Comments on: How I Failed at Buying a Rental Property

By: VJ

VJ — Sun, 28 Apr 2019 03:21:06 +0000

In reply to Sohale. Capital appreciation and refinancing seems great in a bull market. Could end up in disaster when housing prices fall - the whole empire built on leverage will fall like a pack of cards

By: vince

vince — Sun, 24 Feb 2019 04:53:09 +0000

REIT’s (Real Estate Investment Trusts) are pretty good to start out. Richuncles.com is a good established company. It’s like how RobinHood automates their stock platform.

By: Steven

Steven — Sat, 14 Oct 2017 19:51:28 +0000

But what if your accountant was wrong? What if the houses value today is 50k more? What if today you would have 10 rentals but never started because of him. Just something to think about.

By: Dave @ AffordEverything.com

Dave @ AffordEverything.com — Sun, 09 Oct 2016 16:58:36 +0000

I guess my experience is different because I have had great success with rental properties, a little background on me…I grew up in a rough neighborhood where personal finance is not generally the topic of discussion. I actually accidently stumbled on to real estate investing, and even though a lot of people tried to talk me out of it, I realized that it was ultimately a large step in creating my passive income stream! I would like to share with you, my post on how I accidentally started building passive income http://affordeverything.com/how-i-accidentally-started-building-passive-income/

By: J. Money

J. Money — Mon, 05 Sep 2016 15:03:58 +0000

In reply to Gerald Peters. Nice!!

By: Gerald Peters

Gerald Peters — Mon, 05 Sep 2016 13:56:48 +0000

Ive made millions and steady cash flow with rental houses. U must use same common biz sense of any other business. If your upside down on cash flow invest some money into your equity then refinance to get it cash flow positive. People go wrong not reinvesting in thier business. Airlines, cab companies etc have to buy new planes, new cabs etc u at times need to reinvest in your business. A house can pay cash flow for generations. But u must invest back into your business that my mean putting enough money in to cash flow. U will get your money back over time. My 21 houses increase in value by4-5% yr, rents increase 4-5% yr (more cash flow) loans decrease monthly equity increase each month. Networth increase of 100k yr if i dont save a penny. Where else can this happen? I make more then my cpa and lawyer i work few hours a wk on houses.

By: Ten Factorial Rocks

Ten Factorial Rocks — Mon, 25 Jul 2016 02:43:30 +0000

Good honest post. These pitfalls are rarely mentioned by many real estate investors. Imagine if 12% gross rental yield per year (1% per month) is not so good, what would 4.4% be? Yet, it was considered a no-brainer investment in an unshakeable market. See here: http://tenfactorialrocks.com/buying-vs-renting-a-capital-tale/

By: J. Money

J. Money — Fri, 29 Apr 2016 10:08:03 +0000

In reply to David Wendelken.

Fore sure – totally different situations, agreed.

Glad you’re enjoying the discussion here – thanks for chiming in and adding to it throughout the comments (just approved all your comments :))

By: David Wendelken

David Wendelken — Fri, 29 Apr 2016 03:24:09 +0000

In reply to Geff.

Geff,

In some real estate markets it simply isn’t possible to do. In that case, one should invest in a different market!

However, the process of buying a house retail versus buying one to invest in as a rental property or a flip is quite different. If you try to buy a house at retail you’ll have a lot more difficulty making money renting it out.

There are many ways to solve that problem. Lots of books and instructional courses that teach this to choose from!

I buy houses at 35 to 45% of after repair retail value and rehab them to get them ready to rent. By the time I’m done rehabbing, I’ve invested a total of 55% to 60% of the home’s after repair retail value. I’m renting them out at a monthly rate that’s about 1.66% of the total cost. I would love to get to 2% but I still have more to learn and practice before I get deals that good.

I could buy another 10 to 20 houses like the 3 I already have if I had the money in hand and the time to fix them all up in a quick manner. (I don’t!) So I’ll have to content myself with acquiring them at a slower rate.

By: David Wendelken

David Wendelken — Fri, 29 Apr 2016 03:14:24 +0000

In reply to Jeff Rose.

Being successful at real estate investing requires finding the right property at the right price and terms. Picking the right property requires local real estate knowledge. This is something that an attentive and methodical individual can pick up over the course of a year or three.

A REIT has a bunch of money to invest and they will pick a target market. Unless they have people with local knowledge picking the right properties for them, they are unlikely to get the right properties at the right terms and conditions.

They can’t just hire a realtor to find them properties because the realtor will make just as much money selling them a bad property as a good one. Actually, they’ll make more because it takes less effort to find the wrong property. :)

Until I find a REIT that has figured out how to align local real estate knowledge with their out-of-town money pockets I’m not interested in national level REITs.