Turn other people's property into yout cash flow
Hey guys, so I have recently seen this investor in my hometown is doing this and I felt like this is such a great investing strategy.
What he did was:
1. Rent a Townhouse/Single Family house for $2200 from a landlord.
2. Rent out a master bedroom for $950, regular bedroom 1 for $750 and bedroom 2 for $750 (Bedroom 1 and 2 shared a bathroom) and a basement with full bathroom for $1200.
3. All the rooms are furnished and he pays for all tbe utilities which average about $300 a month.
SUMMARY:
Rent: $2200
Income: $950+$750+$750+$1200 = $3650
INCOME - RENT - UTILITIES = CASH FLOW
$3650 - $2200 - $300 = $1100
He basically make $1100 cash flow from other people's property, and he is currently managing 10+ properties like this. He agreed with the landlord to make any minor repairs on the property and of course this is a win-win deal with the landlord. He got an attorney to write a subleasing contract for him and in my hometown any property with no more than 4 unrelated people may live in the same unit without a permit.
Can you please share your opinion on this?
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#1 All Forums Contributor
- Real Estate Consultant
- Summerlin, NV
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#1 All Forums Contributor
- Real Estate Consultant
- Summerlin, NV
I funded one of these in ATL the guy went broke.. its a cluster of epic proportions putting that many people into a home.. it works for students at collages .. but as folks get older and all the issues Steve brings up.. the one I did I ended up owning.. and going out and having to deal with all these Micro tenants.. JOB and a tough one.. However I know this works in the SF Bay Area were a 3 and 2 cost 1.5 million and the techies will rent two to a room.. for a thousand each.. So it is location dependent and WHO is your tenant..
- Jay Hinrichs
- Podcast Guest on Show #222
