% commission. I am an agent, so that money goes to me, $500 to my broker.

I have a nice down payment. The mortgage, including HOA and taxes, will be about$600 per month. Tentant is an older lady who qualifies for section 8 housing vouchers.

 Doesn't make even a 1% rule let alone the 2% that is constantly talked about. I would pass...maybe that's why your husband isn't motivated to pull the trigger?  Because it's not a good deal?

Originally posted by @Account Closed :

 Its quite possible Car Loans, Student Loans and Credit Card debt are todays equivalent 2007s Mortgage debacle.    Wall Street are lending cars to Deadbeats left and right.  Student are drown ing and Dave Ramsey empire is BOOMING!

The difference is that car loans are not large enough to bring down the economy the way that home loans were. I imagine it's the same case with credit cards. However, student loans are the size of a mortgage for some borrowers. Hmmmm.

@Joe Splitrock

Thank you for seeing the underlying prejudice that some people have against women REIs. It's even worse for me because I'm a hairdresser by trade and I serve drinks a couple nights a week for a nice restaurant.  I am an agent now, but my jobs make me plenty of money and I love my jobs. These are fun jobs that bank on personality and communication.  You know what they say, if you love what you do you'll never work another day in your life. That's why am adding real estate, I love it, I'm addicted to it. Thank you for seeing the whole situation for what it is. It's totally different when it's a woman trying to convince her man. 

I'm not sure why this thread has turned so ugly. I've removed a couple of inappropriate posts. If you continue to bash this investor, I WILL deactivate your account.

Disagreement and R-E-S-P-E-C-T-F-U-L debate is absolutely welcome on my site, but personal attacks and trolling are NOT.

Originally posted by @Mindy Jensen :

I'm not sure why this thread has turned so ugly. I've removed a couple of inappropriate posts. If you continue to bash this investor, I WILL deactivate your account.

Disagreement and R-E-S-P-E-C-T-F-U-L debate is absolutely welcome on my site, but personal attacks and trolling are NOT.

 Thank you!  

@Joe Splitrock if we may get back to the business, I totally agree that 3% down is only for residential owner occupied properties, however, people get tenants while living in the house and such arrangement is possible.

Recently, my tenants bought a duplex and they live in one side and rent another one. More of that, the owner is only one of roommates and the other pays him rent as well. They were great tenants, lived in my cheap rental to save money but was able to get 3.5% down loan - which now is paid by tenants.

All my deals are in Cleveland and I don't think it's a good idea invest in what you don't know. Stefanie will find good deals in her backyard - it just will take some time. This game is endless so - no hurry

As for @Stefanie Jensen I apologize if I said some unpleasant things: I'm counting numbers first and foremost and all my comments were about the property you gave us as an example.

I find the comments about your appearance and what you do for living inappropriate, too. Don't get upset that people noticing that you're beautiful, happily married and successful- there are always someone somewhere will say something. They can't get you unless you notice them. Ignoring is the best treatment for any kind of sexism. 

@Irina Belkofer thank you for all your feedback. I respect your opions  and it seems clear that you know your stuff. 

@Irina Belkofer so you are saying just last month, in a decent Cleveland neighborhood you purchased a property for $13K, rehab for $7K and rent for $900 per month? Forget the 1% or 2% rule, you hit the 4.5% rule! I don't know the Cleveland market, but that seems crazy good. Please share how you found those deals. Auction, postcards, MLS?

I know you are saying every market has deals like that, but it would be helpful to explain how you find them. I would appreciate if you would share your strategies with the community.

Does it take 2 people to buy a house? Sounds like an excuse to me. I buy rent homes with or without my spouses approval. It does help that she's onboard.

@Stefanie Jensen can you share details on the deal you are trying to buy?

Originally posted by @Joe Splitrock :

@Irina Belkofer so you are saying just last month, in a decent Cleveland neighborhood you purchased a property for $13K, rehab for $7K and rent for $900 per month? Forget the 1% or 2% rule, you hit the 4.5% rule! I don't know the Cleveland market, but that seems crazy good. Please share how you found those deals. Auction, postcards, MLS?

I know you are saying every market has deals like that, but it would be helpful to explain how you find them. I would appreciate if you would share your strategies with the community.

Yes, in August, I bought a townhouse for my client for $13K and it needs work. I bought it on Sheriff sale, they conducted every Monday, these are really competitive right now. Min bid was 11K, I've got for $13K.

Now, the expense part includes HOA- $171/mo, taxes~$80/mo, insurance $13/mo, city rental permit -$17/mo, let's say $280/mo

If rent is $880 (for easy calculations, but somewhere $850-900), cash flow is $600/mo, $7200 per year.

This one might cost more in repairs because it was vandalized and water damaged the first floor ceiling, so maybe $9-10K instead of $5-7K. But kitchen is decent, maybe washer/dryer could be used, d/w looks decent, too.

Let's count the numbers: price all in will be $23K, NOI-$7200, so ROI=31%.

Now, CapEx will be on the owner - he finance all cash and don't do reserves. He will need PM - I'll charge him $100/mo plus first month rent. Eventually, when he lives in Cleveland - he might prefer to do it himself or his wife would, right now it's $1200/year.

Also, he will need some accounting in QB - another $50/mo, $600/year - to get all his numbers to his CPA at the tax season.

Some maintenance will be needed - usually it's $30-50/mo on average but sometimes new units don't need attention for a year or two.

So his return will be: $(7200-1200-600-360)/23000=22%

Not too bad considering that he does only turnaround (1-2mo) and then don't even live in the country.

Of course, HOA is a bad side of the deal but SFR cost more to buy, more expensive to rehab and competition right now is crazy. In July I bought a SFR for another client - it was $53K, but very good area and possible to flip or to rent - both will make good numbers.

Rent will be $1400/mo, flip will yield at least $50K ($145-160K ARV) depends on the finishes.

It won't be 20% ROI on rent but it's B neighborhood and very desirable area for baby boomers to live on retirement. It's ranch, all brick, 3bed/2bath, 2 car attached garage, back yard facing metro park- I'd take it myself any time.

Sorry, too many numbers...lol....words don't make as much sense as numbers for me

This seems to be a classic marital problem. I use the motto when 2 people can't agree bring in a third person. Sometimes it's a councilor. In this case my creative solution is find a real estate mentor and have lunch with them,you and your spouse. Have them confirm your numbers and answer his objections.

@Stefanie Jensen - I think your husband may like the fact that he is the big breadwinner and Real Estate is just a side thing to keep the peace in the family. Find a deal that is small impact. Condo or something very inexpensive and low risk. It could be fear of the unknown. Whatever the reason you guys need to do it together. Love and marriage is more important than $. If it helps you any my wife was the same way. We had ~50k saved and wanted to invest in something other than the stock market. I bought the books and read them and shared with my wife. She was very reluctant so we started off small. Bought a 2bd/2bath condo and she fixed it up. I named her the President of our LLC and now we are looking at our 7th property. Our income is ~4k month. Starting to get very real... Good Luck!

figure out a way to buy with other people's money 100%. 

This post has been removed.

With the vast variety of loans that allow you little money down or no money down (although risky) your purchasing with out pouring your life savings into the property.

This post has been removed.

 The deal sold, just like I knew it would. But it's very interesting to see how this is all playing out. At least we all get a clear picture of the few jerks who troll this forum page. 

 To all the classy men and women that responded, thank you very much. I will take all of your advice into consideration for sure.

Thoughts:

1. I'm really surprised at how many jerks have come out of the woodwork on this thread. What a poor way to treat a new member. You can have another point of view without being an ***.

2. I suspect a lot of women have this problem. If they have both contributed to the household, there should be serious consideration given to the proposals. Of course there might be more to the story but if you think this kind of chauvinism isn't out there, just look at the forum makeup, or the composition of podcast guests.

3. The deal that you posted up doesn't look great on the surface. That may be the reality of your market, but in my market I would be unlikely to consider anything that was renting for less than 1% monthly (purchase price+rehab x .01). 

4. If your husband is on board with starting slow, i.e one per year, then start with one. One is better than none, if it's a worthwhile deal. If you can make one work, it would give him more confidence on moving forward.

Originally posted by @Account Closed :

I knew this wasnt about RE @ all.

We have a troubled woman in a troubled marriage calling out for help. She is claiming SEXISM by hubbie and she may be right. She could bring home the bestest ever deal and he wouldnt be too enthused.

Lets face it an attractive middle age woman should not be JELLOing( think how cocktail babes sashay in their job) her way to big bucks. She should have given it up when first child was born.

A middle aged man should NOT have to bear the pressure of Said wife flirting and whatever else she does to make money. Its all about respect and the respect should go both ways.

Sorry about making you out your life here. Should have kept it at your DEAL.......lol. I just thought your first post was a bit strange.

BTW your deal isnt that bad, deep down i think it has some merit. I was just flirting with ya.

 They see me trollin, they hatin. Your dot-dot-dots are a dead giveaway. Let her be, He who hung... lolz

I'm very simular to your situation he is W2 I'm a Realtor but a few years removed from it. I'm the one who loves investing my hubby doesn't care to much. He does like the renovations. He won't read Rich Dad Poor Dad and will play cash flow if I make him. What we found works is when I find deals I'll run them by him and because he is more cautious if he says no we don't buy it. At first this was hard but the more deals I'd run by him the more he felt comfertable.
I hit send before I finshed. We also have rules set up to help him feel more comfortable. Each property has 20% equity. Which we have done by forced appreciation with renovations and buying low. Each property we could drop rents by 25% if needed before we hit a break even spot. Enough savings to cover the mortgage for a while. It sounds like your living below your means so another thing we do is live off my husbands income and invest mine minus vacations. The last few years that has allowed us to invest 60% of our income. Your numbers rent vs purchase for Utah are pretty good. It's rare to see a 1% rule property our market is to strong. Get on the wholesalers lists there are a lot who would love a buyer in Ogden. Last thing: some of the best Realtors I know were servers once. It's not as easy job serving and putting up with those you take care of. I'm sure that will help you have the thick skin you need to be successful.

@Stefanie Jensen My husband was a little reluctant even after we had owned our first investment property for a little while.  It wasn't until I introduced him to a real estate agent who owned 19 properties and was basically financially independent in his mid 20's that he really came around.  We went out to dinner one night to talk about real estate, not necessarily investing, but the topic turned to that.  He said something like, "one property won't change your life, but ten will."  Somehow that really got through to my husband, and last year we more than doubled our passive income, even though he thought it was impossible.  Now he is totally on board and listens to the podcast every week!  You mentioned that your husband was okay with one investment property per year.  I would say to start with that, and then try and meet up with some other successful investors in the area for dinner or lunch.  He might just need to hear it from someone else, a real person in the area that is making it work.  My real estate agent friend now owns around 28 properties.  Most were brand new townhomes bought in utah county that he didn't make awesome returns to start out with.  You don't have to make the 1% rule on every property to be successful!  The deal you posted, repeated over and over would get you far down the path of financial independence!

Stefanie, write the number down on a paper pad and show him the expect cash on cash return using your best estimates for rents and maintenance etc. and expected down payment etc.  That return will likely draw his attention as he is a saver, and savers are currently getting miserable returns on fixed-rate investments such as bonds.  You also may want to mention to him that you are also diversifying your collective investment portfolio risk against a historically high stock market (in terms of P/E etc.).  In essence, you are proposing to guard your collective investment pool.  In addition, you may want to add that you have the ability to increase rents and get the benefit of price appreciation.  Finally, it is an investment that YOU control the outcome in.  Tell him that you will do one and wait to see the outcome.  My sense is that he will cautiously yield to your request at first.  When you go hit that home run, he may not get into the business with you, but he will cheer you on.  My wife is not in it with me, but she acknowledges and appreciates the extra income and wealth built from the rental property business.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.