Loveland, CO · Member since 2008 · 1k+ posts · 123 votes
18y
Tim is onto the real deal. I used to get accused of "picking nickels out of horse**** while wearing boxing gloves" by some of my "smart" (ie;employed by Fortune 100 employer) friends.
I always told them; "I get love at home, I do this for MONEY".
I once met a guy on a SFO-DFW flight who was making his monthly trip to the Dallas area to "manage" his rental properties. It turned out his rental properties were about 4 small strip centers in "not great" parts of town. Each had a package store, check cashing spot, beuaty/nail place etc-you get the idea.
Anyway he'd fly down once a month, drive his rental to his bank and get his 9MM out of his safety deposit box, go collect all his rent, ALWAYS ALL PAID IN CASH, OFTEN IN SMALL BILLS. Go to the bank and make his deposit and fly back to San Francisco. He had bought these places in the '80s downturn in TX and was minting money on them.
I'm sure most of his neighbors thought he was just an "ordinary businessman".
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
18y
Do you mean low valve or low value?
I invest in low "price point" properties that have a very high value to me. I'm out the door at about $8-10,000 per house after closing and repairs, get $500-$700 a month in rent and they appraise out at $50,000 per house. The multis are generally about the same per unit except the appraisal generally runs $30,000 per unit. I'm not smart enough to make overpriced property cash flow well. :wink: Also, I really don't learn much or do much else beyond this. Don't need to. Don't want to.
Loveland, CO · Member since 2008 · 1k+ posts · 123 votes
18y
Tim is onto the real deal. I used to get accused of "picking nickels out of horse**** while wearing boxing gloves" by some of my "smart" (ie;employed by Fortune 100 employer) friends.
I always told them; "I get love at home, I do this for MONEY".
I once met a guy on a SFO-DFW flight who was making his monthly trip to the Dallas area to "manage" his rental properties. It turned out his rental properties were about 4 small strip centers in "not great" parts of town. Each had a package store, check cashing spot, beuaty/nail place etc-you get the idea.
Anyway he'd fly down once a month, drive his rental to his bank and get his 9MM out of his safety deposit box, go collect all his rent, ALWAYS ALL PAID IN CASH, OFTEN IN SMALL BILLS. Go to the bank and make his deposit and fly back to San Francisco. He had bought these places in the '80s downturn in TX and was minting money on them.
I'm sure most of his neighbors thought he was just an "ordinary businessman".
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
18y
Originally posted by "all_cash":
Anyway he'd fly down once a month, drive his rental to his bank and get his 9MM out of his safety deposit box, go collect all his rent, ALWAYS ALL PAID IN CASH, OFTEN IN SMALL BILLS. Go to the bank and make his deposit and fly back to San Francisco. He had bought these places in the '80s downturn in TX and was minting money on them. I'm sure most of his neighbors thought he was just an "ordinary businessman".
Pineville, LA · Member since 2008 · 27 posts · 2 votes
18y
Tim
Are you saying you focus on those "bad area" rentals? I have an acquantance that wants to get out of the rental business because he's tired of it. Should I look into this?
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
18y
No, it's not bad areas. My areas are actually quite nice and a lot safer than Chicago. It's areas where people are predominantly renters, not owners.
I said I like the guy AllCash was talking about for his style. Flying into town, picking up the 9mm in his safe deposit box, then getting his rent cash, then flying back out of town. Has a certain Jason Bourne panache while being a very profitable system...lol. :mrgreen:
Pineville, LA · Member since 2008 · 27 posts · 2 votes
18y
I guess I understand what you are saying is you find it easier to cash flow the lower priced prop rather than the higher priced ones. i have found, so far, just reading and learning at this point, is that I would like to focus on those low priced properties at the beginning. I have found the rents in my area cash flow better with the lower priced prop.
It seems I can more easily find the properties that are 20 -25k rent for about 500/mo where the prop for 70-80k do not rent for 1400.
Real Estate Investor · Louisville, KY · Member since 2008 · 159 posts · 13 votes
18y
My opinion is that everybody has to have a place to live, and I'll be happy to take some low hanging fruit that somebody else doesn't want assuming I get good tenants. Yes, that's a big assumption. But from my limited experience, sometimes tenants in "good" parts of town are just as likely as those in not such good parts to tear a house up, not pay rent, etc.
Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
18y
Originally posted by "TimWieneke":
Do you mean low valve or low value?
I invest in low "price point" properties that have a very high value to me. I'm out the door at about $8-10,000 per house after closing and repairs, get $500-$700 a month in rent and they appraise out at $50,000 per house. The multis are generally about the same per unit except the appraisal generally runs $30,000 per unit. I'm not smart enough to make overpriced property cash flow well. :wink: Also, I really don't learn much or do much else beyond this. Don't need to. Don't want to.
Tim,
It's nice to know that I don't have to compete against you in my market. I do the same thing. Numbers from my last project are below.
Real Estate Investor · Leesville , SC · Member since 2008 · 4 posts · 0 votes
18y
Thanks,for the input Guys
The low value properties that I am talking about is properties that can be brought 40 to 45 cents on the dollar or less .That need some rehab,sometime you can sell them for cash & get double your money back.You may pay 3k or 4k per house & the value be 15k to 20k.Some in bad part of town some in good part of town. The value for the most all these properties is under 40k.
Real Estate Investor · Member since 2008 · 340 posts · 34 votes
18y
Tim and I use the same system. Albeit, in different areas. But, he is right. Don't overlook these secondary markets. A few years back, a RE mentor told me, "That it is better to make a fast nickel, than a slow dime."
My BP and I no longer look or buy the big deals that have marginal cashflow. We get the cheap SFR's and two/three flats that have decent cashflow and we reproduce those deals 2 to 4 times a month.
Yes, we have to do some driving and go out of way to get to our target markets, but we have a system in place and professional property management is a Godsend.
Real Estate Investor · OH · Member since 2008 · 1k+ posts · 86 votes
18y
Originally posted by "**********":
Quick question here and I gotta ask owning a construction firm my self.
How did a 2 month rehab cost 3K or how did 3K worth of work take 2 months.
Only asking because I pay a journeyman just under that in wages for 2 weeks.
Yes I am in CA and do high end work, not rehab as a main stay.
Some kitchen remodels are 40K....
How much rehab does 3K buy out there? On the Kansas City stuff I am involved with we are averaging 10K for modest rehab.
James,
The reason it took 2 months is because I only do this part time, at night after I get off my full time job and on the weekends. Below is my project list of everything that was completed. The most costly fix was the PEX, which came in at $700. Total repair to date was $2,300. I budgeted 3K.
Fix list
Basement
Plumbing lines PEX
Line to hot water heater
To Kitchen sink
To Upstairs bath
To Dishwasher
To basement toilet
New washer hook ups
Wash tub
New shut offs all around
Safety line on WH
New outside spikets
Retape furnace ducts
Rewire and add junction boxes
Pull Paneling
Scrape Walls
Paint walls
Gutter fix
Clean Cabinet area's
Paint basement Hallway..
Remove Basement Toilet
Fix front rain gutter
Kitchen
Kitchen Trap fix
Install shut offs
Roof replacement
Dish washer fix
Total kitchen Ceiling repair
Fix plumbing leak in ceiling
Clean
Install 220v for stove and dryer and remove old gas lines
Ceiling fan
Door bell over stove
New caulk
Fix basement door lock
Add GFI's
House
New Locks
Rebuild back door jam/paint
Pull tack strips
Wash and Wax floors
New storm door
Dinning room window
Scrape and Paint flaking porch
Glue wall paper
Living room return vent
Pull Staples
Dinning room
Living room
Stairs
hallway
New hallway light
Fix or Replace Electric Outlets
Upstairs outlets replaced
Bathroom
New bath medicine cabinet
Fix tile
Clean
Plumbing leaks
New shut off toilet
Rebuild Toilet
New Caulk
Bedroom one
Pull flooring
Change light switch
Replace ceiling fan
Wash and Wax floors
Bedroom two
Replace ceiling fan
Wash and Wax floors
Bedroom three
Replace ceiling fan
Wash and Wax floors
Garage
Man door fix and lock
Big door type lock
Back window fix
Trash /Sweep
Push Button for Door
Real Estate Investor · Knoxville, TN · Member since 2008 · 98 posts · 13 votes
18y
LCass1, Are you doing most of your investing in Lexington Co.? Any in Aiken? Just curious -- I've never flipped any properties that low on the price scale -- In fact, I've never seen anything that cheap in my area.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
18y
Originally posted by "LCass1":
Does anyone invest in the low valve properties. . .
I love them,I make me alot of money.
Thanks,LC
Are you looking for people to validate your strategy. If it's working keep doing it :D
Actually I primarily wholesale low end properties, fixer uppers in as is condition. I have plenty of buyers. With the market change I think it is easier to make money in lower end properties vs higher end and "pretty houses"