All Forum Posts by: Chris Youssi

 You're looking at this backwards.

First, $100/door is a ridiculously low number.  All you're asking for is trouble, and as you've already noticed, it would take a few lifetimes to get anywhere.

Second, you have your answer in your own observation, "...then I would need 40 doors...".  The way to find your answer is to reverse engineer it from your "financial goal"...not starting with "$100/dr method".  Your own financial goal will dictate how much per door you NEED to achieve to reach it.

If $4k/month is your financial goal, and you can (or want to) only handle 10 properties, then you need $400/door...not $100.

I agree with your thinking here or take the middle and 20 doors you meet your objective of 4k/ month or in my case we avg 300/door / month.  It befuddles me how some investors are willing to settle for $100/door makes zero financial sense to me. Now having said that, I also am recognizing not everyone has an avg sale price of 130k and that the west coast NYC etc...higher values investors bank on appreciation. Still a very scary prospect for myself.

@Chris Youssi Thanks for the wishes! I was really excited about flipping house several years ago. But, after having kids, the fear of the risk somehow got stuck in my head and I would always push the idea out of my head. Now, I want to flip houses to get capital to invest in rentals. Was this the path you took? Or were you lucky enough to have some initial capital to get started?

Regards,

Rob 

I am still learning, but just to place some numbers on the board to understand more for myself...

ill pick the 2 cheapest 3/2/2's in my area in a B+ location id be willing to invest in as a rental.

Property 1: 3/2/2 1,519sq ft $159,900 = average rent based on rentmeter.com is $975/month

Property 2: 3/2.5/2 1648sq ft $161,000 = average rent based on rentmeter.com is 1050/month

So if i sold my townhouse and put 100k toward both properties, that would place me at the following roughly...

Property 1: $975/month rent - $455/month = $520/month or $6240/yr

Property 2: $1050/month rent - $455/month = $595/month or $7140/yr

combined it would be $1115/month or $13,380/yr

I would not rule out the new props for the simple reason new means little or no maintenance for a 5-10 year period. On the other hand the 2 existing rentals SFR have appreciation x 2 vs 1 prop. Granted they have less value but . . . depends on overall market - location - community etc... I would talk to a local lender get some input or better yet attend any meetups in your market. Investors are very very helpful and well informed with BP IMHO more than any other meetings I have attended.

Best wishes moving forward

Option 2:

Brand new housing selling in a A+ area near me... 

Property 1: 4/3/2 2,001sq ft $255,000 NEW = average rent based on rentmeter.com is 1800/month

Property 2: 5/3/2 2,355sq ft $315,000 NEW = average rent based on rentmeter.com is 2200/month

Property 1: $1800/month rent - $800/month = $1000/month or $12,000/yr

As I scan commercial and residential property, I regularly find these portfolios for sale. A couple have got my wheels turning, so I thought I'd poll the professional audience. One in particular is a 20+ single story, slab style home development. All homes are on the same street. All of them have stamped concrete floors that look like wide plank hardwood. They are all brick or vinyl siding, so I am sure they are all low maintenance, both inside and out. 100% occupied with a waiting list is the part that really stuck out to me. 

So my question: have any of you ever built strictly with the intent on renting the properties upon completion? This seems like a solid strategy to me, but I would love to hear from you guys. Here are some of the pros and cons that I see:

Pros:

• Property management costs would be lower over the life of ownership due to proximity of homes in portfolio, low maintenance flooring, siding, etc.
• You could build them with more robust systems(HVAC, plumbing, etc) knowing they would always house renters
• Your portfolio would be concentrated as opposed to spread all over a geographical area
• Your exit strategy would be super attractive if you were to sell as a package
• Quicker than purchasing and potentially rehabbing an older property, and accumulating them one by one
• You could sell a percentage of them to recoup a portion of your investment, and rent the rest, which should put you with solid equity from the gate

Cons:

• Entry costs and length of time from start to first months rental income for construction
• Funding the construction, or finding the right lender to fund such a property/development
• Knowing the correct price point of the finished product, or what the community is lacking
• Local zoning or possibly being prohibited to build SFH to rent
• Higher construction costs vs. multifamily(apartments or townhomes)

I know there are many other strategies out there, but as one wanting to accumulate a nice rental portfolio, this seems to be a solid approach. I am curious as to what you guys and gals have to say about it.