Best Interest rates or Investment ROI?

[OKCShooter]

To me, this is a problem. This example should have never been purchased to make a rental IMO. If I have $100k in property, it better be paying more than $1k per month. And I shouldn't have $103k invested in a house worth $117k 5 years later.

He was actually modeling that after one of my properties that I discussed with him.

There are a couple things wrong the assumptions that he had:

1) The house appraised for $120Kish when I bought it.

When a house is purchased the County Assessor has to use that as its "value" and apply appreciation to that baseline. So, in this example, I paid $103K for a house and immediately had $20K+ in equity. The current value is roughly $135K now.

2) He assumed I got $1K/month but it's actually been under contract from day 1 with the same tenant and rent is $1240/month right now.

So, this house has averaged ~$1200/month over 5 years which has paid $72K back on a $103K investment and the house is worth ~$30K more than I paid.

In essence, I paid $103K and 5 years later got that $103K back.

 

[FullAuto]

That $120k at time of closing is a better number. I don't need 20% equity the day I close, but I'd like to have at least that on the day I have someone move in. All mine are fixer uppers and I don't buy anything move in ready. So I'm gaining a bigger portion of my equity when I'm fixing them up.

 

[OKCShooter]

That $120k at time of closing is a better number. I don't need 20% equity the day I close, but I'd like to have at least that on the day I have someone move in. All mine are fixer uppers and I don't buy anything move in ready. So I'm gaining a bigger portion of my equity when I'm fixing them up.

Not only do I buy "move-in" ready, but often the homeowners stay as tenants. It's a win-win for people that want to get all equity out but not change their lifestyle or situation (especially great for those with kids)

The biggest benefit is that at closing they hand me a rent check and I never have to do any type of prep for a new tenant...they simply go home after closing.

Just a thought.

 

[COZICAN]

Just crunched my year end numbers. All stock investments + 11.48%, slightly better than the DJIA and a little shy of the S&P. I am very pleased knowing that the majority of my retirement savings is in fairly conservative investments. FWIW....I'm + 9.87% average for the last 10 years which include the very ugly 2008. And I don't have to leave my chair.

Coz

 

[CHenry]

I'm + 9.87% average for the last 10 years which include the very ugly 2008. And I don't have to leave my chair.

Coz

This was my point. Sure there is money to be made in real estate but its not for everyone.

 

[FullAuto]

Not only do I buy "move-in" ready, but often the homeowners stay as tenants. It's a win-win for people that want to get all equity out but not change their lifestyle or situation (especially great for those with kids)

The biggest benefit is that at closing they hand me a rent check and I never have to do any type of prep for a new tenant...they simply go home after closing.

Just a thought.

That sounds great and maybe I'll get there some day, but currently I don't think I could pull that off in the price point I'm comfortable with. Even my cheaper homes are fixed up to a certain standard. I've looked at some that were rented where I could buy and leave them in there. But I wasn't comfortable with owning a home in the condition those people were living. I had to pass because I would have had to kick them out immediately and go through the entire thing. The house was priced a little higher because it came "livable" with tenants. But I wasn't paying extra for that type of livable and those tenants.

I'm also not to the point where I want to pay the mortgage on a >$100k home if they become vacant (because anything I buy will have a payment). Payments on these small houses are all under I think $360. I try to structure so 1 house's rent will pay 2 house's payments in case 1 is empty.

 

[CHenry]

That sounds great and maybe I'll get there some day, but currently I don't think I could pull that off in the price point I'm comfortable with. Even my cheaper homes are fixed up to a certain standard. I've looked at some that were rented where I could buy and leave them in there. But I wasn't comfortable with owning a home in the condition those people were living. I had to pass because I would have had to kick them out immediately and go through the entire thing. The house was priced a little higher because it came "livable" with tenants. But I wasn't paying extra for that type of livable and those tenants.

I'm also not to the point where I want to pay the mortgage on a >$100k home if they become vacant (because anything I buy will have a payment). Payments on these small houses are all under I think $360. I try to structure so 1 house's rent will pay 2 house's payments in case 1 is empty.

This sounds like a safe plan to me. Risk has to be figured. I'm not into much risk with the housing market.

 

[-Pjackso]

OKCShooter,
Can you please share your insight on buying prospective rent houses?
(Move-in ready and $125-175K, got it)

Do you finance the houses?
Do you only focus on middle/higher income renters?
Minimum Purchase-to-rent ratio?
Any house or neighborhood requirements?
Do you stay in certain areas? If so, why?

 

[OKCShooter]

OKCShooter,
Can you please share your insight on buying prospective rent houses?
(Move-in ready and $125-175K, got it)

Do you finance the houses?
Do you only focus on middle/higher income renters?
Minimum Purchase-to-rent ratio?
Any house or neighborhood requirements?
Do you stay in certain areas? If so, why?

Sure thing.

First, I do own homes in the value range of $100 - $200K

If I started all over I'd REALLY focus on the $100Kish range (these are all in Edmond). The reasons being, I can get higher returns and I have a larger prospective pool of tenants.

I only buy houses with cash, although there are many investors that finance. Personally, I'd rather own a dozen outright than 60 with 20% down. But, my philosophy is not to have debt.

I believe it is best to only purchase within a 15 mile radius of my own home because it allows me to keep tabs on them and also it's a market I can continually learn.

Whether it's real estate or some other type of investing I recommend you sit down with someone that has succeeded in the area of your interest....no reason not to use knowledge to save yourself from reinventing the wheel.

I've had a few guys PM me asking questions and have visited live with a couple of them...I am willing to sit down with anyone that's interested and Consult them with my principles and show them how I operate my business. I have all the contracts and agreements and contacts to get someone up and running efficiently and with purpose.

 

[JacobDaddy]

I wish one of you would buy my old house and turn it into a rent house.

http://www.zillow.com/homedetails/2205-Hughson-Ave-Oklahoma-City-OK-73141/22040618_zpid/

I don't really want to rent it out myself since I live out of town, and I would like to take the profit from the house an pay off some of my current bills. So whatcha think? Who wants to turn my old house into a rent house? Best part, you can go out in your back yard and shoot all you want! Not in OKC or MWC limits, this area is 4 blocks of Oklahoma County in between the two towns.