All Forum Posts by: Watson Smith

I wouldn't expect their return to be that high. I'd say under 5%. But its a lot easier to make money when you have 1,000's of properties returning that then just 2. Their also betting on homes prices increasing and rents going up. Later down the road they'll probably sell some of the houses and act as the bank on them. Double their money while collect interest. They'll get some on the houses back due to foreclosing on them and sell them again. With the number of proerties they hold the skys the limit. They won't stay in the rental business forever though. They'll have to adjust with the market.

I deal with rentals and I'd say the return is well worth it. You're not going to become a millionaire over night... or in the next 10 years either. It's like any other type of investing... Start young and let it grow. Without using numbers think about it this way. You own a piece of property that someone else is paying for, you're capturing the appreciation and you're making a little off of it. Not a bad deal.

To me an equity millionaire and a cash millionaire are close enough. When you talk about someones worth that includes the equity in their business and house... Not just bank account.

I'd say there are quite a few millionaires on here. It takes a while to build that wealth but its worth it in the end.

I'm with Randy. I like tile. Anywhere there is water use title. Its not too expensive at $0.60 a sqft then 1.25 - 1.50a sqft in labor. Use a multi-color carpet to hide stains. I wouldn't use granite in 150k neighborhood or S.S. appliances. Your neighborhood is what sells the house. Nice homes also attract people who can't afford something but think they can. Keep everything clean and new looking and you'll be fine. I would use one paint color as well but not white. Give it some life. Most tenants say how they love that my houses are painted and not just white or light grey. I've also painted my bathrooms different colors from the rest of the house. Just try and make it feel homey and not so cookie cutter. You don't have to spend a lot of $$$ to do that.

I just closed on one from Auction.com. I feel I got a fair deal. They company is not ran well. You'll have 10 different people calling you asking the same info that was asked the previous 9 times... Closing date was pushed back 3 extra weeks and my "closing specialist" was never in her office when I called... I mean never. You won't lose your money with them but its not a very professional experience. The house I bought was vacant and they did not allow you to go inside and look either.

Like already stated you can normally get above "market" rent. Like many things the government over pays. Also, keep in mind uncle sam knows how much you're getting for rent so come tax time no cheating!

I do low income housing but stopped doing section 8. Not due to bad tenants but I rather give my time and houses to people who work for them. Its a personal preference.

First, I wouldn't buy a duplex that only profited 200 a month when rented. Second, I'd buy a cheap SFR in a decent part of town that were discounted correctly due to the repairs needs. Go through the rehab of the house hands on. This way you'll see and understand what makes a good house and how to value them. Third, use financing as much as you can right now. It's cheap. This isn't the stock market where you have to have cash to buy everything. In real estate you can leverage easily. I know you want to have a clear title on the house but would you rather have 1 or 2 50k homes bringing in 1,500 a month or 10 bringing in 300 each a month? With more houses you can diversify easier.

I'm a fan of the rental idea and I'll explain why. There's no reason to be flipping a house now. Zero. Can you pick up a few extra bucks... Sure. Rents are at a peak while housing prices are recovering. Your not going to get top dollar for a sale but you will for a rental. Buy cheap, sell high. Right now is not a high time.

I don't buy 100k -200k properties for rentals. My max after rehab is under 50k. My properties are not in a war zone but I wouldn't walk the streets at night either. The houses are rentals and that's it. I'm not expecting much appreciation on them just a constant return. That's my strategy and everyone has their own.

I'm not a fan of the rent to own either. You have to lock in a price now... which you don't want to do. The best case is that you finance them the house and they default on the loan in a few years and you sell it again. I've known a person who sold the same house 12 times... I know it's horrible but he made a killing on it.

If I were you I'd pick up cheaper rentals where you could bring home 300-500 a month off each house. Not in crack neighborhoods but in neighborhoods that are full, not a lot of houses for sale, has kids playing and on a public transportation route. They don't have to be good areas just not terrible ones. Then start buying in different areas. You don't want 10 houses all in the same neighborhood. That neighborhood goes down then your in trouble. It's like buying stocks. Diversify yourself. Some are going to hit some aren't. Hope this helped some.

If this is your first rehab project I would double what you think your repairs and time frame is. Second there is no way I'd ever pay 10k for 6 months of money. That's like a payday loan. If the project doesn't go as quick as you plan your in trouble. How important is credit and income? Very important. Look.. if the house is that great of a deal buy it for yourself. Get an FHA loan... Then rent it out. Have someone else pay the mortgage until you're in a better position. Plus, in a few years time it will be worth more. Buy and hold now.. flip later. I would not do the project you have laid out. To much could go wrong.

Exterior: I use sherwin williams super paint (mid grade so your not painting it very other year)

Interior: SW ProMar 400 (low grade but still twice as good as what HD or walmart sells)

I have mine in an S Corp. No double taxation and your allowed vacations... I mean... shareholder meetings anywhere that can be written off. Plus a number of other things. TN? I hope your not a Vols fan..... lol

You can get a HELOC to buy the property and then do a cash-out refi on it to get a 30 year fixed mortgage at 3.5%. You'll have to pay closing cost and they will only allow you to cash-out 75% of the appraised value so make sure you buy it at a good discount. I think they will only let you carry 4 mortgages though so keep that in mind.