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Old 02-18-2011, 04:26 PM   #121
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it's a viable option if one has the stomach for it.

But if it is to be a significant part of retirement funding, the properties have to have enough cash flow to support your spending needs + produce extra for reserves for repairs.

Just in the last 3 months we've had to replace an air conditioning unit ($3,000), repair a privacy fence ($1,000), replace an entire backyard of sod ($2,500) and repair water damage caused by a leaking evaporative coil in the attic ($500). This is on three properties and the oldest property is 10 years old...I'm sure this is just a case of bad luck happening all at once, but if we were retired and counted on the rents to pay our bills we would have been in real trouble without significant reserves.

On the other hand, index funds require no care or feeding other than the occasional rebalancing.
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Old 02-21-2011, 12:04 PM   #122
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We, DW and I, keep going back and forth on this topic. I'm with you, no way do I want the hassle, etc of rentals but DW sees RE as something solid as opposed to equity and bond investments (guess she watches too many of those white collar crime shows on CNBC.... )
Any suggestions as to how I can resolve this difference of opinion...just curious!
Spouse and I have been having the same discussion about our rental for at least the last five years. At least we have cash flow.

If it's any consolation, landlording seems to be like having kids. At first you have no idea what everyone is talking about but they sure have their opinions, and you can have a lot of fun getting started, and it turns out to be a hair-raising ride no matter how much you think you've planned for it. But when it's finally begun then you know exactly when you have as much as you can handle.

Like trading individual stocks or doing other risky investments, it may be worth your time to read the books and set aside a portion of your portfolio for the purpose. Once she gets into the actual planning & execution, your spouse may be a lot less impressed with the reality than the fantasy.

Gosh, I think I just started a blog post. I'm gonna have to fill this one out a bit more.
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Old 02-22-2011, 10:14 PM   #123
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We, DW and I, keep going back and forth on this topic. I'm with you, no way do I want the hassle, etc of rentals but DW sees RE as something solid as opposed to equity and bond investments (guess she watches too many of those white collar crime shows on CNBC.... )

Any suggestions as to how I can resolve this difference of opinion...just curious!

thx
How about creating a "Virtual Landlord Experience" for her? Here are a few helpful tips:

1. Quit paying your mortgage and let her deal with the collection calls.
2. Call her up at 2:00 am and tell her that the upstairs toilet broke "all by itself" and that water is cascading down the stairs and out the front door.
3. Start parking your cars on the lawn "because it's your right to do so" and encourage all your friends to do the same.
4. Take the transmission out of your car and bring it into the living room to rebuild while your are watching TV.
5. Quit paying for trash service, just toss the bags out on the back porch or down the basement stairs.
6. Change the locks and tell her she has to get a court order to enter the premises.
7. Start chain-smoking, and leave cigarettes burning in as many rooms and on as many built-in horizontal surfaces as possible.
8. Start an active "Recycling" program by emptying as many beer cans as possible and collecting them in a conspicuous location on the property to show how "green" you are.
9. Start a home-based pharmaceutical production/distribution business.
10. Get several large mongrel dogs, to "protect your property". Let them bark, breed and roam the neighborhood at will, then threaten to kill anyone who has the audacity to call Animal Control to complain.

Of course, save all of this behavior for after the rental interview, where you showed up neatly dressed, in a clean older car, with a "fiance", promising job and a passable credit app.
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Old 02-23-2011, 12:27 AM   #124
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How about creating a "Virtual Landlord Experience" for her? Here are a few helpful tips
I'd give you a if it wasn't so painfully true.
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Old 09-14-2011, 10:14 PM   #125
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Just wanted to post an update on the real estate progress. I have the sixth home under contract now, am living in one house, and am renting/lease purchasing the other four with a cash flow of $1600 a month. If the sixth property works out I expect to lease purchase the house with a cash flow of $600 a month.

I also consider this a hobby now and am having fun collecting properties.

Mods, can this thread title be changed to a more accurate description of my purpose, 30 With a New Hobby in Real Estate ?
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Old 09-15-2011, 10:27 PM   #126
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Just wanted to post an update on the real estate progress. I have the sixth home under contract now, am living in one house, and am renting/lease purchasing the other four with a cash flow of $1600 a month. If the sixth property works out I expect to lease purchase the house with a cash flow of $600 a month.

I also consider this a hobby now and am having fun collecting properties.

Mods, can this thread title be changed to a more accurate description of my purpose, 30 With a New Hobby in Real Estate ?
I enjoyed this thread, thanks for the update, and thanks for sticking with it despite all the thoughts that you were spamming.

Why change the title? Are you no longer looking to retire early?
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Old 09-17-2011, 02:08 AM   #127
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Thanks Arebelspy.

The title change is complicated. I still would like to retire early, and I feel if real estate is treated like a hobby now (have fun making money for myself), when I leave the day job I'll just have a real estate hobby.

Other commitments have also entered into my life as I'm now engaged and plan on children later. These commitments mean more financial responsibility and stability. It may take a few extra properties or mean working a couple more years.
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Old 09-17-2011, 11:12 AM   #128
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My folks had assorted rental properties, and several of my friends have properties.

I think that the concept of building a portfolio of properties and operating them does not fall into the same category of income as living off your investments. Running 30 properties as your sole source of income is not 'retired', it is a job! And not all of the work can be done on your schedule!

Some folks have done well over the years, but I also know several that have had serious problems with it. Land-lording tends to work well when the economy is working well, when people can get jobs, and when the real estate market is appreciating.
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Old 09-17-2011, 12:14 PM   #129
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I think that the concept of building a portfolio of properties and operating them does not fall into the same category of income as living off your investments. Running 30 properties as your sole source of income is not 'retired', it is a job! And not all of the work can be done on your schedule!
I agree with that, but can't you get a few more properties and use the proceeds to pay a property manager to handle them all? That'd still be some work, dealing with the PM occasionally, but probably no more than most put into their equities investments.
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Old 04-08-2013, 03:53 PM   #130
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srlimoges claimed real estate could get him to ER in 5 years. That was about 2.5 years ago. I am curious how he/she has done.

Would you care to update us on how your strategy is doing?
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Old 04-08-2013, 04:01 PM   #131
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He hasn't logged on since June of last year. Guess his tenants are keeping him busy...
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Old 04-08-2013, 04:18 PM   #132
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A blast of batsh!t nonsense from the past. Gotta love it.
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Old 04-08-2013, 04:27 PM   #133
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A blast of batsh!t nonsense from the past. Gotta love it.
It is always a good idea to look at strategies that challenge pre-conceived notions. If he really followed through, it would be interesting to see how my notions are bearing out.

AND: I am ALWAYS happy to learn from OTHERS mistakes. It costs less.
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Old 04-08-2013, 04:27 PM   #134
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Hey!

Thanks for following up! So an update to my financial situation... in September 2012 I was laid off as a software engineer at the medical devise company I worked for 5 years unfortunately. That income was about 72,000 per year and with my wife's income and investment properties we did okay for the Colorado area. Now fortunately I have the rental properties (all leased as rent to own) and they are currently cash flowing $5,300 per month. They were a third income stream while we were both employed, and we reinvested the cashflow to buy more properties, but now we will use some of that income to live from.

Being forced to leave my job may have been one of the best mixed blessing in my life to date. I'm currently starting a wholesale real estate business that will feed deals to the rent to own side, and I'm working hard at this new business but really enjoy the freedom to self direct my efforts! I can really choose where I want to focus my time and greatly appreciate that gift!

Of our 11 rent to own properties our current net worth is about 800,000.

I don't plan on ever working at a j.o.b. again but I know life is subject to change

And one thing I've learned to say more is 'I love my life!'
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Old 04-08-2013, 04:32 PM   #135
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Looks like our posts crossed paths
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Old 04-08-2013, 04:33 PM   #136
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Since srlimoges hasn't updated you, I'll update on my real estate in retirement.
I net 6300+/mo. So far this yr I've 1) had to make a couple of phone call & emails about late rents, 2) go to the bank to deposit the checks and 3) mail out some billed expense checks. Tracking stocks is more work.
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Old 04-08-2013, 04:37 PM   #137
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Looks like srlimoges posted in while I was composing my response.
Great that your doing so well srlimoges. My wife doesn't want any more RE so we're not buying any more, just coasting on what we have.
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Old 04-08-2013, 04:39 PM   #138
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HpRyder, I agree. Do you have straight rentals or rent to own terms?

I rarely ever get tenant calls or late payments knock on wood. By far and away I spend most my time acquiring new properties (finding deals, lining up financing, finding rent to own candidates).

Out of the rental expense model TIMMUR fortunately I only pay for taxes and insurance as the tenant buyer does the rest (finding wood again).
- Taxes
- Insurance
- Management
- Maintanence
- Utilities
- Repairs
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Old 04-08-2013, 04:54 PM   #139
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All of ours, except 1, are MTM or 1 yr leases which shifts to MTM. That one is a bi-weekly. He's the one I've had to call & email. Evidently he's living paycheck to paycheck and somewhere along the line he'll leave. I do all the management, pay taxes and pay all expenses except utilities and tenant caused maintenance & repairs. I use to do RTO, but after talking with two real estate attorneys found evicting a RTO in Ca is very time consuming and expensive. That, fortunately, was after an RTO left. So I don't do RTO now, not worth the 1yr + attorney + court fees to get an RTO off title claim and out.
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Old 04-08-2013, 04:55 PM   #140
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Are all of the properties in the same location? I think most would laugh at the suggestion that Denver might go the way of Detroit... but then again, people in Detroit would have laughed at the same thing a quarter century ago. Your Michigan counter part might have found themselves with well over $1,000,000 in debt and properties worth a few thousand a piece.

just something to think about.

In theory, what you are doing is a great way to make a lot of money... but the risks are there. I'm sure you're well aware of them.
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