All Forum Posts by: Chris F.

OC homes (and multis don't cashflow easily. A few years back I was looking at a triplex in costa mesa for 500K. rents at the time were around 1500/month, so it would cashflow with 25% down.. barely. of course to recoup the $125K+ acquisition cost, not to mention any initial repairs would have taken decades, unless I sold for appreciation.

Last I heard cap rates in LA were averaging 6-7%. I'm sure OC is a worse proposition.

I'm sure there are some slim "deals" out there that cashflow, but they are few and far in between, and will require major repairs. There are better ways to leverage one's cash.

I'd be interested to hear anyone offer an example of a cash flowing property in OC.

Well a simple question deserves a complicated response;)

If I had a free and clear house I could probably live on the 3K/month, assuming I didn't have any kids still living at home/being supported.

HOWEVER. to "do it right", I'd ask for an additional 15K. Why ? Investing of course! And not just in real estate. Diversification is the key, I'd like to start another business not related to real estate (most likely in technology). This would also account for investment accounts (DRIPS, bonds, stable stuff) and also to account for any "unforseens" such as major medical costs.

I could say I'd like 2 million in liquid assets" but what good is a bunch of unused cash laying around? better to have the bulk of those funds working for me, generating income streams. I'd much prefer cash flow over cash, and if I got into a major bind I could always liquidate some assets, pull equity or some other such thing.

The other benefit is legacy. Handing your children $2 Million is asking it do be exhausted within a decade or two, unless you have supreme confidence in them to invest it wisely, which youth rarely has.

OTOH, handing them a real estate portfolio to manage, learn the business and grow, will teach them to fish. start early and by the time they are ready to take over, they will not only be able to pick up where you left off, but start with an excellent acumen for business, finance, and economics which would server them in any profession they choose.

Of course this is all predicated on suppositions. If you don't have children, or they don't want anything to do with real estate it's a moot point, but a legacy of real estate far surpasses any lump sum gift you could leave them. Just my 2 cents.

Anyhow my tangent is just a way of saying that my investment goals are not only for my own retirement, but for my family as well, after I'm gone. How much of that 20k would actually spend on myself? A fraction. The majority would go to my children, with the liquid dispersed in a trust at an appropriate age.

Agreed. Denver sucks for multifamily rentals.

Is this meet a dead horse ? Any BPers in the Denver/boulder area meeting up?

I've just reverted to out of state investing as this is bad timing in the denver area.

Jon Holdman I meant bars on the windows, though depending on the tenants I may need use of a bar after each trip, so that would be a plus IMHO:)

I've been lurking here a long time, and I do wholeheartedly agree with the 50 % rule. 2% is more of a vague metric to me. bottom line is that will I have enough to cover expenses and pocket a few bucks when everything flushes out. I can't see that happening.

As an example.. duplex- gross rent @ 1500 retails for 200k=898 pi (3.5 %)

that's a bad deal but so far off the workable mark (150K to make it work with 20% down) and most are like this.

maybe I'll luck out on a short sale/reo..

Rich Weese ok that's my fault I misread it. 50% argument aside I'm looking for cashflow

Jon Holdman yes I was hoping for something to eliminate my housing costs..I may be able to make something work and then sell it when I'm done instead of coverting it to a full rental

Jon Holdman I would prefer something family safe. I'm ok with blue collar, etc, but not something with bars. I'm thinking northwest-so westminster/arvada surrounding areas.. broomfield is probably not going to cashflow, I'm guessing.

I'd even be ok with break even-as long as I'm able to cover PITIA and OPEX from rents..

Doable?

Rich Weese so you're saying no one's buying and holding with cashflow anywhere currently? or just in denver? seems like a big blanket statement sir!

There's always money to be made if you look in the right place.. maybe not in denver

well I'm thinking northwest area but I'm just looking to get somethng I can live in that will still cashlow after I leave.. but sounds like that is overly optimistic..I may have to stick to renting for now. and jives with what I've been seeing as well.. quelle bummer:(