I started investing with $25k. I got started out of necessity. I was laid off from a position of 5 years 2 days before closing on my 2nd rental property. My lender was willing to continue to lend to me so I kept going till I got to 7 SF and $3,000 a month in positive cash flow. I started back at work because I wanted to not because I had to.
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Would you say 20-30k is in the ballpark of a normal starting investment or would you want more if you could do it again? I feel as if in various markets that wouldn’t be close to enough. The bay area for example although a great renters market, doesn’t have low enough property values for 30k to be enough money to start. Maybe I’m wrong.
I started investing with $25k. I got started out of necessity. I was laid off from a position of 5 years 2 days before closing on my 2nd rental property. My lender was willing to continue to lend to me so I kept going till I got to 7 SF and $3,000 a month in positive cash flow. I started back at work because I wanted to not because I had to.
[/quote]
Would you say 20-30k is in the ballpark of a normal starting investment or would you want more if you could do it again? I feel as if in various markets that wouldn’t be close to enough. The bay area for example although a great renters market, doesn’t have low enough property values for 30k to be enough money to start. Maybe I’m wrong. [/quote]
Every market is different. Can you actually cash flow a property in the Bay Area, and get a decent return? I have a step brother that was a landlord, but they gave up because they were bleeding money and the laws on land lords were the pits.
More money is always better, but when you were in the situation I was in that is all I had and I made it work.
I started investing with $25k. I got started out of necessity. I was laid off from a position of 5 years 2 days before closing on my 2nd rental property. My lender was willing to continue to lend to me so I kept going till I got to 7 SF and $3,000 a month in positive cash flow. I started back at work because I wanted to not because I had to.
[/quote]
Would you say 20-30k is in the ballpark of a normal starting investment or would you want more if you could do it again? I feel as if in various markets that wouldn’t be close to enough. The bay area for example although a great renters market, doesn’t have low enough property values for 30k to be enough money to start. Maybe I’m wrong. [/quote]
Every market is different. Can you actually cash flow a property in the Bay Area, and get a decent return? I have a step brother that was a landlord, but they gave up because they were bleeding money and the laws on land lords were the pits.
More money is always better, but when you were in the situation I was in that is all I had and I made it work.
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The rules out here seem super vicious and side on the behalf of the renter 9/10 times. Which can get expensive. I doubt there is much opportunity to cash flow a property, but that’s just from my understanding from some basic reading and this thread. I’m always looking into new ways to invest, and this has always gotten a hold of my interest but it’s a bit strange around here money wise.
I started investing with $25k. I got started out of necessity. I was laid off from a position of 5 years 2 days before closing on my 2nd rental property. My lender was willing to continue to lend to me so I kept going till I got to 7 SF and $3,000 a month in positive cash flow. I started back at work because I wanted to not because I had to.
[/quote]
Would you say 20-30k is in the ballpark of a normal starting investment or would you want more if you could do it again? I feel as if in various markets that wouldn’t be close to enough. The bay area for example although a great renters market, doesn’t have low enough property values for 30k to be enough money to start. Maybe I’m wrong. [/quote]
Every market is different. Can you actually cash flow a property in the Bay Area, and get a decent return? I have a step brother that was a landlord, but they gave up because they were bleeding money and the laws on land lords were the pits.
More money is always better, but when you were in the situation I was in that is all I had and I made it work.
[/quote]
The rules out here seem super vicious and side on the behalf of the renter 9/10 times. Which can get expensive. I doubt there is much opportunity to cash flow a property, but that’s just from my understanding from some basic reading and this thread. I’m always looking into new ways to invest, and this has always gotten a hold of my interest but it’s a bit strange around here money wise. [/quote]
There are places in California to invest, but they are rare because of the state and local regs and laws. Arizona is where several of our California Members buy their real estate.
Deals are drying up around the country. Prices are going up.
[quote]thehebrewhero wrote:
Unless you own 20+ units dont give away your profits to management co’s… If you are new to the biz you need to learn the hard way how to screen, evict, and deal with tenants… PM’s also hit you with repairs you dont need and over pay. If your not handy you need to find a good plumber and HVAC guy prior to jumping in the land lord game…
By good I mean cheap… So get ready to scarp any ideologies you have becuase in order to keep costs low its wise to hire out to the immigrant labor populations. Learn to master craigs list… Its the best place for cheap labor & material. I own 5 duplexs & I’ve been a land lord for 10yrs personnaly if the deal doesnt net you at least $1000 in proff per month walk… Theres many deals that will be patient[/quote]
I just became a landlord about a month ago, but $1k/month seems crazy to me. A lot of that has to do with how much money you put down on the house which is reflected in your monthly payment. [/quote]
Duplexs are cash cows, but the appreciation sucks. It is a trade off. I personally only do SF houses because the cash flow is good, and the appreciation is good. I have to get positive cash flow that is the number 1. If you have negative cashflow you will go bankrupt. Appreciation is just icing on the cake. My equity capture and appreciation will allow me to sell my houses and move up into Apartments.[/quote]
The advantage MF properties hold (in my mind anyhow), is that you have more control over the cash flow than you do over appreciation. Since a MF property’s value is tied directly to its cash flow, then you can basically control the appreciation as well.
BTW, as a direct result of this thread I’m putting an offer on my first duplex this week. It is probably going to get shot down with no counter (EDIT: seller is asking roughly 70% more than what it’s worth), but I probably wouldn’t have even started looking at RE investment if this thread had not come along. So thanks everyone for the inspiration!
EDIT: I agree that $1000/month BTCF is a little high. He must be talking about NOI.[/quote]
Dont sweat your offer bro… If your not emabarassed to send it it then its not low enough… It generally takes me 20 offers before I land a deal…Realestate investing is like being a aligator hang by the shore and only eat what comes by thats worth eating… Not knowing your markets I cant speculate but $1000 per month for me is based on my propertys being purchased with 20-25% down… If doing SF homes I buy cash on courthouse steps when the county dose tax sales… Personally I flip all SF’s and do my MFs as long term deals. Making a $1000 isnt that hard you just gotta find the right deal.
Duplexs are cash cows, but the appreciation sucks.[/quote]
That’s what I call a better tax bracket.
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Real Estate Taxes are extremely low. Even if your property appreciates 100% in a day and you sell you can defer the taxes indefinitely because of the 1031 Tax Deferred Exchange.
Duplexs are cash cows, but the appreciation sucks.[/quote]
That’s what I call a better tax bracket.
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Real Estate Taxes are extremely low. Even if your property appreciates 100% in a day and you sell you can defer the taxes indefinitely because of the 1031 Tax Deferred Exchange.
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I’ve done a fair amount of 1031 flips. The problem is you (as a practicality) have to keep getting bigger.
That, and I didn’t sell last year and take my medicine, like I should have. I suppose I’ll hold until we have non-communists in charge.
Just an update, the house is worth more than I thought and the rent comps lower than I thought in the area. Talking 200-300 positive cash flow and 55K in equity. Thinking at this point to polish it up and put it to market. Without trying to 1031 since I do not plan on buying another property for personal use at this time, isnt there some way to avoid the tax on the sale? Something like I had to have lived there for X years or something on those lines?
[quote]Waittz wrote:
Just an update, the house is worth more than I thought and the rent comps lower than I thought in the area. Talking 200-300 positive cash flow and 55K in equity. Thinking at this point to polish it up and put it to market. Without trying to 1031 since I do not plan on buying another property for personal use at this time, isnt there some way to avoid the tax on the sale? Something like I had to have lived there for X years or something on those lines?
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1031 is only for investment purposes. For primary residence use you get $250k in exemptions before you have to pay capital gains taxes. If you only have $55k in equity you will not have to pay any taxes on it.
Duplexs are cash cows, but the appreciation sucks.[/quote]
That’s what I call a better tax bracket.
[/quote]
Real Estate Taxes are extremely low. Even if your property appreciates 100% in a day and you sell you can defer the taxes indefinitely because of the 1031 Tax Deferred Exchange.
[/quote]
I’ve done a fair amount of 1031 flips. The problem is you (as a practicality) have to keep getting bigger.
That, and I didn’t sell last year and take my medicine, like I should have. I suppose I’ll hold until we have non-communists in charge.[/quote]
I agree, but if you start in SF it will take a long time to run out of room. You in New York I see your issues.
Real Estate Taxes are extremely low. Even if your property appreciates 100% in a day and you sell you can defer the taxes indefinitely because of the 1031 Tax Deferred Exchange.
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I don’t want the appreciation. I want the cash. Assess my value at $0 Mr. Assessor, pretty please. I know it’s true worth.
Of course you realize I am not talking flips here.
Shit, I haven’t paid income tax in a lot of years, because I hardly ever get a paycheck. Earned income gives me a sad.
[quote]Waittz wrote:
Just an update, the house is worth more than I thought and the rent comps lower than I thought in the area. Talking 200-300 positive cash flow and 55K in equity. Thinking at this point to polish it up and put it to market. Without trying to 1031 since I do not plan on buying another property for personal use at this time, isnt there some way to avoid the tax on the sale? Something like I had to have lived there for X years or something on those lines?
[/quote]
What’s your plan for the cash when you have it?
I can’t speak for your location, don’t know the laws. Look into a charitable donation perhaps, I’ve seen sales including a donation of proceeds that offset a tax burden, netted the seller more cash with a lower sales price, and the charity wins to boot.
Real Estate Taxes are extremely low. Even if your property appreciates 100% in a day and you sell you can defer the taxes indefinitely because of the 1031 Tax Deferred Exchange.
[/quote]
I don’t want the appreciation. I want the cash. Assess my value at $0 Mr. Assessor, pretty please. I know it’s true worth.
Of course you realize I am not talking flips here.
Shit, I haven’t paid income tax in a lot of years, because I hardly ever get a paycheck. Earned income gives me a sad.[/quote]
You are talking about Property Taxes. That is different. I protest my property assessment every year. Try to get it lower and lower.
I have not paid income tax on my passive income in years either. In fact I get to deduct my losses against my W-2 income. I love my rental properties. Next with the Apartments I can ratchet up the depreciation.
[quote]Waittz wrote:
Just an update, the house is worth more than I thought and the rent comps lower than I thought in the area. Talking 200-300 positive cash flow and 55K in equity. Thinking at this point to polish it up and put it to market. Without trying to 1031 since I do not plan on buying another property for personal use at this time, isnt there some way to avoid the tax on the sale? Something like I had to have lived there for X years or something on those lines?
[/quote]
What’s your plan for the cash when you have it?
I can’t speak for your location, don’t know the laws. Look into a charitable donation perhaps, I’ve seen sales including a donation of proceeds that offset a tax burden, netted the seller more cash with a lower sales price, and the charity wins to boot.
[/quote]
I already give to a charity of my choice monthly. The plan for the cash is the charity of Waittz pocket where it will sit until I can find a way for it to work for me in the best manner.
[quote]Waittz wrote:
Just an update, the house is worth more than I thought and the rent comps lower than I thought in the area. Talking 200-300 positive cash flow and 55K in equity. Thinking at this point to polish it up and put it to market. Without trying to 1031 since I do not plan on buying another property for personal use at this time, isnt there some way to avoid the tax on the sale? Something like I had to have lived there for X years or something on those lines?
[/quote]
What’s your plan for the cash when you have it?
I can’t speak for your location, don’t know the laws. Look into a charitable donation perhaps, I’ve seen sales including a donation of proceeds that offset a tax burden, netted the seller more cash with a lower sales price, and the charity wins to boot.
[/quote]
I already give to a charity of my choice monthly. The plan for the cash is the charity of Waittz pocket where it will sit until I can find a way for it to work for me in the best manner. [/quote]
If you sell your house and pocket $55k you will be able to keep it all tax free.
[quote]Waittz wrote:
Just an update, the house is worth more than I thought and the rent comps lower than I thought in the area. Talking 200-300 positive cash flow and 55K in equity. Thinking at this point to polish it up and put it to market. Without trying to 1031 since I do not plan on buying another property for personal use at this time, isnt there some way to avoid the tax on the sale? Something like I had to have lived there for X years or something on those lines?
[/quote]
What’s your plan for the cash when you have it?
I can’t speak for your location, don’t know the laws. Look into a charitable donation perhaps, I’ve seen sales including a donation of proceeds that offset a tax burden, netted the seller more cash with a lower sales price, and the charity wins to boot.
[/quote]
I already give to a charity of my choice monthly. The plan for the cash is the charity of Waittz pocket where it will sit until I can find a way for it to work for me in the best manner. [/quote]
If you sell your house and pocket $55k you will be able to keep it all tax free.
[/quote]
Yup. Looked into it after you mentioned that. But it will end up being less than that from agent commissions. Still enough of a chunk that I will be prepared to make a move when the right oppurtunity comes up.
[quote]Waittz wrote:
Just an update, the house is worth more than I thought and the rent comps lower than I thought in the area. Talking 200-300 positive cash flow and 55K in equity. Thinking at this point to polish it up and put it to market. Without trying to 1031 since I do not plan on buying another property for personal use at this time, isnt there some way to avoid the tax on the sale? Something like I had to have lived there for X years or something on those lines?
[/quote]
What’s your plan for the cash when you have it?
I can’t speak for your location, don’t know the laws. Look into a charitable donation perhaps, I’ve seen sales including a donation of proceeds that offset a tax burden, netted the seller more cash with a lower sales price, and the charity wins to boot.
[/quote]
I already give to a charity of my choice monthly. The plan for the cash is the charity of Waittz pocket where it will sit until I can find a way for it to work for me in the best manner. [/quote]
If you sell your house and pocket $55k you will be able to keep it all tax free.
[/quote]
Yup. Looked into it after you mentioned that. But it will end up being less than that from agent commissions. Still enough of a chunk that I will be prepared to make a move when the right oppurtunity comes up. [/quote]
As a rule of thumb, multiply the selling price by .92 and that will come close to what you will receive. This does not include any other concession (closing costs, repairs, and other cash items in contract).
I own a condo and duplex. I bought my condo in 97 and have lived there since. I bought a house on a corner lot with a separate 4 car garage in 98. Ten years ago I finished converting the garage into an apartment that I rent out. The mortgage payment really didn’t go up very much so by having them both rented, it works out pretty well.