I consistantly make a solid 40-50% return on my residential buying and selling.
It’s not hard to do 4 houses a year and net $50,000/home. I’m a Firefighter so I live on the Fire Dept. income (no mortgage, no car payments, no credit card debt) I take the profits from my flipping and roll them into severely depressed stocks and some commercial real estate.
I’ve owned residential rentals and hated every minute of it. I found it infinitely easier to just buy and sell homes then take those profits and SAVE/INVEST THEM!!
Once those savings reach a point were they are actually financing your purchases (in other words, your paying 100% cash for your homes) your holding costs go through the floor, your profits move even higher and before long you realize your sitting on a bank account with $500,000 in it.
Why not take $110K in equity and find yourself a home that’s worth $185K??? Buy it for $100K using the equity line, then put $10,000 worth of lipstick on that dirty girl and sell it (under market value) for $175,000. You WALK with a nice clean $50K net!!! 10 of those in a 5 year period and you’ll have your $500,000… BUT IT’S ALL YOURS!!! Then worry about the 15%.
This is one of the reasons I mention OTHER investments in my posts so often. Real Estate is THE QUICKEST way to INITIAL wealth I have ever seen. (and I’ve tried LOT’S of others)
The issue then becomes…
What do I do once I create that big bank account? There are FAR easier ways to turn $500,000 into $2,000,000 than by renting real estate.
I like flipping homes because I don’t have to MARRY some moron who buys the house I’m selling. They like it, they buy it!!! I’M…D O N E !!! :biggrin
Renting is like be married to that tenant. You usually end up with a relationship with a complete loser.
There are much easier ways to become rich through real estate investing.
I’m not taking away ANYTHING from anyone who does it…Believe me, I have nothing but respect for guy’s like Property manager. He runs his business like a finely tuned machine. That is not an easy thing to do. I know he’ll say it’s not that hard…but he’s spent a lot of “time on the cross” as my grandfather used to say.
Buy 'em and sell 'em…Make a pile of money and DON’T BLOW IT!!! If you can do that a few times a year, you’ll be a millionaire in 10 years. It’s a numbers game. Once you get this machine up and running it’s not hard to buy and sell 8 homes a year…Then your MONEY will make you the $75K a year you can live on and then some!! My money NEVER calls about a plugged toilet or broken heater. My money is never late with rent, I’ve never evicted my money.
(although I have evicted a few bankers from handling that money)
Please RE-READ the DON’T BLOW IT part. I have found through the years that this is the single biggest mistake most new investors make. I have guy’s I know who’ve watched what I was doing. They went out and found some great deals and made money on them!! BUT…They still have mortgages, they still have car payments, they still have Credit card debt.
Because they went out and BLEW the profits on HARLEY’S, BOATS, and CORVETTE’S, stupid sh*t that falls like a rock in value THE DAY YOU BUY IT.
If you can resist the urge to SPEND that money for a few years a funny thing happens to you. You actually LIKE the security having half a million dollars brings to your life. You will also notice that your banker is now doing things for you that he never did before. Free box seats to Red Sox games, free concert tickets, better loan rates, and MUCH higher interest rates on your MONEY because OTHER bankers are trying to GET that money into THEIR banks!!!