First off, I would like to comment and say that the best “cash flow” (owner/tenant) opportunities I have seen thus far are out-
of-state online/onsite FSBO/REO/Foreclosure bidding auctions.
When I say, “out-of-state,” I am referring to outside of the state
of California. The means to find great rental properties, in my
estimation, have been bidding in an
online/onsite auctions where the rules are flexible.
This leads me to stating that I have recently found a property
that I may win a bid on and it is in Ohio. It is an instant cash flow
property with a tenant in the home and the owner is giving it up
through the online auction process. The home is 2bed/2bath with a mother and child. Also, the rent a month is $400.00 and the yearly tax on the property is $185.00 a year. No immediate repairs needed on the home either. It is in good condition. Ttaking over ownersip should only cost me $19,000 by the close of the bid (unreal).
I am fortunate enough to have $12,000 in my personal cash reserve but I will have to use $7,000 of a revolving credit limit I have.
As long as nothing bizarre pops up, assuming I take over the property in a smoooth deal, then I can make up the money I owe on the property before a caelndar year is up and certainly at the end of the calendar year. The credit line I’m using has a variable APR of 11.5%.
I also flew to the city where the house is located and checked it out and it appears to me to be a solid deal. I have a $10,000 school debt and I currently have no other obligations to pay on anything outside of that. But that will soon change so I am “seizing” the opportunity I feel I have been given.
I have had my cash reserve for a little while now and I would like to use it while the getting is good. My situation will change soon where I may incur rent that I will have to pay in the next 10 months from now and also auto insurance, etc, etc. I have been helped out by my folks when it comes to living expenses in general. I am really fortunate in that regard.
So here is my real concern:
Property Management for an owner that lives out-of-state. How do I find the right person who will take care of any property damage, things that need to be fixed around the home, lawn maintenance, etc? This seems to be the real challenge because I don’t plan on moving to the area where the house is located or anywhere near the state of Ohio anytime soon.
If threre are many more considerations that I should take into account please let me know. I am not trying to act impulsively but I know I don’t have much of anything to lose on this deal for the simple fact that I am not borrowing much of anything to acquire this home and it has instant income value. It can only be an asset because it
will give me extra income on top of the substitute teaching I do.
I really would like this opportunity to open up more real eastate
income properties for me in the future so I can be able to sustain myself with less financial stress. I just want to achieve my own personal property to live in and one for more creative and nonprofit endeavors, in the near future hopefully.
Plus this would give me a good chance to practice dealing with a property, so then in the near future if and when I try to acquire another, I will have a better understanding of what goes into it.
Lastly, I’ll more than likely be living in a mobile home situation in the next 10 months or so to free up extra money and make the rental income stretch a lot farther. I won’t be paying rent in this mobile home/land deal, if I am fortunate.
I would like an opinion primarily on having some management
company deal with the upkeep of the property for me. Besides that, feel free to comment on my scenario. I hope things really turn out for the best because I really feel that this type of opprtunity doesn’t happen often and my current situation is most certainly a gift.
Thanks for reading.