All Forum Posts by: Stone Jin

Sorry my math was wrong, 10 60K houses, so it would take you to 5K. 

So I think you are asking how to increase your cash flow by 3K a month without using any additional cash.  You are saying you can sell a couple properties to get 600K to do a 1031 exchange, correct?  I'm not sure what % of your existing cashflow the 2 properties constitutes.  Assuming based on equity position, they probably constitute a large portion of the cashflow.

Let's work the math backwards.  If you want 5K a month, or 60K a year on 600K, that's a 10% return cash on cash.  There are plenty of markets in the midwest that will yield that return.  But what you are likely exposing yourself to is a different tenant class and asset class.  

You seem to have managing 3 houses down but say you buy 6 60K houses, there is lots of those around.  They likely yield you about 6K a year in passive cashflow, so about 500 a month.  So 3000 + the remainder of what's left of your existing portfolio so you might get to 3300 a month.

Getting to 5K a month with what you have may be a stretch without introducing new capital or leveraging.  You can take the 600K and buy an 2M apartment at whatever the going cap rate, maybe an 8 cap.  I'm not into commercial so my knowledge here is limited, but you can do the math and see if it will give you a better return.  

I've done 6 1031 exchanges this  year, it's worked out well for us.  It is a powerful vehicle to move into larger assets. 

The two thoughts I would put out there is moving from a nice 300K SF asset class to a 50K SF comes with it's own risks.   You mention you want passive income.  Syndication, managing portfolios etc are not forms of passive income, those are jobs.

Sounds like you are an independent/freelance consultant/contractor.  While you have time now, doesn't mean your next contract will allow you the same flexibility.  I'm also an independent contributor in the IT space and I manage my portfolio, so I have 2 jobs, all day everyday.  

Good luck 

Stone

Depends, if you only want to take advantage of the next 6 months through April 2018, then you need to weigh in the costs of signing up for Homeaway or Airbnb.  You also have to weigh in the cost of cleaning, furnishing, management, utilities.  If you were going to do it for longer than the furnishing cost may not be so bad, but to spend 5-10K furnishing a place for just a few months may be a hard pill to swallow.

You also need to determine if the HOA will allow short term rentals, some are enforcing a 30 day minimum.

Lastly, it is a lot of work to manage a short term rental if you plan on doing it yourself.  I would calculate the cost of your time into your numbers.

We've operated VRBO since 2011 and this year we sold all of them.  

Good luck,

Stone

@Jake Saliba thanks for agreeing.

@Luis Aguilar You can certainly buy homes for under 180K in the valley. The question you need to ask yourself is what type of investor do you want to be. Do you want to live in a nice home in a decent part of down for a year and then have a nice SFH as a rental or do you want to deal with tenants that pay $600 a month in a duplex that is 50 years old. The choice is yours my friend.

You can house hack with roommates based. In the phoenix market you may not find something you want to live in if you are not preapproved for at least 180k. You can get a 4 bedroom house in mesa and rent out 3 bedrooms. There are some mfh but not sure the numbers will work.

Each of those neighborhoods have pro's and con's.  You will have to give some insight on your situation and goals for the forums to help.  

I'm also interested in portfolio lenders in Ohio.  My definition is someone that offers a product that can go above the 10 conventional loans.

Put me down for a hard maybe.  :)  I will try to come out.

I agree with @Account Closed, we don't invest in neighborhoods with high crime rates.  The tenant class will more likely give you headaches and not profits.   We typically like investing in neighborhoods that we would consider living in ourselves.  If it's good enough for us, then it'll likely attract tenants of a higher caliber.  

We don't flip so the flippers may have different criteria.  They are probably looking for Chevy in the Cadillac neighborhood.  

We are not looking for killer deals either and we mostly buy from the MLS. The last house I purchased, set to close today. Comps at 250, needs about 5K in work and we paid 205 for it. It'll rent for $1400 when we are done. This one is in Mesa and Gilbert school district.

It really depends on what you are looking for and what your strategy is.  We are buy and hold so we have time on our side.

Good luck out there.

Stone

@Dalton Kiley near downtown Chandler