Real Estate Investor · Oklahoma City, OK · Member since 2008 · 126 posts · 2 votes
Just a Question to people that like to buy houses and rent them out and others that have and still do but also, Buy and sell, Wholesale and all that good stuff. Are you able to be really successful in only Owning houses and renting them out? Nothing else but that? How many houses do you think you would actually need to be able to pay bills your own bills, fix anything the current tenants damage and still have left over "spending money"? 20? 50? Any info or thoughts would be nice. :type:
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
17y
Honestly it only took me 8 rental properties to "technically" hit that, and of those 8 only 1 was a multi (3 units). However, I aggressively (obsessively) bought extremely low and within that time also acquired a residence for myself for cash (no mortgage) and I'm just not a very materialistic guy. When you don't have a mortgage and a car payment, becoming financially independent is a lot easier. Moving forward from that position, everything I buy - I buy the asset to buy it for me first. I haven't applied for any type of consumer loan for almost 3 years now.
It's a highly disciplined lifestyle that requires you to ignore the marketing to "buy now, pay later" that is all around you.
That being said, for me this is only a stepping stone. I'm on to buying my first cashflowing business next.
Homeowner · Buffalo, NY · Member since 2009 · 4 posts · 2 votes
17y
From my crash course experience. Figure on taking in 1/4th to 1/3rd NOI;
1/3rd to management & maintenance above what you considered.
1/3rd for capital improvements (rainy day)
1/3rd for you.
So if you accurately figure you'll clear $300 you'll probably clear $100. Then again I'm a novice.
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
KnickKnack,
I live off the income from my rentals. How many rentals you need depends on how much income you need each month. If you do everything right, you can generate about $100 per unit per month in positive cash flow. If you are willing to do the management and maintenance yourself, then you can EARN another $100 per unit per month. That means you would have $200 per unit per month. So, divide how much money you need each month by $200 to find the number of units you need. For example, if you need $5,000 per month, then you would need 25 rentals. If you need $10,000 per month, then you need 50 rentals.
Investor · Southlake, TX · Member since 2009 · 950 posts · 338 votes
17y
Maybe this needs to be another thread, but if you have 25 sfr's, at what point do you become overwhelmed with managing them yourself? Do you jump to multifamily at some point in order to maintain the cashflow more efficiently?
Real Estate Agent · Tampa, FL · Member since 2009 · 456 posts · 123 votes
17y
I could be wrong but I think the 100 per door rule is geared more toward multi unit properties. a SFR could be rented out to one family, or you could rent out the bedrooms to different people, either way I think a SFR counts as more than one "unit" so a SFR should generate at least a few hundred a month but maybe I'm wrong.
Rental Property Investor · Syracuse, NY · Member since 2008 · 131 posts · 17 votes
17y
Tod,
I would believe that if you can manage 25 singles, you wouldn't have a problem doubling or tripling that amount. You would already have a system in place.
Also, single family rentals would have people that stay in them longer than multi unit properties. Less turnover.
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
Tod and Chris- I think we may have a terminology problem here. I have probably 40 rentals in s. Texas at present. If I was doing all the mgmt and collections, rentals etc, I'd lose my productive time where I make BIG money. It is not worth the effort for the money. To others that need the cash flow, maybe they are ok with it. I'm not.
My time is much more valuable and rewarding to do the research, analysis and acquisition of properties or doing hard money loans.
You might still be able to "manage " your properties if you had an emplyee to do all the grunt work and you were simply in an advisory capacity. Just my thoughts. I've had mgmt companies work for me and I've owned some. It all sucks, but that is a necessary evil in the investment game. Rich.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
17y
Honestly it only took me 8 rental properties to "technically" hit that, and of those 8 only 1 was a multi (3 units). However, I aggressively (obsessively) bought extremely low and within that time also acquired a residence for myself for cash (no mortgage) and I'm just not a very materialistic guy. When you don't have a mortgage and a car payment, becoming financially independent is a lot easier. Moving forward from that position, everything I buy - I buy the asset to buy it for me first. I haven't applied for any type of consumer loan for almost 3 years now.
It's a highly disciplined lifestyle that requires you to ignore the marketing to "buy now, pay later" that is all around you.
That being said, for me this is only a stepping stone. I'm on to buying my first cashflowing business next.
Financial Advisor · Tampa Area, FL · Member since 2008 · 956 posts · 214 votes
17y
Originally posted by Tim Wieneke:
Honestly it only took me 8 rental properties to "technically" hit that, and of those 8 only 1 was a multi (3 units). However, I aggressively (obsessively) bought extremely low and within that time also acquired a residence for myself for cash (no mortgage) and I'm just not a very materialistic guy. When you don't have a mortgage and a car payment, becoming financially independent is a lot easier. Moving forward from that position, everything I buy - I buy the asset to buy it for me first. I haven't applied for any type of consumer loan for almost 3 years now.
It's a highly disciplined lifestyle that requires you to ignore the marketing to "buy now, pay later" that is all around you.
That being said, for me this is only a stepping stone. I'm on to buying my first cashflowing business next.
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
The heck with Dave Ramsey!!! I'm proud of Tim also. You don't see that discipline, fortitude and vision in very many folks. Tim just moved up on my ladder of smart people. Congrats Tim. Rich
Financial Advisor · Tampa Area, FL · Member since 2008 · 956 posts · 214 votes
17y
Originally posted by Rich Weese:
The heck with Dave Ramsey!!! I'm proud of Tim also. You don't see that discipline, fortitude and vision in very many folks. Tim just moved up on my ladder of smart people. Congrats Tim. Rich
I totally agree! He is 'living like no one else so that one day he can live like no one else'. LOVE IT!
Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
17y
Correy - check out the posts on the 50% rule - that rule that is talked about here does apply to SFR not just multi-units - $100 per door assuming you farm out the management.
If you do a sober home or a half way house etc where you are renting the home to 8--10 people at $100 per week then no those numbers will not fit - but if your doing the typical SFR with a single family in it - the $100 rule comes into play there.
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
Twenty five? If you can't manage only 25 rentals, you better look for a different business. Managing 25 rentals takes VERY LITTLE TIME if you're organized. If you're also talking about doing all the maintenance, then you're talking about at a little more time, but it's still not much.
Around here, the bigger apartment complexes have one full time manager doing 175 units and that is just an employee. A motivated, interested owner could certainly do more. With SFHs, the management is even less per unit because the tenants are usually better.
Real Estate Investor · Oklahoma City, OK · Member since 2008 · 126 posts · 2 votes
17y
Yea, I agree with that as well. Shouldnt be much, as me myself has helped manage friends houses so I see how it is myself. Now, if we were talking about 500 SFRs, if some would like that and I know of only 2 that do. That still is not that bad if good management is in order. I would surely like to try it one day. :cool:
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
WOW!!! Ihave to disagree here with those that say you can manage 150 units because a 150 unit building only has one mgr. That would be a 24/7 job!! No time to find new properties, analyze properties, do paperwork, etc.
A 150 unit property is ONE location, unlike 150 SFRS which will be different areas, maybe different cities. I've been doing this for over 35 years and don't know a single person that has decided to do their own mgmt on 50 plus units. If you have ability to do other things, why would you want to waste your time doing an "employee" type job? You might as well also do the handyman work, pool cleaning and mow the lawn also, imo.Rich
Property Manager · Passaic, NJ · Member since 2008 · 369 posts · 83 votes
17y
I have to humbly disagree. I own & manage 54 multi units in 3 different buildings. For many years I worked full-time and the management was my part-time job or investment. There are two supers that are part of the "expense" cost and they each receive a free apartment for their services. They basically run the properties and I tell them what I want done and I supervise/check on them. I take care of the rents/bills etc. In reality I spend about 10 hrs a week total. 10 hrs may seem like a lot of time to some. However, when the economic crisis hit and I was laid off, my rental income became my sole source of support.
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
Rich,
Haven't you ever managed any of your own property? If so, what did you do that took so much time? How many rentals do your managers manage? If they can't manage more than 50 units, you need a new manager!
No, it's not a 24/7 job, I personally know people who manage more than 150 units and it is a 40 hour job. IMO, it's only a 40 hour job because they have so much nonsense to do, precisely because it's a job and the company they work for requires a tremendous amount of paperwork that simply isn't necessary (or at least isn't necessary if you own the property).
Why would 150 SFRs be in different areas? Although I don't have 150 SFRs, I do have several dozen units and all of them are in one area, most within a 10 minute drive of each other. If I wanted to operate 150 SFHs in my area, I certainly could. Even a small city has thousands of rental units and 150 would certainly be doable.
Just to be clear, all of my rentals are not SFHs. I have many apartment buildings as well as SFHs. However, I don't believe the management would be greater if I did have all SFHs. Most of my management issues are spent on my low income apartments, not my SFHs.
That's ironic, because I have several friends that own over 50 units and almost all of them manage their own property. They also either do their own maintenance (part or all) or they supervise the maintenance (which I think is worse).
Rich, you know Ingrid and me and we're your friends, so you certainly do know people who own over 50 units and do their own management.
In addition, Ingrid says that she spends about 10 hours a week managing more than 50 units. I spend about 12-16 hours a week doing both the management and maintenance, which I do simultaneously. I don't do "management" from 10 am to noon and the "maintenance" from noon to 2pm - I do it all at once. I post what I do nearly everyday on my BiggerPockets Blog and you can see exactly how maintenance and management is all done at once.
Because it allows me to be semi-retired with the minimum number of units. If I hired people for the management and maintenance, I would need more rentals to have the same personal income AND I would have to manage/supervise the employees. If I didn't want to manage/supervise the employees, then I would have to pay for a manager and I would STILL have to manage the manager.
Believe me, I've been there and done that. At one point, I owned a business with over 50 employees. We had a layer of management to manage the employees. I HATED IT! I worked far more managing the management of that business than I work today doing all the management and maintenance myself. In my opinion, dealing with employees is worse than dealing with tenants! YUK!
I agree and I do! However, the only pool that I clean is the one in my own back yard - around here, rentals don't have swimming pools.
Real Estate Investor · Chicago, IL · Member since 2008 · 122 posts · 46 votes
17y
I think this issue comes down to how one wants to spend his time and what he wants to do. I certainly think one could manage 50 properties by himself. He could probably successfully manage even more than that. However, his job is property management. That also will take up a good chunk of his time.
I personally don't like to manage property. I'd rather spend my time looking for other investment properties, negotiate new deals and the like. I believe that allows me to grow my portfolio quicker. Plus, if I become satisfied with my portfolio's size I can just stop working. With effective property management in place, I can just sit back and enjoy the passive income.
But, once again, that is just what I want to do. Some people like to change their own oil in their car too. I'm just not one of those people.
Real Estate Investor · East Aurora, NY · Member since 2009 · 70 posts · 22 votes
17y
I would say it depends on your goals and abilities as well as the systems (or lack of) that you create to manage your properties.
When I had a few multi-unit properties and didn't have a system to manage them, it took up all of my time.
Now I have over 2 dozen SFR's and spend almost no time managing them.
If you're just interested in securing a nice cash flow and watching your equity build, its a good living. If you want to just spend your time wholesaling or flipping properties, it will get your frustrated.
And if you like fixing things Vs the thrill of the deal you might have a different perspective as well.