All Forum Posts by: Jameson Hooton

@Shane Willis, I think you understand what I'm trying to get at.

I think @Joe Villeneuve is right - you can't calculate every hour you spend on real estate and find a neat dollar-per-hour average.  And that's okay!  I think maybe I need to reframe my questions into smaller discrete questions:

1)  How much time do you spend self-managing a property?  Does it make more sense (early on, especially) to hire that out, or do it yourself?

2)  How much time do you spend on average (per week, per month, whatever) running your business?  And how much higher of a return are you getting for that time than you would get investing in VTSAX?

I love the concept of front-loading, and that the longer you hold a property the more that initial time investment will pay off in a big way.  I'm just trying to understand the cost-benefit of, say, doing specific things yourself (spending time) vs outsourcing (spending money).

If I had loads of free time, maybe this wouldn't even be a question.  But I already own a small business, and I want to make sure I'm buying investments, not another full time job.  So, I guess, to me, I'm mostly just asking how active or passive everyone is with their real estate, so I know what I'm getting into.  I would assume it varies wildly - one property is probably super easy to manage, 10 is probably time consuming, and more than that probably becomes easier again in some ways, because you can reasonably outsource just about everything.

Exactly, @Joe Splitrock!  Great insights!  Thanks!

@Steve Vaughan, thank you so much for your detailed response!  I especially appreciate the concept of "frontloading."  That makes a lot of sense!

I also love the cost-benefit analysis of carpet vs laminate.  That's exactly the kind of thought process I'm trying to develop.  Thanks!

@Rick Imby, thank you for joining me on this thought experiment!

I agree, that is a great return on the time you’ve put into it!  

@Jim Goebel, thank you, that is very helpful!

@Eric Schultz, @Michael Ablan, thank you so much for taking the time to understand where I’m coming from!  I was starting to think I was crazy!  😂

Like I said before, I’m new.  I haven’t done any deals yet - I just want to know what kind of time commitment I’m looking at before buying my first property. 

@Joe Villeneuve, you clearly think my question is stupid and/or don’t care to understand where I’m coming from.  That’s fine. But it’s upsetting to me that a simple question from a newbie is being met with such scorn.  

I don’t think I have an employee mindset.  I have the mindset of someone who has run a small business for 8 years and understands the value of my time. 

When you own a rental property, it’s not just an investment, it’s also a business.  And a business needs to be run.  You can either do it yourself (and pay with your time) or you can outsource it (and pay with money).  Either way, it’s a cost of doing business. 

So, I’m trying to look at this as a business owner.  Before committing to a deal, I don’t just want to know how much of my money is required, I also want to know how much of my TIME is required.   I’m not looking for an hourly rate - just a ballpark as to what self-managing a property, or managing a rehab team might cost me in time.  

I cannot fathom how that’s a ridiculous question. 

I would hope that every single person here would have considered that very question when choosing real estate in the first place, instead of passive investments like stocks. 

@Joe Villeneuve, I’m not sure I understand your reply.  Are you implying that you’ve outsourced every aspect of your business, and now have a totally passive revenue stream?

Sorry if it’s a dumb question - I just haven’t done a deal yet, so I don’t know how long things take. 

Why even consider it?  Because Real Estate isn’t a fully passive income stream.  It’s worth considering your time investment when comparing it to truly passive investments, like stocks. 

But, like I said, I haven’t done deals, so I’m partially asking just for a frame of reference. How many hours are you spending finding deals?  How many hours do you spend in the rehab phase?  And what’s the kind of average time spent on property management?  How much time do you spend on the back end, on bookkeeping and taxes and other paperwork?

If those times are truly negligible, then this is a silly question.  But if you’re spending dozens or hundreds of hours - I’d like to consider that when comparing the returns to returns of more passive investments. 

I get that it may be difficult or impossible to get exact numbers.  And that’s fine.  I’m just curious about the ballpark.  I’m trying to figure out how passive this business truly is. 

Hello!

I'm new, and still working on understanding analyzing deals.  One thing I wonder is if any investors here have calculated how much time they spend per deal, or how much time they spend on management and maintaining the property?

I've seen various calculations of the return on your investment (cash on cash, total return, etc.), but none of those take your time into account.  Has anyone taken their returns and divided them by the hours spent to see what the return is per hour?  

Do you know how much you make per hour?