Anyone successful with real estate investments?

[bank5]

Any advice for someone whose thinking about renting a home? What have you learned from the process and how do you feel about real estate vs stocks?

 

[Nords]

Any advice for someone whose thinking about renting a home?

My advice would be to run a keyword search for "landlording"...

What have you learned from the process and how do you feel about real estate vs stocks?

... and read through at least these threads:
http://www.early-retirement.org/forums/f28/real-estate-reits-and-similar-as-an-investment-40656.html
http://www.early-retirement.org/for...figure-out-which-direction-to-take-39379.html
http://www.early-retirement.org/forums/f28/time-to-increase-allocation-to-illiquid-assets-38943.html
http://www.early-retirement.org/forums/f30/rental-property-management-companies-37932.html
http://www.early-retirement.org/forums/f30/investment-property-need-advice-37853.html
http://www.early-retirement.org/forums/f27/landlording-for-fun-and-profit-story-35202.html
http://www.early-retirement.org/forums/f28/advantages-disadvantages-of-rental-property-19149.html
http://www.early-retirement.org/forums/f28/landlording-21573.html
http://www.early-retirement.org/forums/f28/rental-income-to-fi-re-earlier-29518.html
http://www.early-retirement.org/forums/f27/rental-property-36150.html

Moderators, maybe someone will want to finish this up for a FAQ entry.

 

[mathjak107]

no one can really answer that question as real estate is all about the art of the deal.... most of the money is made based on the buy not on the sell...

the growth we just went thru is very untypical and appreciation is much much slower , its very neighborhood specific..

real este is more about cash flow and in the eralyy years that can be tough to achieve...

having done both i much prefer equities.. in fact i would never be a land lord again once a family real state business is finally fully liquidated now

 

[CuppaJoe]

no one can really answer that question as real estate is all about the art of the deal.... most of the money is made based on the buy not on the sell...

....

Interesting. I've never bought real estate but that's the sense I get, mathjak. My former landlord/apt. bldg. owner's sign was removed from my apt. bldg. last week, after he lost some 70+ buildings to foreclosure, rumor has it that there are more to go. The City Attorney wants to run him out of town altogether but that's another story. Does seem like a gamble. In an interview he once described the rush he gets at closings.

Thanks to my research into my former (love that word in this context) landlord's business practices, I never invested in REITs so didn't lose in that sector. Yes, bank5, I also prefer equities, and at the moment am buying indexes.

 

[honobob]

Here's more good reading..

http://www.early-retirement.org/forums/f27/hawaii-home-buyers-mortgage-math-32373.html?highlight=real+property+appreciation
http://www.early-retirement.org/forums/f27/5-000-luxury-oceanfront-condo-38497.html?highlight=real+property+appreciation
http://www.early-retirement.org/forums/f28/the-real-real-estate-appreciation-rate-33318.html?highlight=real+property+appreciation
http://www.early-retirement.org/forums/f27/prediction-california-real-estate-23267.html?highlight=real+property+appreciation
http://www.early-retirement.org/forums/f27/real-estate-do-we-still-have-holdouts-33600.html?highlight=real+property+appreciation
http://www.early-retirement.org/forums/f30/looking-for-a-great-personal-finance-plan-that-will-make-me-wealthy-in-30-years-34655.html?highlight=real+property+appreciation
http://www.early-retirement.org/forums/f28/get-rich-fast-you-chump-30098.html?highlight=real+property+appreciation

Real estate has done very well for me. Equities not so much. I'm a happy real estate guy and have always been. Most market investors seem to be in a constant state of apprehension at best.

I would look for info from a successful RE investor and not pay alot of attention to the unsuccessful ones.

Check out Neighborhoodscout.com You'll find areas in almost every city that has had double digit appreciation over the last 20 years.

 

[calmloki]

For me, investing in real estate has been a job. It's been a job that has been quite profitable over the last 25 years and has generated enough income to keep us happy and FI for the last 15 or so. Prior to that we both worked and pushed money as well as time into the rentals. We have not been flippers and have invested in problem places that attracted us - run down old homes or multi-units that just (hah!) needed a little vision (and lots of time, effort, money, and engaging personality) (if you are fixing old places, dealing with inspectors, and trying to spend your money to best effect then the skill sets of a procurer or fixer or schmoozer are handy).

We started from pretty much nothing but our natural abilities and now are able to stick about our annual living expenses into savings each year. Turning 60 this year, and am trying to either sell off the properties or train a successor and sell to him. Not the best time to be selling, but it sure is good not to have to sell - we just walked away from a sale on a little rental we own - showing it to two other people this weekend.

With some of our savings we've been making property loans - those have turned out very well thus far and have been free of the tenant interaction that is wearing on me. Should you buy a rental property? Dunno - there are lots of landlord types and ways to run rentals. I will say that it disturbs me much less when i feel i have some control over the performance of my investment. I feel i can influence whether a tenant chooses my clean & happy one bedroom apartment vs. the one maintained by an uncaring landlord down the street. I don't get that happy feeling with my GM or BofA stock - it doubles or halves in value in lockstep with everybody elses GM or BofA.

I'll say, in closing, that i have never seen interest rates like these. I'll also say that a week or so ago i was looking at more property to buy - and i am trying to sell off our stuff!

This is the kind of stuff that attracts me - not from a pure profit motive, but because i like it:
http://www.early-retirement.org/for...land-in-united-states-43252-3.html#post801436

Also looked at a 2004 1600sqft 3/2 for $100k which was tempting -
but i'm such a sucker for cheap old weird stuff.

 

[bank5]

Thanks for the information everyone. This is something that I'm always going back and forth on. I bought my house 3 years ago and it's appreciated a fair amount. I'm pretty sure I could get a positive cash flow from renting it out. The downside would be the headaches/added stress from landlording. I'm also not sure we'll we be able to find a second house that we like as much as our first. I'll probably wait another year and then put more consideration into it. I just need to get rid of the voice in my head telling me to take advantage of the financial opportunity.

 

[accountingsucks]

There is a pretty good thread here on it:

Ask me about real estate investing - Two Plus Two Poker Forum

As prices have come down in my area, some properties are starting to look somewhat attractive but I'm not too interested yet as I think prices may come down another 20% in my area.

 

[unclemick]

Sometimes the tenants are better than the landlord(me).

New Orleans duplex,. Did ok BUT I recognized early on - I'm not the landlord type so I never traded up or expanded my RE empire.

If you master the skill set and enjoy it - I know people who did rental RE, raw land, and small commercial and poo poo'd my stock investing.

It can be done.

heh heh heh -

 

[calmloki]

There is a pretty good thread here on it:

Ask me about real estate investing - Two Plus Two Poker Forum
....

This looks to be a real good link - the answer man spex x reads like he's got real experience. Good example of a different style of landlording - spex x does far more networking than i and has a far more onerous application process. We've both made money.

 

[Letj]

Any advice for someone whose thinking about renting a home? What have you learned from the process and how do you feel about real estate vs stocks?

I have been successfully a lot more than I anticipated. We've bought and sold several homes during the boom but about 3 years ago we started to buy properties at rock bottom prices, fix rent them out. We currently own 14 most of which are rented to section 8 tenants (great program for landlords). Most landlords would not do what we do. We buy single family homes which require minor cosmetics in borderline neighborhoods and rent them out to mostly section 8 tenants. After that, the property is on auto pilot. Monthly payments are wired to our account from section 8 and tenants mail their checks. We only go back to the neighborhood for repair calls; we receive very few of these calls.

 

[nun]

I bought a 2 family house in 1997 for $325k to diversify. I live in one unit and rent the other. It's worth $500k now (down from a peak of $600k) and I only have a couple of years left on the mortgage. Once that's done the house will produce $15k a year in rent. So I have capital appreciation and income too. It's worked out for me even with the housing crash.

 

[Dennis]

Well, my Buddy an ins. guy, owned SF Homes and rented them out
While I, Owned just other TownHomes That I lived in and was on the Board of for yrs.. This gave me inside Control and Cherry picked Potential Renters that had to get approval thru the Board...

My Buddy had some Surprises over the net 20 yrs and not alot of fun, but he managed and got thru them, then he Removed the rental Home off the market, but he offically moved into the place, but actually put 2 of his College kids in it, and after 4 yrs and when they finished College, He then sold it and avoided alot of extra Cap gains Taxes..( doubt can still do that now)...

On the otherhand? I sole my Onw Twnhome and moved into my 1st rental one for a few yrs, then sold it and moved into the Next one for a few yrs and then sold it.. All along avoiding those Cap gains taxes too..ave 4250k on each place and the last one sold for $300k..in o4'.

Just to build up my Retirement Savings along the way.. and it worked out very well.. We then Moved about 60 miles North into Wi. to our Smaller Retirement Home we've been Remodling for past few yrs and here we are..

My Kids each have a Townhome and one now has 2 more as rentals and are following suit.. One is in Brooklyn, NY and owns a Brownstone place with 2 apts. in them( a couple of doors down from the one shown on recent This Old House TV show series ...)...

IF you do it right and not get Careless and can devote a Few Hours a Month? go for it! It will payoff , I'd say at least Double what owning and living in just one home does.. And if you get the Wife & Kids trained to do the work? you can go Play Golf instead...LOL

 

[LRAO]

Letj,

Where can I get information on being a provider/contracted with Section 8?

Thanks.

 

[HpRyder]

Letj,

Where can I get information on being a provider/contracted with Section 8?

Thanks.

Just call your local HUD office. Or just go their web sit. You'll get more than all the information you want.

Good luck.

 

[Arif]

A few warnings about section 8.
1. Not all housing offices are created equal. Some have subpar case managers
2. Screen section 8 tenants just like you would any other tenant. Just because you're getting most of your money from the gov't doesn't mean you can be lax.

With that said I've been using section 8 to fill my rentals for the last 7 years. Even though we live in Texas we're able to manage our rentals in Georgia with no problems.

 

[Martha]

I suggest potential landlords take a look at these pictures:

Inside the Messiest Apartment in Houston. Ever. » Swamplot: Houston’s Real Estate Landscape

 

[calmloki]

I suggest potential landlords take a look at these pictures:

Inside the Messiest Apartment in Houston. Ever. » Swamplot: Houston’s Real Estate Landscape

Think Tryan said it wasn't so bad last time these were posted - clean & paint vs. repair. It does happen though - have done dump runs with 3/4 ton of trash from one place - and that's after returning goods to tenant and any of her friends & relatives i could cajole into taking stuff. Not fun though.

 

[Notmuchlonger]

I want to puke just looking at that.

 

[calmloki]

Some of the better off people in our town happen to own the garbage truck franchise. Big money taking care of stuff others don't want to touch.

 

[Notmuchlonger]

Some of the better off people in our town happen to own the garbage truck franchise. Big money taking care of stuff others don't want to touch.

Yep used to know a guy who made tons cleaning up other peoples waste. Someone has to do it Just not me.

 

[Nords]

Think Tryan said it wasn't so bad last time these were posted - clean & paint vs. repair. It does happen though - have done dump runs with 3/4 ton of trash from one place - and that's after returning goods to tenant and any of her friends & relatives i could cajole into taking stuff. Not fun though.

We went to a realtor's Open House where the property looked like that.

You know it's going to be interesting when the house looks like crap as you pull up to the driveway-- no paint in over a decade, dry rot everywhere, landscape overgrown and fence falling down. Then a cleancut aloha-clad individual wearing a realtor's nametag comes out of the house carrying a huge trash bag in each hand, and dumps them in the back of a pickup.

When we got inside they weren't asking you to remove your slippers and stay on the carpet protectors. They were removing the carpets. It wasn't quite as bad as the Houston photos, but it looked like the "Animal House" set after the cast was finished rehearsing. Speaking as a submariner, the smell of cigarettes (of several types) and human waste was simply indescribable.

I asked the realtor why he'd taken the listing. His answer was that it was a tough market and would probably be a quick sale to a sweat-equity buyer. In the meantime they were charging the seller $75/hour for their cleaning services.

 

[Arif]

We went to a realtor's Open House where the property looked like that.

You know it's going to be interesting when the house looks like crap as you pull up to the driveway-- no paint in over a decade, dry rot everywhere, landscape overgrown and fence falling down. Then a cleancut aloha-clad individual wearing a realtor's nametag comes out of the house carrying a huge trash bag in each hand, and dumps them in the back of a pickup.

When we got inside they weren't asking you to remove your slippers and stay on the carpet protectors. They were removing the carpets. It wasn't quite as bad as the Houston photos, but it looked like the "Animal House" set after the cast was finished rehearsing. Speaking as a submariner, the smell of cigarettes (of several types) and human waste was simply indescribable.

I asked the realtor why he'd taken the listing. His answer was that it was a tough market and would probably be a quick sale to a sweat-equity buyer. In the meantime they were charging the seller $75/hour for their cleaning services.

Why on earth would the agent have an open house with the house in that condition? Seems like they would wait until the place was atleast decent. Probably would of got a better price.

 

[Nords]

Why on earth would the agent have an open house with the house in that condition?

Eh, realtors no talk stink here.

But from their body language and what wasn't said, I think they shrugged their shoulders and did as the seller dictated. The sellers were living on the Mainland and their son (whom they'd appointed as "caretaker") was leaving the property shortly to join the military. So I guess the sellers were reluctant to have a vacant house in that condition and were in a hurry to sell as quickly as possible no matter what the offers.

The house came on the market as we were trying to distance ourselves from a "We buy houses for cash!!" guy who we'd naively assumed was ready to do business with us. When we decided we were done talking with him, he'd decided to keep calling with "more ideas". So we gave him the address of this place and suggested that he might get a better deal from that owner, and we haven't heard from him since...

 

[tryan]

Big money taking care of stuff others don't want to touch.

Well said!

Made 3 offers on bank owned properties in the last 2 weeks. 50-60k for property that foreclosed in the 175-225k range. Got within 5 and 8k via counter offers. One was snatched up by a owner occupant (can't compete with THAT). The one active offer is unfinancible (mold) so I expect the bank will have adjust the price for a cash sale. We'll see ... real estate is fun again!