Astoria, NYC · Member since 2014 · 13 posts · 6 votes
Hello all,
I've been reading this site on and off for a couple of years.
Seven years ago I purchased a SFH in Aurora, CO for 110K. It rented for about 900 as I slowly paid off the mortgage. I now own the property outright, Zillow has it listed for about $260,000 and I'm renting it for $1600. For many years I've had this property on auto-pilot with my manager taking care of most things while I live overseas.
However, it dawned on me recently that a $1600/month rent is nowhere near achieving the 1% rule on a $260,000 property and so I've been contemplating selling it, and 1031ing it into two new properties that add up to $260,000. I also thought it would be a good opportunity to diversify my investment by buying two properties in different locations. I plan on paying cash for both because my employment is very uncertain and so I struggle to get loans. I also have a bit saved so I could go a little over a total amount of $260,000 for the right places.
Currently I've been thinking about Orlando and/or Houston. I would also consider Cleveland (I have some friends there who dabble in REI). I'm always a bit overwhelmed when it comes to choosing cities to buy in. I grew up in Los Angeles and don't think I can afford anywhere there. But I live in Australia, (also can't afford anywhere there) and so I don't really have the ability to do tons of boots on the ground research in different cities. I've looked at turn-key companies in the likes of Chicago, Philly, KC, Indy, etc., but haven't found one that I fully trust yet.
The goal would be to pick up two SFHs that combine to rent for about $2600.
I've been reading this site on and off for a couple of years.
Seven years ago I purchased a SFH in Aurora, CO for 110K. It rented for about 900 as I slowly paid off the mortgage. I now own the property outright, Zillow has it listed for about $260,000 and I'm renting it for $1600. For many years I've had this property on auto-pilot with my manager taking care of most things while I live overseas.
However, it dawned on me recently that a $1600/month rent is nowhere near achieving the 1% rule on a $260,000 property and so I've been contemplating selling it, and 1031ing it into two new properties that add up to $260,000. I also thought it would be a good opportunity to diversify my investment by buying two properties in different locations. I plan on paying cash for both because my employment is very uncertain and so I struggle to get loans. I also have a bit saved so I could go a little over a total amount of $260,000 for the right places.
Currently I've been thinking about Orlando and/or Houston. I would also consider Cleveland (I have some friends there who dabble in REI). I'm always a bit overwhelmed when it comes to choosing cities to buy in. I grew up in Los Angeles and don't think I can afford anywhere there. But I live in Australia, (also can't afford anywhere there) and so I don't really have the ability to do tons of boots on the ground research in different cities. I've looked at turn-key companies in the likes of Chicago, Philly, KC, Indy, etc., but haven't found one that I fully trust yet.
The goal would be to pick up two SFHs that combine to rent for about $2600.
Any advice would be much appreciated!!!
Jonathan,
With all due respect, it doesn't appear that you know what you're doing. I think you're lucky that you've experience investing in real estate has been positive...
I suggest that you put in the time and effort to learn the fundamentals of real estate investing. Initially, to begin selecting a market, you should start by learning about what contributes to demand of real estate...namely population growth forecasts and job growth forecasts. Then there are numerous other state, MSA, and local variables that you should be examining to identify what market to invest in.
Even before you get to this, you should spend much more time specifically definining your investment goal, which will provide guidance on what to consider when conducting market research... for example, if you're looking for cash flow, you BETTER conduct an analysis of price-to-rent ratios and average cost of housing.
1. Investment Goals: EVERYTHING you do as an invest should tie back to your specific goals. If they don't you are wasting your time!
2. Market Research (Region: Population Growth Forecasts, Job Growth Forecasts)
3. Market Research (State: pop / job)
4. Market Research (MSA/City) (pop/job forecasts, price-to-rent ratios, city masterplan, path of growth, vacancy rates, average cost of housing, crime rates, demographics, etc...)
Next... What customers are your looking to serve? Why? Where do they work? Where do they spend free time? How much income do they make? What are their living preferences? Can you acquire properties at a good price that rent high enough to generate your return (cash flow/appreciation)?
There are lots of other questions that I don't think you even know to ask...but this should give you a start.
Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
9y
Jonathan MacMillan , what turnkey companies have you spoken with and what was it about each that made you not fully trust them? I'm considering turnkey in a few areas and interested in your experience. Feel free to message me directly if you don't feel comfortable posting that on forum.
Real Estate Agent · Chicago, IL · Member since 2016 · 283 posts · 71 votes
9y
Jonathan would love to help answer any kinds of questions you may have I work a lot with turn key rentals in Chicago. So basically two properties that individually gross 1300 is what you are looking for then? Many 3 bed room homes here went well above that here. Would love to discuss!
Specialist · CHICAGO · Member since 2015 · 680 posts · 650 votes
9y
Look deeper into the bowels of the Midwest. Everyone is trying to cherry pick deals the places you are listing. I don't know enough about 1031's to know if you could split it like that but you have owned them long enough that you won't get killed in taxes (and hopefully you have been depreciating it all along on your taxes.
I have some other cities that no one is talking about yet. I have a great system with my PM there. He handles EVERYTHING and has connection in all the right places to know the happenings in the market that others aren't privy to. Reach out to me if interested and I can tell you more.
I just bought a beautiful duplex for $43k and I will be collecting $1450/m rent after about $10k in renovations. NO this is not in Detroit, or the ghetto, or a war zone. Its a blue collar city with a TON of economic growth!!
I lived overseas as a firefighter/medic serving the military in 2005/06. Thats where I got my start to investing. I understand how hard it would be to have to through blind trust into someone w your cash. I'd like to think I can help and have a Security Clearance that keeps me paying all bills, keeping a clean nose, and running a business on the straight and narrow. Let me know if I can guide you a little bit, offer assistance, or if you'd like to hear more.
I have looked into Chicago from time to time but always get scared away by the murder rate (750 people just last year). But I'm willing to have a conversation about it.
As for a $53k investment earning 1450 a month in rent. It basically sounds too good to be true. But I know these types of things happen, especially to the savvier members of this group, so I'm ALSO willing to have a conversation about that!
Investor · Saratoga, CA · Member since 2016 · 22 posts · 12 votes
9y
Look at Macomb County, MI. I'm happy to introduce you to my agent as well. For around $110K you can get $1200 in rent. For around $140K you can get $1500 rent. ~8-9% ROI.
Residential Real Estate Broker · Oswego, IL · Member since 2015 · 2 posts · 0 votes
9y
Hi Jonathan,
The hot mess that is Chicago has actually strengthened and is going to continue strengthening some of the areas around it. A lot of people fed up with the crime and never ending tax increases are moving west and that's a trend that probably isn't going to slow down anytime soon unfortunately. I am a Realtor and property manager in the far southwest suburbs and I work with a number of investors who are getting returns you mentioned and are doing so with high quality renters. Let me know if you have any questions or want to feel out the area a little more. Good luck wherever you go, sounds like you are on the right track!
Lender · Seattle, WA · Member since 2013 · 64 posts · 20 votes
9y
Hey Jonathan MacMillan I'm an agent in Orlando and could definitely assist with finding you a rental property. Are you only interested in SFHs or would you consider condos near Disney? Both work in Orlando but you may be able to get some great bang for your buck with weekly rentals next to the theme parks (in approved areas of course). Let me know if you want help looking into Orlando a little more in depth.
Astoria, NYC · Member since 2014 · 13 posts · 6 votes
9y
Hey @Mike Waseen, I'd love to chat further with you. I held my last SFH for 7 years and so have no problem doing that again, which is to say I obviously hope any place I buy ends up appreciating, but am also okay if that doesn't happen overnight so long as there is solid cash flow. And if the returns are as good as people say in Chicago (in moderately good neighborhoods) than I would be happy to talk further about working together.
And @Scott Alfano as for Orlando, I haven't really done any research into renting properties as Vacation rentals, but I know some people have done that with great success and so I would be happy to have that discussion as well! Would $130-140k be enough to enter that market? I always imagined that would be quite a bit higher. But let's chat!
Specialist · Indianapolis, IN · Member since 2014 · 670 posts · 352 votes
9y
@Jonathan MacMillan there are many opportunities across the nation, it finding a trustworthy provider that is the real goal. Have you considered new homes as an option for your turnkey rental? The beauty of that model is the 5 year warranty on the house, and a minimal monthly allotment for maintenance reserves which help boost your monthly cashflow. Oklahoma City is a market that is a bit off the radar but has a nice upside and prices are very competitive. We have done well in many midwest markets. Happy to assist if you need further input.
Real Estate Investor · Kansas City, MO · Member since 2015 · 222 posts · 121 votes
9y
Hey @Jonathan MacMillan! Congratulations on your achievements thus far! Colorado market sure did take off! I am boots on the ground here in Kansas City and have many turnkey properties that fit your criteria!
Lender · Orlando, FL · Member since 2009 · 121 posts · 74 votes
9y
@Jonathan MacMillan Don't let the Chicago media scare you off. Those issues being faced are neighborhood and area specific. That said your search should be directed to secondary and tertiary markets for best values especially when you must consider being prepared for the next correction. As the saying goes you make your money when you buy it, and if you do so correctly you will be in fine shape regardless of market cycles. Kansas City is an exceptional rental market as mentioned above, and while you have thought about Orlando vacation rentals are inconsistent in general so be carefull, you may find better values in the Tampa market as you may be able to acquire 3 or 4 viable rental properties with the funds you are referencing. Go to homes4income.com speak with Stephany or Jorge there. As a lender I have funded an abundance of assets for their clients over several years and they have proven credible, reliable transparent and full service (turn-key). Jacksonville Florida also offers immense opportunity. There are some nice spots still in Arizona that you may benefit from as well. Also keep in mind that finding another "home-run" as you did in Colorado may not be that easy as the market continues to trend upward and foreign based investors buying at retail in many areas driving prices beyond reason in many cases. Outside of Nashville, TN is a booming area also and a host of vendors there to help you re-position yourself.. Continue to conduct your diligence thoroughly & happy hunting.
Investor · Roseville, CA · Member since 2009 · 1k+ posts · 583 votes
9y
If you do some digging, you can get 1.5% rents to price in a few midwest cities. I am not talking about ghetto areas either. I get emails all the time from out of state people who send me properties getting 1.5% rents to price. good luck in your search.
We are a huge fan of the Detroit area. That said, with any investment there are good and poor opportunities block-to-block, house-to-house. It is really important to have a great team that you can trust in the area. We specialize in turnkey investments and property management, so if you have any questions just let us know.
I've been reading this site on and off for a couple of years.
Seven years ago I purchased a SFH in Aurora, CO for 110K. It rented for about 900 as I slowly paid off the mortgage. I now own the property outright, Zillow has it listed for about $260,000 and I'm renting it for $1600. For many years I've had this property on auto-pilot with my manager taking care of most things while I live overseas.
However, it dawned on me recently that a $1600/month rent is nowhere near achieving the 1% rule on a $260,000 property and so I've been contemplating selling it, and 1031ing it into two new properties that add up to $260,000. I also thought it would be a good opportunity to diversify my investment by buying two properties in different locations. I plan on paying cash for both because my employment is very uncertain and so I struggle to get loans. I also have a bit saved so I could go a little over a total amount of $260,000 for the right places.
Currently I've been thinking about Orlando and/or Houston. I would also consider Cleveland (I have some friends there who dabble in REI). I'm always a bit overwhelmed when it comes to choosing cities to buy in. I grew up in Los Angeles and don't think I can afford anywhere there. But I live in Australia, (also can't afford anywhere there) and so I don't really have the ability to do tons of boots on the ground research in different cities. I've looked at turn-key companies in the likes of Chicago, Philly, KC, Indy, etc., but haven't found one that I fully trust yet.
The goal would be to pick up two SFHs that combine to rent for about $2600.
Any advice would be much appreciated!!!
Hello,
it sounds like you are off to a great start! Cleveland is a wonderful area with a ton of REI opportunity. Best bet would be to connect with some professionals in the markets you are looking at. Make sure to do your research on the company or the agent to make sure they are the best fir for you!
Good luck! Feel free to send me a message with any questions.
I've been reading this site on and off for a couple of years.
Seven years ago I purchased a SFH in Aurora, CO for 110K. It rented for about 900 as I slowly paid off the mortgage. I now own the property outright, Zillow has it listed for about $260,000 and I'm renting it for $1600. For many years I've had this property on auto-pilot with my manager taking care of most things while I live overseas.
However, it dawned on me recently that a $1600/month rent is nowhere near achieving the 1% rule on a $260,000 property and so I've been contemplating selling it, and 1031ing it into two new properties that add up to $260,000. I also thought it would be a good opportunity to diversify my investment by buying two properties in different locations. I plan on paying cash for both because my employment is very uncertain and so I struggle to get loans. I also have a bit saved so I could go a little over a total amount of $260,000 for the right places.
Currently I've been thinking about Orlando and/or Houston. I would also consider Cleveland (I have some friends there who dabble in REI). I'm always a bit overwhelmed when it comes to choosing cities to buy in. I grew up in Los Angeles and don't think I can afford anywhere there. But I live in Australia, (also can't afford anywhere there) and so I don't really have the ability to do tons of boots on the ground research in different cities. I've looked at turn-key companies in the likes of Chicago, Philly, KC, Indy, etc., but haven't found one that I fully trust yet.
The goal would be to pick up two SFHs that combine to rent for about $2600.
Any advice would be much appreciated!!!
Jonathan,
With all due respect, it doesn't appear that you know what you're doing. I think you're lucky that you've experience investing in real estate has been positive...
I suggest that you put in the time and effort to learn the fundamentals of real estate investing. Initially, to begin selecting a market, you should start by learning about what contributes to demand of real estate...namely population growth forecasts and job growth forecasts. Then there are numerous other state, MSA, and local variables that you should be examining to identify what market to invest in.
Even before you get to this, you should spend much more time specifically definining your investment goal, which will provide guidance on what to consider when conducting market research... for example, if you're looking for cash flow, you BETTER conduct an analysis of price-to-rent ratios and average cost of housing.
1. Investment Goals: EVERYTHING you do as an invest should tie back to your specific goals. If they don't you are wasting your time!
2. Market Research (Region: Population Growth Forecasts, Job Growth Forecasts)
3. Market Research (State: pop / job)
4. Market Research (MSA/City) (pop/job forecasts, price-to-rent ratios, city masterplan, path of growth, vacancy rates, average cost of housing, crime rates, demographics, etc...)
Next... What customers are your looking to serve? Why? Where do they work? Where do they spend free time? How much income do they make? What are their living preferences? Can you acquire properties at a good price that rent high enough to generate your return (cash flow/appreciation)?
There are lots of other questions that I don't think you even know to ask...but this should give you a start.
I've been reading this site on and off for a couple of years.
Seven years ago I purchased a SFH in Aurora, CO for 110K. It rented for about 900 as I slowly paid off the mortgage. I now own the property outright, Zillow has it listed for about $260,000 and I'm renting it for $1600. For many years I've had this property on auto-pilot with my manager taking care of most things while I live overseas.
However, it dawned on me recently that a $1600/month rent is nowhere near achieving the 1% rule on a $260,000 property and so I've been contemplating selling it, and 1031ing it into two new properties that add up to $260,000. I also thought it would be a good opportunity to diversify my investment by buying two properties in different locations. I plan on paying cash for both because my employment is very uncertain and so I struggle to get loans. I also have a bit saved so I could go a little over a total amount of $260,000 for the right places.
Currently I've been thinking about Orlando and/or Houston. I would also consider Cleveland (I have some friends there who dabble in REI). I'm always a bit overwhelmed when it comes to choosing cities to buy in. I grew up in Los Angeles and don't think I can afford anywhere there. But I live in Australia, (also can't afford anywhere there) and so I don't really have the ability to do tons of boots on the ground research in different cities. I've looked at turn-key companies in the likes of Chicago, Philly, KC, Indy, etc., but haven't found one that I fully trust yet.
The goal would be to pick up two SFHs that combine to rent for about $2600.
Any advice would be much appreciated!!!
Jonathan-
Connect with @Tom Ott he is an amazing resource for TK in Ohio.
Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
9y
Hi Jonathan,
I hear ya on wanting a higher ROI. I have investors that I deal with from Australia, I need more so I can find a reason to go there on vacation! LOL
I will say this, the reason your deal is so hands off is because it is in a great area and does not give a huge return. Be careful on jumping into a massive ROI deal, because it may be more headaches than it is worth.
The Cleveland market is one of the hottest places on the planet to invest. It is really a great place to get a high rent for a low investment, but appreciation is limited to some certain areas. There are some trendy areas that I love dealing in because of the up side. I just sold one for 50k that literally is a couple years away from being a 200k deal with about 50k into it. However you must know the area to get that.
If ya ever pop into town, would be happy to grab a coffee.
Rental Property Investor · Broken Arrow, OK · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Jonathan MacMillan You could easily find two SFRs in our area that fit your needs.
Median Home Price in Oklahoma is $113K, but in the better markets its more in the $150K-$190K range and you can find good deals in the $125K-$150K range. Rent rates in these top markets tend to be in the $1100-1500 range and are in high demand. The best markets in the state for rentals are: Jenks, Bixby, Broken Arrow, Owasso, Norman, Moore and Edmond. Some areas of Tulsa and OKC also have good pockets.
I found an occupied duplex a few weeks ago that's renting for $600 per side ($1,200) and was for sale for under $90K. There's lots of deals like that in the area. Good luck!!
Realtor · Oklahoma City, OK · Member since 2016 · 40 posts · 5 votes
9y
Absolutely right my fellow Oklahoma investors! Ideal buy and holds all over the state, rentals are the thing and people are willing to pay $2000 monthly rent for the right location. And true- a turn key property will run $150kish for those renters. If you'd like Jonathan I can hook you up with a very reputable rehab company and property management in the Oklahoma city area, after we locate your properties :-) give me a shout, I'll do your foot work!
Scottsdale, AZ · Member since 2015 · 8 posts · 1 vote
9y
The Phoenix AZ market is supposed to be the #1 market in the country for 2017. Definitely a place to keep an eye on and pick up some deals. Let me know if you need some help.
