All Forum Posts by: Stone Jin

*I don't think anyone can give you a good answer.

@Thomas Lee Nuckles Depends on what you are comfortable with.  If you are new to real estate maybe buying something close by so you can learn the process.  If you are a pro, then buying for appreciation for some markets and cashflow for others.  Without knowing your goal and situation, I think anyone can give you a good answer.

You should just buy them at home depot and install yourself.  You get to save some money and learn how to do it.  

Are you going to rent it to them at $1500?  If so then you will cashflow a little bit depending on how much you put down.  Let's say you rent it to them at your cost.  You still get the depreciation and appreciation and amortization aspects of real estate.  Seems like a no brainer to me.  

You would have to run the numbers on opportunity cost though.  Can you invest the capital and then subsidize their rent with the profit etc etc etc.  

I think you will need to look at your model.  I personally think you would be more successful using leverage at 25% to buy 2 properties at 100K each that will rent for 1200-1300 then you would buying an all cash purchase that rents for $700.   Once you figure in insurance/taxes/management/cap ex, there is not a lot left over on the $700, maybe $200-$300, but with the leverage you may get $500-$700 for the same 60K spent.

Just remember paper returns are not real returns.  Tenants that can only afford $700 vs $1300 are going to turn over more often and do more damage more often.  

@Brandon Criner Investing out of state is difficult for sure.  I'm currently in the middle of my first one where I haven't set foot in the property.  Flying blind is definitely an interesting approach.  We did 2 last year where I was in Toledo for quite a bit of it.

If you want to PM with the type of work you are trying to do I can try to help put you in touch with some contractors I've used before.

Next step after the rehab is to figure out if I can self manage from 2000 miles away!  I may be crazy after all.

@Kye Delahoussaye-Kendrick In late 2008 we bought a 1/1 in a community where we lived in. The unit got as much as 200K in 2007 and was listed foreclosure at 75K. At the time I was just transitioning to a new job and my loan was denied so I had to beg and plea with family to help out. We bought with cash and got a renter in Jan 1 of 2009 for $725. The rest is history as they say. We exited the property in 2017 at $135K and bought 2 SFH that have so far combined appreciated about 60K.

The one thing that I learned in 2009 was that even having a few rentals threw off enough cashflow to pay my mortgage.  I was unemployed in 2009 for 9 months and survived because of real estate.  RE is not a game changer, it's a life changer.

Pros: it likely will bring in more money.

Cons: its a full time job

We owned and managed 4 STR in Phoenix area for 6 years. It became too much for us to manage so we sold and traded into SFH long term properties. Best decision ever.

Good luck

@Mindy Jensen I tip it over into the back of my truck.  When I unload I leave it upright for about an hour.  If you don't have a truck, find a friend that has a truck.

Also depending on the spread you can find people on craigslist that will help you move it for a small fee.  If you buy a $300 fridge adding $50 in delivery is still better than $1200 delivered fridge.  

Lastly the seller will sometimes deliver if you ask.  

Good luck!

@Mason Clinger, it doesn't have to be hold or sell.  You can cash out refi or heloc and use that capital to fund future purchases.  Sounds like you can pull out quite a bit however it will just kill your cashflow.  It's just a math question you have to answer, if you pull out 60K at 5.5%, can you invest it to get 9%, if so why wouldn't you profit on the spread.  

However just looking at the ratio between rent to purchase price, the ratio is not very strong meaning you likely can get better cashflow if you just sold it and became a private money lender at 10%.  10% of 150K equity is 15K a year vs cashflow of 500 a month is $6K.   

I'm in the same position on several properties where my return on equity is garbage.  So I've thought about your scenario a lot recently.

Good luck!