All Forum Posts by: Account Closed

The market is the market. Every sale is by definition at "market" price. If there were no buyers sellers could not raise the prices. That much is simple and always true. The other question becomes of "value". I believe the SFR market is tremendously overvalued in most places, at least from the point of view of an investor. Thats because most SFRs are not sold to investors but to homeowners. I am personally selling a bunch of SFRs but investing on MF syndications where the values have also risen but not as much and more opportunities for forced appreciation exist. Plus its far more passive and less stressful on a day to day basis. I also think a well managed syndication that delivers 14-17% IRR is better than forward looking returns on SFRs at current prices.

If you do not have enough cash you should not buy a property. Its a disaster waiting to happen. Unless you have enough for downpayment, rehab and at least 6 months expenses in cash, you should not buy anything. 

 A typical cash purchase pays about 5-6% per year net return. A bit more if you self manage. If you want 20K/month or $240K per year you need to invest about 20X that. So about $4.8M. So yes, possible. Just need enough capital. 

Now getting leveraged returns you can do better (maybe 8-10%) but cash flow per property goes down and you need more properties. 

Have you considered using a PM?

I have said it before. OOS investing is for those who have very high paying jobs in expensive markets and enough capital to deploy into a portfolio. I would never suggest putting your last 30K into a class C property thousands of miles away from you. You are much better off buying an index fund. I say this having owned OOS midwest properties for 7 years and knowing everything that goes on with them.

Yup. My San Jose tenants manage the property themselves. They call a handyman or plumber or appliance repairman etc and just get my approval for the estimates. So far the last two tenants treat the home as their own and get competitive bids for repair jobs and probably are more concerned with my costs than I am! Rent comes in without asking before the first so really no need at all for a PM. I even placed them myself via Zillow.

If its truly A class you should be able to self manage. 2000 in Indy is a very high rent. You should be getting professional class tenants. Why do you need to pay $200 per month to a PM? I manage my A class California rental from 8000 miles and 15 time zones away!

Not buying SFRs. Selling what I have. But put more into some syndications. The SFR valuations are ridiculous. MF valuations are more manageable as buyers are professionals and institutions.

Lets not forget what BTC is trying to be. An alternative CURRENCY. Not just an asset. At its current minuscule size (compared to global currencies) governments can let it slide. But what government is going to allow an alternative unregulated currency challenge their fiat currency at any meaningful scale? Any government has only two tools of control: guns and currency. And guns trump currency. The biggest risk to BTC is simply that the government will outlaw it. Overnight. Before it is so big that every 401K has it in their portfolio. Before it can be used as widespread currency to buy everyday goods. Before the banks themselves get into it. Before people use it willy nilly to avoid taxes. Its just too big a threat.

Welcome to owning rental property. Sounds like you are renting C class SFR and this is par for the course. Add to that a pandemic. I found that there are good years and bad years but as you are learning turnovers kill a years profit. As for PMs, I never had one that marked up repairs but if not there they will make it up some other way.

Unless you can buy the property at an exceptional price, the cash flow is just not going to be there in any consistent way. When you add in mortgage pay down and some appreciation you can eke out a decent return but it can be stomach churning on the ride.

Don't expect a lot from your call with the PM. How can he admit he could have done better with your expenses?