Investor · Reading, PA · Member since 2013 · 122 posts · 33 votes
I find a lot of info on flipping but I'm really not that interested in it. I can barely change a lightbulb without the wifes help.
That said, I would like to create a passive income stream and I do have some funds available and also don't plan to leave my day job, to contribute towards that goal.
Private lending may be an option but I don't exactly have 200K laying around either. Not sure what minimums are there realistically.
What if I find an already rehabbed house, or even something that seems frowned upon......a house on the MLS (eek)?
What are some targets to help evaluate the deal. I'm not a big fan of cap rate since that ratio can vary a lot. If I have 100% financing then it may not cash flow at all....if I drop down 50% of course it better flow but then I need to calc a break even point.
I'm reading, reading, reading, and still not sure how to evaluate deals for my situation.
@Chris Haas - why don't you find a house there in your county, in a decent non-warzone neighborhood, for $45k or so that is basically habitable (i.e. financeable) but needs $5-7K to get it rent ready, that will rent for around $850/mth. Buy it with a conventional loan at at 80% LTV. Manage it yourself, just find a handyman for routine stuff. Join the local REIA group and ask around for good contacts for handymen, plumbers, electricians, HVAC, etc., from whom you can get reasonable investor-pricing.
Here's what that would look like using a property manager, but I would recommend just managing it yourself and earning the PM and leasing fee portion, which will give you some great experience.
@Chris Haas - back before we heard all the 'rules' we just did the math. If a property cash-flowed $100/mo after expenses, including vacancy and maintenance, we were interested. As it turns out, a buy-and-hold at 70% of value minus fix-up almost always exceeded that... And don't discount the MLS. 80% of my sfh came of the MLS. Before, during, and after the bubble. It's a lot of looking but they are out there.
@Deborah Burian
Cash flowed with what % down?
You can get nearly anything to cash flow if you put enough down right?
Thank you for taking time to reply. As great of a site as this is, I think there are some things others already know that I'm still trying to get my head around.
@Chris Haas - why don't you find a house there in your county, in a decent non-warzone neighborhood, for $45k or so that is basically habitable (i.e. financeable) but needs $5-7K to get it rent ready, that will rent for around $850/mth. Buy it with a conventional loan at at 80% LTV. Manage it yourself, just find a handyman for routine stuff. Join the local REIA group and ask around for good contacts for handymen, plumbers, electricians, HVAC, etc., from whom you can get reasonable investor-pricing.
Here's what that would look like using a property manager, but I would recommend just managing it yourself and earning the PM and leasing fee portion, which will give you some great experience.