Rentals v Land contracts

Rentals v Land contracts

Investor · Chicago, IL · Member since 2017 · 20 posts · 7 votes

So many people love rental properties and even though I like the monthly income I don't like being bothered with the overhead. When I think about after you pay the mortgage, insurance, taxes, plus maintenance you have little left, unless you have a muiltiunit and even still you have to deal with screening tenants, repairs, complaints, etc. So I came up with a plan and this may not work for everyone. So for example, I have a contract on a single family home for $6,500 and close in 30 days and I already have a candidate for sale. So I buy the property for $6,500 and then put it up for sale with lease/option to buy for $19,000 bad credit no problem. I have someone already interested so the deal is that I get $5,000 down and $1,000 a month for the remainder balance of $14,000 for 14 months. The trick is I recouped most of my money of front, I did nothing to the property, and I'm collecting $1,000 a month. Buyer is responsible for everything, repairs, taxes, insurance, bills, everything and it's a part of the contract to keep everything current and in good standing including building codes and or violations which must be done in an orderly fashion. After a years time I will have maybe 5 to 7 more properties collecting a total of 6 to 8 grand month plus I haven't really spent anything because after every sale 2 to 3 months later I recoup my money on every deal. I target distressed neighborhoods where I can find good deals and sell them on contract helping someone become a property owner who probably has no other means of doing so or just appreciate the process being less frightening than the traditional banks. Hello BP family what do you think, feed back please.

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Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
9y

@Alexander B. you are in the one of the most expensive cities in the Midwest...if not the US, and you are buying properties at $6k...where? 

#1- Being an investor is a customer service industry. We provide safe, clean, affordable housing...then we reap the tax benefits of being investors...your plan is really hustling and pretty shady...

#2- Why would you need 30-days to close a $6k property.

#3- SFR is a silly way to make money and there are less people in the industry that have done it then have failed.

#4- $5k down on a $19k house is unrealistic...and then you have a $14k option...what does that do?...

#5- $1k a month is unrealistic for this asset class...won't happen

Not being a dick, but I think you need to go back to the drawing board...happy to have a conversation about this.

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  • Surveyor · Hemet, CA · Member since 2015 · 797 posts · 112 votes
    9y

    @Alexander B. did you see that thread in the success stories about the house purchased for a dollar?

  • Investor · Chicago, IL · Member since 2017 · 20 posts · 7 votes
    9y

    @Robin Boyer no but I think we have a program like that here. Here in Chicago we also had a program that allowed you to pick from a list of properties that were on the way to be torn down and the city would give you the property just as long as you proved that you were qualified to to fix the building 

  • Surveyor · Hemet, CA · Member since 2015 · 797 posts · 112 votes
    9y

    @Alexander B. I need to find the junkiest houses in good neighborhoods. So that we can make money on the buy! I talked to my 1031 guy he said we can do the lease option to our tenants. If we collect a nice down payment do we invest that chubk blow it? What do you do with the down payments.

  • Investor · Chicago, IL · Member since 2017 · 20 posts · 7 votes
    9y

    @Robin Boyer save them and buy more and they dont necessarily have to be the best neighborhoods just rentable and look into commercial the sweetest I mean I should write a book about this but comercial awwww yesssss the best and here is the reason why say i have 2 deals on the table one being 2 flat mixed used and the other being a 2 flat residential. We will say both ate selling for same price but here is the difference now potentially both nay have the same selling value depending on area but in some cases commercial can be unpredictable depending on the buyer and changes woth new developments in the area. Also it less expensive to fixed the mixed because the store is a shell with 4 walls, 1 ceiling 1 floor thats it besides the apartmenton the second floor. The 2 flat residential has 2 apartments 2 kitchens 2-4 baths and way more walls thus meaning more money, Im a big fan of commercial.

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