Does anyone here NOT invest in the area in which they live? I am interested in purchasing my first property for renting. I live in Vegas and anything under $250,000 (actually there is only about 40 properties in this range on the market) is located in bad areas (drugs, gangs, high transient). Since this will be my first rental property, I want to start very small to get some experience.
I was wondering if anyone else has picked up rental props in states other than their home state and what made you determine where to look? Right now, I am looking at middle america because I see loads of homes 100k and below. IE Ohio
I want to stick in the sub 100k market for my first rental because I can afford the 20% down (would love to get the seller to carry 10%) AND if the property is vacant while I am learning or whatever, it won’t kill me.
Also curious is there is a must-have book/course out there for this purpose. I have read many books around the subject. Most offer general info.
Lastly, what are the big issues with an area you look at specifically?
I do have properties far away from my home state of NJ-like halfway around the world in Thailand.A $100,000 one bedroom condo in the midwest would cost $300,000 in my area but cost me only $15,000 in Bangkok.So I have about 20 of them there all being managed by a management company.As a foreigner I paid all cash and no mortgages.And the best part is after the 1997 Asian crisis the real estate market bottomed there and is now on its way back up,thus my $15,000 condos are heading back to there pre-1997 prices of $40,000-$50,000 each.
Of course I do travel a lot and do business around Asia,so if you are looking for properties within the US only,you should pick areas you can visit frequently or that are close by.Out west look into UT,OR,NM,etc.
Real Estate Riches and Millionaire Real Estate Investor are 2 current releases that I just read and are very well-written and concise and practical.
Good demographics with good schools and high educational levels,good high tech growth industries and high income levels,low taxes and low crime rates,etc.Medium size cities with a good university situated in them are good possibilities.
My advice is for you to find a better mortgage broker.
Here are the guidelines I’ve been given.
Less than 600 mid qualifying credit score 20% down
More than 600 mid qualifying credit score 10%
More than 700 0% with a 80/20 conventional (NO PMI)
Well, not sure that has anything to do with what I am asking, but I am sure I can get into a home for 10% down. Whole 20% down was just rambling really.
I am looking for pre-100k areas where a good number of folks live so I can rant the property out. The west coast is NOT the place for this at all. If you found one it would either be in the middle of nowhere in a town of 300 (no thanks) or a mobile home in roughly the same type of place (not interesting in MHs).
This is why I took my search to middle America, to places like Ohio.
Not sure what a property management business does and if I should seek one out since I am doing 1 property only.
Property management companies are if you have a dozen or more single familys or several multi-units.I started out with only a few condos that I easily managed myself but am sure you are thinking of expanding your future empire to need help from them
later on.I think with todays prices you should invest in a small multi-family for the cash flow.Save up and when the market corrects put the smallest down payments possbile on condos or single familys for their future appreciation.If you get a 4 family or less and live in one unit,you can get a owner-occupied residential loan which is far better and cheaper than a commercial one.
Ok, I got a question. I went to realtor.com and found many multi-family units in one state. Seems like MF units are the way to go over single family homes.
Anyway, I just wanted to get thoughts on something here to see if I should go forward with the education process.
Cost: $155k
3 units, rented out.
Estimated gross income: $17220
Estimated net income: $11300
Estimated total expenses: $5920
I know there is a whole ton of info to look over but here are a couple Q’s.
Do these units appreciation likes single homes? IE if homes in this area go up 10%, will this property have went up 10%?
Is the price based mainly on rent?
Would this be considered a residential loan? It is 5+ that is commercial right? I would not be living in any MF prop I purchased.
No this is not a good deal you should not buy it. But to be sure give me the owners name and address and I will check it out for you.
;D
Seriously to answer your question. For realistic numbers I multiply the Total gross by 90% my target fill rate. Which this is not always easy to do. This is one thing you should check is the vacancy rate for the area. I do this by driving the neighborhood. (I don’t know of any better way to do it.)
It depends on the area but most of the time yes. Unless of course we are talking the slums.
All appraisals I have seen reflect sq footage and comp sales. Rental income DOES affect the property to an extent.
Each lender has it’s own criteria. But 3 units under 200K, I would say that would be investment.
I agree that Houston is a good market. In Houston you can get a 1300 sqft rent house with 3 bedroom, 2 bath, 2 car garage in good shape for around $85,000. The note on that house including taxes and insurance is about $600/month. These houses rent for about $850 to $950/month. That gives you $200 to $300 per month. That means that 10 of these houses (that are all over the place) will provide you with enough for the property manager and profit.
I live in Houston and manage my own properties. I do know that these Property Managers charge about 10% of the gross rent, with discounts for multiple properties. They will lease your property at a charge of one month. They should not charge you anything if the property is vacant. They will do any requested manitenance for you and most have a fixed price and an hourly one.
I have been able to rent my houses in 2 to 3 weeks of placing my signs.
I looked on MLS in Houston and see loads of homes in the $50k range (sure they need some work). Are these viable homes too or should I look only in the 75-100 range?
If anyone has any websites about Houston info, be appreciated.
Perhaps I can attend a tax lien sale while I am there.
evergreen
I have invested in a few markets. I still love the Denver market. Check out www.recolorado.com they are estimating a 40% hick in price over the next four years if not even at 5.87% average that is still good.I buy here all the time 25-35% below market and get in and out in a month or less! And when I feel like working I do 15 deals a month And if I buy a 200k house and get a 100% loan there better be a check for at least 45k waiting for me at closing that covers my mortgage for 5 years and my rent is income!
I am mainly looking for sub-100k properties to hold and rent. I don’t want cash back at closing that has to be paid back. I rather have a lower mortgage since I plan to own the properties for some time.
So far, Texas seems the closest market that is viable to Vegas that I have found. Still looking.
I would use this link and come up with some possibilities. http://www.har.com I would then contact a Property manager and discuss the pros and cons. They can tell you what areas that they prefer you work in. Ask a couple of them and believe the areas that they both suggest. I would then make a trip to Houston and look over the area to make my decision. I would then search those areas for my criteria (price/rent cashflow) until I find some houses.
yes, I used that link the other day and found it useful. I have been reading non-stop on Houston and will visit there shortly. While there, I plan to drive drive drive.
Think I am pretty settled on making Houston and surrounding area my claim.
