I’m starting to doubt my c class rentals. I met someone who finances all of her rentals and I guess I kinda got caught up in what she was talking about. I buy my properties cash 40k or less since my financing options are limited. My c class rentals aren’t bad they cash flow 100% and they rent for 905 and up with sec 8 which in a c class I’m perfectly happy with. Why am I doubting myself now ?? Should I try for B or A class properties.
Rental Property Investor · Atlanta, GA · Member since 2015 · 36 posts · 44 votes
6y
We’re 100% committed to affordable housing...which is mostly C class properties. We buy SFHs and we are all-in at roughy $32K. We renovate the homes to make them the nicest available for the price, and rent for $725-$750. Choose your residents carefully, take good care of them, and the numbers are hard to beat.
Specialist · Baltimore, MD · Member since 2018 · 130 posts · 100 votes
6y
Why doubt yourself? Are you tracking your numbers? Are you getting the returns that you want? Look over your portfolio and analyze those numbers! Numbers kill emotion. If your numbers make sense then who cares what someone else is doing. 😎
Realtor · Laurel, MD · Member since 2017 · 38 posts · 36 votes
6y
Not certain where your doubt is stemming from. Are you doubting your method? It sounds like everything is going well with the properties you have. Never compare yourself and what's working for you to someone else. Each person has a different plan that specifically works for them and their circumstances. Like Daniel said, check your numbers. And if it all makes sense and the numbers work stick to what you're doing.
900 in rent for 40k properties sounds good to me. I guess there's a bit more management hassle, but you're local so you can probably handle it I think. Where having class A or B properties becomes really important is when you're out of state, so you can't really deal with C class tenants. I would be buying similar properties to yours if I was in an area where I could get them. I wouldn't expect St. Louis to appreciate that much even if you had higher class properties.
Rental Property Investor · Phoenixville, PA · Member since 2020 · 2 posts · 2 votes
6y
Sounds like they are doing well to unless we are missing something. Section 8, although they be be a hassle it is guaranteed money and with the equity you have you should be able to cash-out refi. Make sure you develop a good relationship with a local bank sometimes even with credit issues you relationship with them can supersede that.
with all that being said it looks like you’re in good shape!
Rental Property Investor · Atlanta, GA · Member since 2015 · 36 posts · 44 votes
6y
We’re 100% committed to affordable housing...which is mostly C class properties. We buy SFHs and we are all-in at roughy $32K. We renovate the homes to make them the nicest available for the price, and rent for $725-$750. Choose your residents carefully, take good care of them, and the numbers are hard to beat.
New to Real Estate · Dayton, OH · Member since 2020 · 3 posts · 7 votes
6y
in my opinion which im new to this if your making money and everything is going smoothly then relax and take it slow your not doing anything wrong and everyone has to start somewhere. i think what your doing sounds awesome!! keep up the good work
Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
6y
Without knowing anything about your properties or how you run your business, I forsee 3 possibilities:
1. Impostor syndrome
2. Greener grass syndrome
3. Actual problems with your business/rental
Lets take the third item -- if you don't have the cash flow you're looking for, mountains of problems, trouble sleeping, start to analyze if your problem is money, management, or both. I have a management problem in that I, personally, don't want to manage tenants. Just don't want to. I want to manage a PM, I want to manage contractors, but I have no interest in speaking to tenants. So, I know what my problem is, so I spend money to solve that problem.
Now if its #1 or #2, the only thing that solves perception problems is data truths. It goes back to my first point -- either you're hitting the goals you've set for yourself, or you are not. We cannot control the outside world, so we have to do our best to prep for it (reserves, insurance, proper operations) and keep our cool.
I take an (almost extreme) view of my properties from a data standpoint. I track every dollar. If I'm not meeting the goal I set for myself at onset, I try to find the gap, or seek to put my money in a better investment.
If you paid 40k or less for your properties, they're renting for $900 a month, you've got about 50% of that set-a-side for each property for various expenses per month (roughly...I'd like to do more...but lets start at 50%), you're paying all your bills, taxes, running correct and appropriate systems -- you should be good. The gubment is putting money in your pocket every month. Don't look a gift horse in the mouth -- make sure its well-fed, its groomed, and is content. Not many things are as close to a "sure thing" as that.
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
6y
Where else are they going to live? Unless you suspect that your tenants are capable of the disciplined financial commitment of controlling their spending and saving up their income to put a down payment on a house, the tedious paperwork and financial self-examination necessary to get a loan, and the confidence to sign on the dotted line and assume the uncertain responsibility of owning a home.
The sad fact is, however, that most C-class tenants of my acquaintance struggle with these things unreasonably.
Investor · Wichita, KS · Member since 2017 · 584 posts · 813 votes
6y
There will always be a need for affordable housing. These properties you are buying cannot be built for 40k, I see no way they won’t have to appreciate as time goes on. Some don’t think these properties will appreciate much; I think they’re wrong. I’m in a similar place it sounds as you, with a few Section 8 rentals owned in cash for less than 40k all in (mine rent for around $700-$800). I was thinking leverage would be fun, but that is lazy. Keep working your butt off and find the cash to buy the next one. I’ve been using partners to grow. It’s easier to come up with $15k than $30k. Keep asking yourself, “How can I?” Let your mind strategize and go buy another one. It’s a marathon grind. Good luck!
@Jill F. I just wish I could get better quality properties yes they appreciate very slowly and they are free and clear just you always want or inquire about things you don’t have
@Danielle Gray. Everything is going good but I want better and maybe more than what I can afford right now. I just see my B property and love it more than my C class I wish I could get more but I got the B when it was probably a C class the area has changed a lot I know this area my c classes are in isn’t gonna change anytime soon
@Ayyub Omer. I don’t live in state I have a managment company handling my business and I go in once a year just to check up on everything. My tenants are good it just feels like I’m missing out on what people with more capital and resources are getting it’s like I’m missing a piece of the pie
@Stephen Watson. That’s my problem I have a few medical bills and I can’t get a cash out refi so it’s like whatever I pay cash for I’m stuck with it. Unless I sell I’m trying to get my credit fixed but it’s a slow process I probably need to find someone a lawyer probably who deals with creditors all the time