All Forum Posts by: Stone Jin

For those of you that said that rents can be raised, what can it be raised to? I would agree that the interest rate will like be Low to mid 5 if it is non owner occupied. I just got an investor loan on a SFH at 5.375 with 25% down.

Also anyone know if they are going to redevelop the old southwyck mall.  

@Sean Dezoysa it's all about supply and demand.  if you have a good product at a fair price you will always have renters.  Toledo has been declining in population for like 30 years, however there are still many renters and landlords with occupied properties.  I don't see any of these cities going to 0.  If you were in a small town with 1 major employer and that employer leaves, then you are basically screwed but with larger top #100 cities I don't see that happening.

@Ryan McCook A wise investor told me that you can only pay your bills with cashflow.  Diversifying into cashflow markets is a good idea.  Buying into C neighborhoods out of state is probably not a good cashflow play.  The real returns on cashflow on those investments are usually much worse than on paper.   We are selling a small part of our portfolio in Phoenix to fund acquisition in the midwest.  We like the appreciation of the Phoenix market and the cashflow of the midwest market so it's a good balance.  I wouldn't go all in on either but having that balance is good.  If you can maybe sell 1 of your Phoenix properties and buy 2 in the midwest and see how it goes for 1 year.  Sounds like if you free up 1 conventional slot, you can buy 2 financed properties with a 1031 exchange.  That seems a much safer way to diversify.  

If you are really considering buying in rougher neighborhoods, I would suggest you fly out there and drive them.  I think a lot of out of state investors have no clue what tough neighborhoods really look like.  Go educate yourself on that, a plane ticket and a couple nights in a hotel might be the best investment you make all year.

@Blair Ellis depends on the purchase price.  500 cashflow on a 25K investment (leveraged) is good.  500 cashflow on a 200K investments is not so good.  With that said, I know Greenville is experience massive growth so there probably will be some run way on appreciation too.  

@Ricco Pirozzoli Go buy a  plane ticket and drive the area.  There are some really really tough neighborhoods in Toledo.  You don't want to buy a $60K prison cell or worse $60K coffin.  I would be cautious esp since you are going to live there.  

@Ryan Swan I'm not a rehabber/developer/flipper.  Maybe @Garrick Oconnell or @Michael Hacker can answer with construction costs locally.  I was more thinking of converting a garage into a studio or to that extent.

If you can't find one that comes with a separate unit, you can always build one!

Short term rental a guest room or buy a house with a separate guest quarters and rent that piece out.  The traditional small multi families in Phoenix are in garbage neighborhoods generally.  If you are house hacking live where you want to live and try to make that work.  I wouldn't go live in a rough neighborhood just so I can have a rough neighbor.

@Fidelis O. I'm an out of state investor so in theory it would be in my best interest to use property management.  However because I have many systems in place for my rentals that I self manage locally I am attempting to self manage a few of them in Toledo.  I have a couple properties with a professional manager and he does okay.  Communication is a little lacking but responsive when I have to chase him down.  If you are planning on doing low rent rentals then I would use a property manager because the $70 a month is well worth it to not have to deal with the day to day stuff.  My rentals average $1600 a month rents so it's a much larger chunk by dollar not percent.  The reality is that if you buy a property and fix everything at the beginning and screen your tenants properly, you won't be receiving many calls and hopefully won't have to chase many tenants for rents.  

In terms of maintenance, out source only what you have to.  For example, roofing, hvac and electrical use a professional.  Paint and small plumbing repairs, try to do them yourself first to understand the process.  Once you understand then outsource them as well.  You need to be the back up to the pro for those items sometimes.  

I would sell.  Of the 1500 (conservative option) 1050 is used for fixed costs.  So you are left with 450 cashflow which need to account for capex vacancy etc etc, so your true cashflow may only be $200 a month.  If your case I would sell and take the money tax free and then look at investing at another time in the future.  @James McVey