All Forum Posts by: Stone Jin

@Albert Gutierrez really depends on what you are willing to accept, if 6% cash on cash and 4% appreciation is solid for you then sure, if you are expecting 10% cash on cash and 8% appreciation, probably not going to happen in AZ.

@Nia Dixon it depends on your budget.

@Gordon Lu I'm curious as to what kind of cashflow do you receive for $600 rent after PITI and management.

Also is OCF managing your class A rentals?

Thanks I’m advance

@Sharon Hsu  Your property manager should have some solutions for you.  However if I were in your position, I would just sell at a loss and move on.  You will likely spend more money and headache repairing and renting then you would get in the upside of the sales price.  Talk to a wholesaler and maybe they will be able to help you market it to their buyers list.

Just remember everyone successful all started with owning nothing.  Good luck on your journey!

I don't think any SFH on MLS in Phoenix metro will cashflow over the long run if you are financing. Basically I see houses that rent at the .6% of purchase price monthly. @Ashley Obasi If you are investing outside of your local area, why not pick a market that cashflows better?  Are you looking at Phoenix for appreciation?

Without getting overly political.  For those who ask "who's going to pay for it?"  The answer is we are as a society.  Right now with 4% unemployment the general consensus is that 60% of the population is living pay check to pay check and some high percent don't have a $500 cushion.  Imagine what happens if unemployment goes to just 10% or 15%.  

The reality is that we are not far from this today with all the social programs out there.  I see it every day with my tenants.  Imagine a society where 20% of the population can not afford food, what do you think will happen?  Do you think they will just quietly sit and starve to death?  Likely not, either they will go and do something they normally wouldn't do, or the government will provide something they normally won't.

However to answer @Wes Blackwell's questions.

1) An extra $1000 a month wouldn't not affect us at all.  It would go into the general budget and be spent as needed.

2)Phoenix market.  I think if the population has more money and the demand for house stays the same then the rents will go up significantly.  I don't see why the rents in Phoenix wouldn't be comparable to current rents in CA since the disposable income for residents have increased.

3)We would continue with our current system of annual increases and adjusting to market rents when tenants move out.  It would be in alignment with our current strategy of staying just below market rents and offering a good product and experience.   The market rents however will sky rocket!

@Lisa Rayle

We bought our first investment in 2008 November.   We paid 75K for a 1bed 1bath condo.  It rented for $725 for a couple of years 2009/2010.  We cash flowed since we paid cash however if you were to finance that project it would probably have broken even at best.

Looking over the past 10 years, our biggest losers are the two properties we bought in 2005 and 2006 as personal residences. When we converted them to rentals in 2011, we lost money each year on the SFH for about 4 years before the rents rose enough to make a little bit. The condo we bought we had to Short Term rent it to just break even.

Given my experience, I would suspect that many buy and hold investors who bought before the crash probably had very lean years if they held on.  The properties we bought from 2009-2014 are working out fantastic.

I hope this provides some insight.

Stone

@Shiloh Lundahl my entire out of state investing strategy hinges on the fact that people will pay more to be in the best school districts.  I firmly believe that in today's economy where both parents work that public schooling for their children is their number 1 priority.  The tops 5% of earners out there can do whatever they want however most will never go with an untraditional option like home school.  Just like most people choose to give birth at a hospital when home birth or birthing centers exists.

@Marcus B Hsu let them make an offer and see where they stand.  A win win is a deal where both parties are happy.  I wouldn't offer any concessions or even the price until you see what they can qualify for.  If they are only approved for $340K then the conversation will be quite different than if they were qualified for 400K.