Glendale, AZ · Member since 2017 · 1k+ posts · 236 votes
Hey guys, what would you do if you had 50 K cash?
1) Pay off your house completely so you would be mortgage free (let’s pretend that’s your mortgage balance)
2) Buy a 250k multi family that brings you 1k per month in cash flow Close to big city (1hr away )
3) buy 10-20 single family ( which is almost the same as The same amount of units Multifamily )that cash flow’s $200 per door , which would roughly give you $2000- 4000 cash flow per month
.But at the same time, when people refer to low rent properties, not necessarily 50K Cleveland property will bring low rent, right? It probably will rent what, for 700$per door?
Actually I consider $700 a month low rent. In Baltimore some areas will get as much as $1000+ for a $50K house. If a tenant tears up a kitchen when leaving or you need a new roof, there goes 4-5 months rent.
By the way, I am not making a comment on the Cleveland market. I don't know it, and $50k houses there may be a great investment.
Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
8y
@Ned Carey, back east you have punishing property taxes when compared to most of the west. But we are catching up. :-(
If youre getting 900 a month rent, there is a good chance you are paying 200-300 a month in property taxes. Thats as bad as hoa fees. especially if the place is vacant.
@Mary Jay, you 'can' have negative cash flow. As long as you can afford it with your 'day job' and have SOME type of plan (like paying it off, selling, refi for cash flow).
A lot of it depends on when you bought. If you bought at the peak, say 10+ years ago, and were able to hang on, you might be half way to paid for.
I think to buy into TODAYS market with negative cash flow is a form of financial suicide. You better have a GREAT plan. ;-)
Well, all three houses I own are negative cash flow in my case, all 15 year loans.. All bought when market was down...One is almost paid off (owe 4K on it) ...One where I live has 200K in equity and third one has about 70K in equity (not much)...
I am refinancing now the one that is almost paid off and probably will buy a fourplex...
Not sure if negative cash flow is such a big deal... I guess it worked for me, but I am getting to a point where I dont think I can afford another property with a negative cash flow...Thinking of selling my house and may use that 200K to buy something smaller in my neighborhood...Or can pay off my rental and move into it, its 10 minutes from my current house...
I want to sell, but have a hard time psychologically to sell...I am like a hoarder who cant depart from a property...Hoarding is not a good trait for investor...
.But at the same time, when people refer to low rent properties, not necessarily 50K Cleveland property will bring low rent, right? It probably will rent what, for 700$per door?
Actually I consider $700 a month low rent. In Baltimore some areas will get as much as $1000+ for a $50K house. If a tenant tears up a kitchen when leaving or you need a new roof, there goes 4-5 months rent.
By the way, I am not making a comment on the Cleveland market. I don't know it, and $50k houses there may be a great investment.
Wow! Thats awesome! What area would 50K house be in? C- or D?
If yes, do you invest in those areas? If yes, what is your experience with it?
Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
8y
@Mary Jay, I KNOW it's a difficult decision to sell any of your properties.
My wife and I have sold 2 properties in the last 3 months. I have just put #3 on the MLS today. The 3rd one was my residence for about 3 years, been rented for the last 2 years at $0 positive cash flow. Today I have more than $100k in equity. Not bad for a 5 year hold. ;-)
Despite the fact it is a no-brainer to sell, it's still a difficult decision. I have a 30 yr., 3.25% interest rate. I obviously wish I could move that financing to one of my other rentals.
.But at the same time, when people refer to low rent properties, not necessarily 50K Cleveland property will bring low rent, right? It probably will rent what, for 700$per door?
Actually I consider $700 a month low rent. In Baltimore some areas will get as much as $1000+ for a $50K house. If a tenant tears up a kitchen when leaving or you need a new roof, there goes 4-5 months rent.
By the way, I am not making a comment on the Cleveland market. I don't know it, and $50k houses there may be a great investment.
$50k house in Cleveland right now should get ya roughly $850-$900/mo in rent.
.But at the same time, when people refer to low rent properties, not necessarily 50K Cleveland property will bring low rent, right? It probably will rent what, for 700$per door?
Actually I consider $700 a month low rent. In Baltimore some areas will get as much as $1000+ for a $50K house. If a tenant tears up a kitchen when leaving or you need a new roof, there goes 4-5 months rent.
By the way, I am not making a comment on the Cleveland market. I don't know it, and $50k houses there may be a great investment.
$50k house in Cleveland right now should get ya roughly $850-$900/mo in rent.
In which zip codes would that be ? are those Area C/D ?
.But at the same time, when people refer to low rent properties, not necessarily 50K Cleveland property will bring low rent, right? It probably will rent what, for 700$per door?
Actually I consider $700 a month low rent. In Baltimore some areas will get as much as $1000+ for a $50K house. If a tenant tears up a kitchen when leaving or you need a new roof, there goes 4-5 months rent.
By the way, I am not making a comment on the Cleveland market. I don't know it, and $50k houses there may be a great investment.
$50k house in Cleveland right now should get ya roughly $850-$900/mo in rent.
In which zip codes would that be ? are those Area C/D ?
You can find $50k houses like those in most class neighborhoods in Cleveland. 44109, 44111, 44135, 44102 to name a few.
@Mary Jay, I have been considering the following scenario/example:
Buy $300k house with 20% down ($60k).
Prior to 1st payment, make a $140,000 principal only payment. $200k total.
Rent property for $1500 (net zero cash flow).
But you BETTER like it (the house). You are going to have it a LONG time. ;-)
I did this on my last property. Rather than a principal only payment, I did a recast after 12 months which increased my cash flow due to the new amortization.