All Forum Posts by: Michael Lauther

Mel you are absolutely correct, knowing the area is the key. If you decide to invest out of state you need to know the market as well if not better than the one you live in. In the past I invested close to home and let the false security of being in close proximity to my investment cause me to hold on well past any point that would be profitable. I did this while markets outside my area were ripe for picking up great rental properties.I could have sold but I decided to hold on until the market turned around . It hasn't and I am now forced to take a large loss. Knowing the area is a good reason to stay but only if it remains profitable.

Mel: If your triple is only netting 5% I would consider selling it and find a market that would return more. That is if your market value has held.
If you were to invest in SF homes at the lower end of the financial scale you could find properties that would conform to the 2% 50% guide talked about on this site. It would mean for instance finding properties that can be purchased for 25k rented for 500 month and would return 12% based on 250 monthly cost for taxes insurance maintenance management etc. . this is not an easy task and it would mean finding and purchasing 25 new properties. The net return would be 12% and based on the 635000 you would have to invest that would mean $76,200 As usual the devil is in the details. In order to do this you need first to find markets that will support this type of rent to price ratio.
Kansas City Mo , Memphis TN, and Several cities in OH are ones that I have found. Next you need to get to know the neighborhoods in detail as there are war zones in every city that will suck the money right out of your investments. A good property manager, real estate agent, and construction company, title company will be valuable in this regard.
There are many investors who say that the guide of 2% 50% is not attainable but I would direct you to several turn key operations who do this and better every day in markets that support these numbers. If they can do it so can you. Of course the easy option is to find a turn key operation you trust and let them do the leg work. I believe you will still do better than the 5% return you are currently getting.

I have set up checking accounts for the purpose of collecting money owed and usually paid in cash. I Give deposit slips to those who owe me the money and they deposit the cash into the account noting their name on the deposit slip. they keep the slip and i print a copy from my TD bank web site. I have not had a problem yet with this arrangement but i dont use it extensively.

Bill: there are many fine homes that make sense as a personal residence but not as a real estate investment. It appears that you still have equity so you still have the option of selling the property and not be stuck with a short sale situation. it has been said that a bird in the hand is worth two in the bush. I would sell and look for investment in another area. I give this advice admittedly based on very little information. I have been holding a property myself that has now gone significantly underwater and i feel like those unfortunate souls on the Hindenburg that clung to the ropes while they burned. Sorry for the philosophical tone but your post hit home to me.

Based on 50% of your rent going for taxes, insurance, maintenance, property management. and vacancy allocation, you would have a net income of :
8500/2 =4250 x 12= 51000 annually divided by 350000 invested =14.57% this however is only the beginning of your evaluation. you now must consider the market that each of these properties is in and look at vacancy rates, crime rates, current rental rates, quality of the leases in place, and deffered maintenance.
I am sure others will think of more of these variables that will either increase of decrease your return. Even though these properties are in the same general area I have experienced large swings in these factors within just a few miles.

Have you checked out the eviction requirements in your state. I have seen HUD homes send out forms that allow renters and sometimes even home owners remain in their homes after foreclosure. Renters do have rights.Did you sigh a lease or is it a month to month rental? I am sure many of the landlords on this site know the eviction requirements in their state, perhaps a landlord in Colorado can give us the rules there. Before you uproot your family you should use all the tools that the law allows.
Also if there is a short sale pending there has to be a contract for sale at some price. Did you sign a contract? If you did not the bank will not entertain a short sale. Who is the real estate broker that handled the transaction. If there is no contract there is no short sale application pending. I am not a legal expert it is only information i have learned through experience so please check this out.

Jon, I have to admit that I sometimes read your posts even if I have no interest in the topic. Thanks for your insight and wisdom, I have benefited from both. Also thanks for turning me on to spell check by using Firefox as a browser.

I just replaced copper pipes in a small 2 bedroom one bath home. pipes ran to kitchen sink, bathroom toilet, sink and tub.
used Pex cost including labor was 1100, had estimates that ranged to over $2100.
this is in Dayton OH.

just replaced all the stolen copper pipes with Pex, a little less expensive than copper and no one wants to steal it. as for the thieves that stripped the copper wire, i have no alternative.

It appears Alice that your assertion is a Condo is more of a commodity and as such would be susceptible to downward price moves more so than a SFR. I believe that Condos may be more risky for the reasons Ann Bellamy Cited, "additional risk of the condo assn, and because of the reduced exit strategy if it's not 75% owner occupied." I would like to hear more details about these risks.