All Forum Posts by: Jason Schmidt

so can someone only truly reasonably expect that they can receive $25 a month positive cash flow in the instance below throughout the duration of the loan?

After reading "The Millionaire Real Estate Investor" the author was illustrating how the longer you have your property, the lower your % Return on Equity ((annual price appreciation + annual debt pay down + annual cash flow) / total equity in the property). He mentioned that many investors will maximize their money's earning power by pulling out the cash and re-investing. Very interesting concept! BUT - one thing I noticed: how on earth is the cash flow column increasing in his example so quickly? For example, on a 70k house, the cash flow was $300 annually. Within 5 years, it was nearly $1200 annually. Then it clicked: the loan stays the same, but your power to raise rents goes up! So, for example:

$700/mo rents to start out with (1% of prop)
$25/mo cash flow

but in 5 years, @ 5% increase a year, the rent is now $890
$890 - $700 = $190.
$190 + $25 = $215 a month cash flow instead of just $25 a month.

Please, please forgive me if I am not making sense, or if my numbers are off. But is this concept correct?

any input???

I have been reading a bit, and it sounds like some folks automatically raise their rents about 5% each year. Is that pretty typical? What do you all do?

what does this government bail out mean to us? Should I put a hold on looking at property? Should I stop trying to pay down my house? Should I consider pulling out the 25k+ equity i have in it already? What do you all think???

oh! i thought a prop. management company would handle evictions, finding tentants, receiving money, etc. for you. Am I wrong?

Oh, and I am in Texas

I just read that the US is considering a takeover of Freddie Mac and Fannie May - how does this affect us as real estate investors?

Here is the yahoo link to the story: http://biz.yahoo.com/nytimes/080711/1194793612725.html?.v=4

thanks for the info, Michael! A lot of this should be taken care of by the property management company though, right?

i want to buy and hold - to be a landlord. i am just nervous to take the plunge - mainly because i don't know where to look!

very good point - so how to weed them out? heck - i don't care about weeding yet - i havent found any. WHERE TO GO to find them???

Hmmm, has TimWieneke had a little too much to drienekey tonight? :beer:

sorry - just really confused by what you said :)