All Forum Posts by: Rusty Thompson

One advantage of higher priced rentals is they move a little faster. In my area a rental in a decent part of town (after looking hard) will cost ~$90k, rent for between $1000-$1200

but they go fast, lots of good qualified tenants. And very little turn over. So yes I have to pay a little more, but there are a lot less headaches.

10k is a rediculous #. I did a facelift, and moved a bathroom & it cost me 10k with most of the labor coming from me. I would think 30k is a closer estimate if you are really careful with material choices. I don't know if you will needed licenses electricians and plumbers in your are but that will def. increase costs a lot.
Also keep in mind that you will have to pull permits for the work & that can push your time table out of wack.

But it seems to me that what he want is not unreasonable. if you bought it at 50, even with holding & closing costs you will have a very big margin for overages.

If you flipped it & your comps are correct you could pull in a easy 50k

just my .02$

A little more information. My Mechanic/Friend who works from the garage in the commercially zoned house he rents pays 995$, but its much smaller and much less "professional" than this place.

I've pretty much focused on SFR so far & I have zero experience with commercial property. But the other day I was on my way to one of my properties a transmission repair shop I pass all the time is up for sale. I instantly had the arbitrary thought all investors experience... hmmm I wonder how much they want for that. But never thought to look into it.
Well a couple days later I was doing some market research and stumbled across it on the MLS. Besides having shop space, it also has a attached 3/1 dwelling. Now that sparked my interest. I did a quick walk through & its very "run down" on the inside.
The problem is, I don't know how to value it. Comps are going to be impossible to find. Does anyone have experience with this kind of property? How much over market rent should I expect since they are getting business space & living space? Would it be best to rent them individually, then offer a discount for both? Its def. a niche market.

MLS listing
http://www.wvmls.com/property_single.asp?ID=641463
I feel its still over priced

shop space for rent
http://salem.craigslist.org/off/2634480712.html

any thoughts appreciated

I have to say, This makes me very grateful for the area I live in. NO WAR ZONES. There is not a single neighborhood in my city, POP 150,000, that I would feel unsafe walking in at night. There are a few lower income areas, were the tenants tend to make things look "trashy". But very little gang activity & a very low violence rate. I understand that the margins may not be as great as other areas, but the idea that people need bars on there windows to feel safe is crazy to me.

I find this post very amusing. By deal 40 I'm assuming you mean 40 units. Which would equal out to ~ 23$ a hour, if I assume your comparing it to a 40hr a week job. I know a lot of people (me included) that don't make that much & I don't have any problem eating.

Also consider that 40 units would no longer be "passive income" but if your spending 40hrs a week on average managing them, then you are doing something wrong. So not only would you be making a above average "wage". But it would give you much more time to find all the other units you need to "survive".

My personal retirement goal is 40 units. I think anything more is unnecessary.

I also use a tablet pc with a wacom screen. It comes with a pen which makes signing a lot easier

I have the adobe suit, so I just use writer. But it saves me a lot of time and paper. Any editing software will work, then just print to pdf. I prefer pdfill personally.

Your market is not as depressed as mine, I just Zillowed it. But I also saw a lot of home sales in the 100000 range.

I'm not judging your strategy... But a 22% decrease in value from 8 years ago does not seam like much of a deal in this market. It appears our areas are very similar & I could not make a buy and hold work $$ wise if I was paying that much.

Here are my criteria
3bed 2bath
1200sp ft. or over
built after 1980
In a B- to A+ neighborhood
Less than 100,000

I feel if you make your searches more specific, you are going to have to narrow down your target range. I know when I started the options were overwhelming... but once I got specific things got a lot easier.

I don't agree with everyone about the fixer uppers. Yes they are a little to a lot more work, but if you save $40000 for $10000 of work it seems like a no brainier to me.

Real examples of deals I bought this year

1200sqft 2bd/2bath (converted to 3 bed)
A- neighborhood
Average sale in are of equal home 135,000
purchased for $86000
Into it for $96000
Rents for $1120m

1800sq 3bed/3bath (converted to 4 bed)
B- neighborhood
plus
~1000spft 1bed/1bath (converting to 2 bed)
(1) Average sale in are of equal home 140,000
(2) Average sale in are of equal home 50,000
purchased for $89000
should be into for <$100000 when finished
Will rent for $1700 ($1100 first house, $600 second house)

All I'm saying is that you may need to dig a little deeper. Also consider financing to the limit before going all cash. $600000 of cash can/will go a long way with leverage.