All Forum Posts by: Elizabeth S.

Originally posted by Chris Adams:

Warren Buffet said it best in an interview when he said its impossible to purchase such a large quantity of homes, and place proper teams to manage the rehab, sale, and property management needed to make such a large quantity of homes perform to their potential, over such a large geographical area such as the United States.
These guys can purchase large blocks of homes in specific zip codes, but REI's are going to heal the bulk of the problem a few homes at time.

I would have to agree with you on this one @Chris Adams. There are always going to be larger investors who can buy more properties but there are also always going to be people getting out of real estate.

You may want to post this in a blog rather than the forum if you want to keep a journal of sorts. If you want feedback and have questions, this is the perfect place!

It sounds like you're on the right path. The next step is one of the hardest and that is actually committing to a house that makes you money and is within your realm to fix up. Look at lots of houses before choosing, there will always be deals. It would not be crazy for you to look at 100 houses. But do it quickly so that you can get started. Good luck!

I started investing in a not so great area of town as well. I went to an auction to buy one house and came home with two. I used my first few purchases to figure out what area and price point was best for me. I would keep your cash flow properties and think about your end goal. Do you want equity or crazy cash flow? You don't have to rent in war zones but find areas a few steps up that are still at good price points. I found an area I like to buy, qualities in the houses (hardwood floors and less than $5000 in work needed immediately) and a price point I can buy and rent for. If a house doesn't meet these criteria and isn't a multi-family I know its not what I'm looking for. This takes time but is an important step.

Originally posted by Robert Steele:

Looking back at my old spreadsheets It took me 3 years to get to $1,671 cash flow per month. Another 5 years to get to $2,333 (rents went down during the housing bubble). And finally the last 4 years to get to $5,128. By now plowing my cash flow, plus a little bit extra, into paying off mortgage debt instead of acquiring more properties this is projected to increase my cash flow to $9,084 in the next 7 years (all other things being equal).

Robert, how did you decide when to stop buying and start paying everything off? I go back and forth between which is best. Any help would be great.

I am a little under $3000 with mortgages and expenses. I've built this over the last 4 years and in the last two have bought two houses a year.

How to do this fast...hmm well cash always helps. I've gone slow because I work full time and have limited resources. I wish I would have known to buy a duplex first and rent half of it and live in the other half. That would have helped speed up the process. Buying with enough margin also helps, my houses all have about $400 of margin per month.

I started my investing with two houses that I bought in 2009, one was $4500 ($375/month rental income) and the other was $8500 ($475/month rental income). I paid those off in 2 years and kept going. I've never tried to live on my rental money and have just put it aside to put back into the property maintenance and buying more. The first two were a learning experience on where to buy (I still own one of those properties), the next one was a learning experience on what to look for when buying (I sold that one, it was horrible) and the rest have been me using those experiences to fine tune what I buy and where. Had I jumped in too quickly I could have had those first two experiences all at once and not made enough money to make it worth the experience.

I don't understand...is this your house and he is staying in the basement? You live upstairs though right? And you haven't had hot water in an attempt to get him out?

Does he ever leave and do you have any other rental spaces? If he does leave...this isn't legal advice by the way!! I would just get all of his stuff out, take his animals to the pound (where he can claim them) and then change the locks. If he wants to call the police you can tell them that you let a friend stay with you and you haven't been able to get him out. If you don't have any other properties you claim that you don't have any knowledge of this type of stuff but you know this is your property and that you are the boss.

Another option is to get your house condemned because there isn't any water on. It takes 7 days from when they post notice (In Indiana at least) and you wouldn't be able to stay in the house either but then he would be out.

Good luck, this sounds terrible!

More to deal with...technically yes. Setting aside the financials which will make or break you, you will have more leases and thus more tenants. Every door is more cash flow but it is also another interaction with a person. Managing rentals can be like getting a good batch of fries at McDonald's...sometimes their cold, sometimes their too salty and sometimes they're just right.

Tenants and financials flow together because as you learn to rent to the right people and screen out the others you will be losing money through vacancies, court costs, damages and your time pursuing all of these things. It's okay to start small and get your feet wet. You have time.

I got started in real estate by borrowing money from a friend of the family for 3 years on my first two properties. My second property was an $8,000 house and I got a $5,000 personal loan from my bank. The next two I used personal mortgages through a bank and put 15% down on those. The two I bought this year I used a commercial loan for and put 20% down.

The key is a combination of credit and cash. If you are up for getting a second job than I would do it. You can never go wrong with having a good chunk of cash for a safety net and then money to buy with.

This is a GREAT post. Good entertainment value.

My favorites always seem to stem around them making at least 3 times the amount of rent or the pets they choose to have as a RENTER.

No, you can not move into my $500/mth duplex when you only bring in $1000 per month in income. No exceptions!! No, I will not rent to you and your two pit bulls...or you, your bull massive and your lab.

It's a great question. I live in Indiana, so not too far from Ohio. I just bought my first house will a bad foundation wall. Other properties have had some dampness or slight cracks but nothing like this. I'm still working through it. I guess I factored it into the repairs and have been crossing my fingers that it doesn't fall over!!

Good luck!