• Help Support Hardline Crawlers :

Educated opinions....

johneddie

Well-Known Member
Joined
Apr 14, 2012
Messages
1,286
Location
Somerset Ky
The wife and I have been discussing our exit strategy (retirement). What are your opinions/real life experiences? Been considering rentals (new vs existing), flipping older homes, and storage units. Sure some of you guys have experience with this. We're not expecting returns like ya see on HGTV...keeping it real. We're not contractors but we work closely with a lot people in the construction industry. We are in small town America ....Somerset Ky.
Looking forward to the feedback!
 
Re:

From my reading the more work you can do, greater your return. Buy house in neighborhoods that have the better schools. I'm sure you know, but don't buy without fully know what's up with the house so you don't go to deep.

Think it's a great way to stay busy and make some money. Make it a small business to write of cell phone bills, Internet bills, blah blah.
 
Besides my 401k company matching plan, I want to get into rental properties, let house A pay for house B, B for C, and so on, get old enough, sell em all and have a nice chunk of bulk moulah. Starting with my current house. Gonna try to have it paid off in the next 5 or so years, build new one, and rent it out, then let the money from it pay for a 2nd rental property, etc. I think it'd be an interesting side job for me that I wouldn't mind keeping up with outside of my normal job.
 
Re:

Mortalis5509 said:
From my reading the more work you can do, greater your return. Buy house in neighborhoods that have the better schools. I'm sure you know, but don't buy without fully know what's up with the house so you don't go to deep.

Think it's a great way to stay busy and make some money. Make it a small business to write of cell phone bills, Internet bills, blah blah.
I've done a little reading on the internet....the basics of getting inspections, location, etc,etc. A lot of its common sense.
We're not afraid of picking up a paint brush. I've laid a little laminate flooring. Don't mind some light landscaping. Some of the finishing touches we've got covered...closet shelving, blinds, shower doors, mirrors, bath hardware, etc..(that's what we do). Realize there is a lot more to it such as electrical, plumbing, structural and HVAC. Not afraid to invest some time, money and labor if the return is there. Thanks for the input! thumb.gif
 
Just like buying used vehicles, you gotta look for that right one with just enough miles on it to make it cheaper than others, but not too many miles to shew buyers away.

I bought a Yukon from a guy that makes his total living dealing real estate and he makes a killing. I wish I could do it on his level. Can't build a trailer park in AL, you can only buy existing ones grandfathered in. He bought one, rents each trailer by the week instead of month, (4 more weeks, or 1 extra month a year that way), and flips houses on the side.

The problem with my nature is that I'm afraid of taking big risks (with money anyways, haha). I figure the only way I will be able to comfortably get into rental properties is little by little. Doing it that way will not generate the return that taking the big risk and diving in could, but I'd feel a whole helluva lot better about knowing that I was financially secure. There's money to be made in real estate, I can see it, and I'm always growing more interested in it. I like threads like these.
 
TacomaJD said:
Just like buying used vehicles, you gotta look for that right one with just enough miles on it to make it cheaper than others, but not too many miles to shew buyers away.

I bought a Yukon from a guy that makes his total living dealing real estate and he makes a killing. I wish I could do it on his level. Can't build a trailer park in AL, you can only buy existing ones grandfathered in. He bought one, rents each trailer by the week instead of month, (4 more weeks, or 1 extra month a year that way), and flips houses on the side.

The problem with my nature is that I'm afraid of taking big risks (with money anyways, haha). I figure the only way I will be able to comfortably get into rental properties is little by little. Doing it that way will not generate the return that taking the big risk and diving in could, but I'd feel a whole helluva lot better about knowing that I was financially secure. There's money to be made in real estate, I can see it, and I'm always growing more interested in it. I like threads like these.
**** scares me too. I'll be 46 in a few months...should've listened to the wife years ago, but hey what's new? See people saying that ya need 5-10 properties to cover expenses that come up on properties 1,2 and 3. Makes sense but we can't start with that many. So wondering if "flipping" may be the way to go and then transition into rentals or rent if if ya can't sell in a timely manner. :dunno:
 
Re:

As long as you can cover all the transaction expenses and profit, I don't see why you couldn't make decent doing that. Scoring foreclosures on the cheap would be where the big profits lie, but like they always say - "Location, location, location!"

You can always dive in, buy one property that you are sure you can at least get your money back out of after any remodeling (if needed) and just test the market. I think it's really one of those things that you learn most of the do's and don'ts after you dive in and get firsthand experience with the market.

For what you are wanting to do in the time alotted, flipping properties would probably be more profitable, and most certainly eliminate a lot of liability over renting.

My problem would be wanting to spend too much fixing the place up because I am OCD with **** like that, and cut or cancel out my profits by doing so.
 
There's been TONS of these houses popping up in Knoxville. If I had it to spare, I'd buy a long piece of property and build about 4 of these on it with a common driveway and rent them all out. Start with one at a time, and build as you go. They appear to be pretty cheap to build, run of the mill Home Depot everything, appliances, fixtures, etc.

 
johneddie said:
**** scares me too. I'll be 46 in a few months...should've listened to the wife years ago, but hey what's new? See people saying that ya need 5-10 properties to cover expenses that come up on properties 1,2 and 3. Makes sense but we can't start with that many. So wondering if "flipping" may be the way to go and then transition into rentals or rent if if ya can't sell in a timely manner. :dunno:

We have some friends who flip houses, they made good money for two years, made one bad decision and wiped out 18 months worth of work. They are still ahead and it is a second job to them but it is a time consumer. It is a risk vs reward situation. If you are ok with risk, flipping houses is a good way to make some money. If you are risk averse then it is probably best to find a more stable way to make extra money.

The problem with rental houses is that money is cheap right now and banks are freeing up mortgages so they can drum up business. Historically, renting is not as desirable as owning; however with the value of the dollar increasing and interest rates creeping up, it may be a good time to get into rentals so you are able to capitalize if interest rates get back to 7 or 8 and people have to resort to renting again. I think the trick is to remain committed to whatever you do and not chase easy money. There is always a good stable business like day trading?
 
money_pit_yj said:
We have some friends who flip houses, they made good money for two years, made one bad decision and wiped out 18 months worth of work. They are still ahead and it is a second job to them but it is a time consumer. It is a risk vs reward situation. If you are ok with risk, flipping houses is a good way to make some money. If you are risk averse then it is probably best to find a more stable way to make extra money.

The problem with rental houses is that money is cheap right now and banks are freeing up mortgages so they can drum up business. Historically, renting is not as desirable as owning; however with the value of the dollar increasing and interest rates creeping up, it may be a good time to get into rentals so you are able to capitalize if interest rates get back to 7 or 8 and people have to resort to renting again. I think the trick is to remain committed to whatever you do and not chase easy money. There is always a good stable business like day trading?
Has to be a regional thing. You CAN'T rent a house in Paola. I mean everything is booked. My parents sold their little house in town I redid for them for more than asking in 2 days. Ridiculous. My buddy is up from Texas and was looking for a rental. Nothing to be had.
 
Re: Re: Educated opinions....

blacksheep10 said:
Has to be a regional thing. You CAN'T rent a house in Paola. I mean everything is booked. My parents sold their little house in town I redid for them for more than asking in 2 days. Ridiculous. My buddy is up from Texas and was looking for a rental. Nothing to be had.
Long, but substantive post warning...

Same here. There will always be people who do not want the commitment of a mortgage. Always. Whether it be responsible young kids ready to venture out on their own, single moms, newly divorcees, or anybody with a shaky job situation. I have a small 2 bed 2 bath house, but it was only 3 yrs old when I bought it 7 yrs ago this June. The house next to mine is nearly identical in size, around 1000 sq ft, of equal age, but with no other structures, and has been a rental house since I've lived here. It has not stayed vacant for longer than 2 months, with about 7 different parties through it...in 7 years. $525 a month. Mine has a 10x12 storage building on it and the 20x24 metal shop I built a few yrs ago, so I know I could at least get $550 easily for it by renting. There's a county specific page on Facebook for people looking to rent or buy properties, and there are folks on there every day looking for places to rent stating that they have good references and steady income. They almost always specify at least 3 bed. My 2 bed house will be less desirable, but maybe that will be a good thing, as the parties that are fine with a 2 bed house may be of a demographic that's more prone to being good renters. Maybe it is regional, but I can see the rental market is really good here.

If you screen your renters well and have a good contract written up by your lawyer, renting doesn't have to be a nightmare. Write things up like no inside pets, no inside smoking, and that you are privi'd to stop in once a month to look things over. This will ensure you find things wrong with the house like leaks and such early on, before it becomes a more costly problem, and have it addressed. Renters wont call you for **** until it's done created a problem for them, which means a bigger problem for you.

Also there is the "rent to own" thing, where you just play the banker, liable for nothing, and get the property back once they've missed a few payments. But then you are more likely to have a disgruntled party being discharged that may **** your **** up before they leave, lowering asset value, generating repair costs.

The key to making a safe investment if you plan to flip houses is to thoroughly know the market in the community you are buying in. Just like how a Toyota Prius may sell good in a larger city, whereas a full size 4wd pickup will be the hot used vehicle outside of the bigger city. Will a bigger nicer 2 story house in a sub division be easier to flip, or will the average single level 3 bed 2 bath 1600 sq ft small family home on the edge of town be more appealing to potential buyers...or what about small houses, afterall small house means more affordable price, but may be less of a profit margin. I'm one to firmly believe you can avoid a lot of risks, by doing immense amounts of homework on surrounding markets of whatever it is you are investing in.
 
People that rent for the most part will tear your house up are nasty and dont give a **** (I know from experiance) the bad thing is they are hard as hell to get out of the house also they have more rights than you the owner if you put the utilites in your name then you can have it turned off when they get a mont behind that way you wont have to settle a big bill to have it turned on again
 
I will have to disagree with that. And maybe that is another regional thing. Not saying it doesn't happen, but if you screen your renters thoroughly, you can eliminate dealing with a lot of trash. Also if you are renting out at a rate that is on the higher side of affordability, it will eliminate more as well. Sure, if you are renting a house trailer out on a half acre of land on a back country road for $350 a month, you are going to attract trash that will destroy it. But with a rate of $500+ a month, and with a strong deposit up front, most irresponsible folks won't be able to conjur up the money, and just overlook it. May take a bit longer to acquire tenants, but the wait will be worth it. You can also do things like make the first 6 months' rent $50 or $100 higher and say if they make it 6 months with no incidents, drop it $50 or$100 for them to help entice them into staying with you. Just like a good employee, take care of your renters and it can prove beneficial.
 
zukimaster said:
^^^ For someone that's never had rental property, you sure do got it figured out! :flipoff1: its a pain in the ass!

I've talked in depth with a lot of very successful folks that do it currently and/or have done it for a very long time, gaining all the knowledge that I can, as it really is something I want to get into. Wish I would have been in the financial position to take on another property when Will sold his house earlier this year dirt cheap. Perfect renter house in the perfect location. It may be a pain in the ass, but so is clocking into work every day! molaugh

I'm open for dispute or shared experience! That's how you learn!
 
There are some great people that rent, but more times than not, its just like the buy here, pay here type car lot people, if they were worth a **** they could go get the money. I had a house rented to a nurse, money wasn't the problem, but her kids ruined the carpet, had a dog in there that chewed up a bunch of wood trim, **** like that goes on, and you will never know about it till they move out. there is money in it, just have to deal with the crap. and it will happen.
 

Latest posts

Top