I am completely new to the area of real estate investment and am really still trying to make sense of the immense amount of information out there. I hear a lot about acquring real estate that, when rented, gives you positive cash flow. However, with the housing prices going through the roof in the US, is it still feasible to find rental properties in the US that generate positive cash flow when you factor in the high (with respect to the rent) monthly mortgage payments? If so, any advice on how to find such properties in a secure way? I live in California, but, again, with the house prices here, I will probably have to look in other states. Any advice on how a situation like this can be managed remotely? Information sources, network of real estate agents for this kind of thing, etc… your advice is much appreaciated.
I am looking to invest up to $100k as down payment for one or multiple properties whose selling price adds up to no more than $500k.
If you have a $100k to spend, then I suggest you first educate yourself. You should purchase anything by Ron Legrand especially his Wholesale/Retail Course. I would also purchase John “Cash” Locke’s course which you can purchase on this site. You might also want to get your real-estate license which will give you a good education, give you access to the MLS, the ability to run comps and network with other agents. With the way home prices are in California, you could also list your family and friends houses for them and make an extra $30k-$40k a year. Think about it, what is the commission on a $500k house? Try $15k.
I would start with also purchasing a program by a company by the name of Emmatek.com. By using this program, you can start a mailing campaign on auto-pilot and go after all the ‘absentee’ owners in your area…
I would recommend you purchase at no more than 80% of market value, as the market in California will correct.
One way that I created some postive cash-flow recently is I purchased a triplex for $325k worth $450k. I put an interest only loan on it at 4.375%. Monthly rent payments = 3K. My monthly mortgage including property taxes is $1650.00 approx.
I dont care about paying it off, all I care about is cash-flow and appreciation. In 5 years I will either pay it off, refinance or do a 1031 exchange to another uprising market…
Jeff, is the interest only loan bank or private lender financed? You got the triplex for about 125K under FMV, was it in the stages of foreclosure?
It was a bank loan and a deal thru an “Absentee” owner.
Hope this helps…
Thanks for the advice Jeff. I will look for all the material you listed.
Hi Alex, I am very interested in talking to you !! I am a native of California(born and raised) MY husband and I have relocated from california and are excited about this growing community (Coastal Georgia)… the answer to your question … YES There is a possiblity of cash flow here !!! HEre we have a naval base which allows you to buy and rent to them housing prices are cheap in comparison to outrageous prices in San Diego COunty Ca! I have houses that are anywhere from 80000- 160,000(beautiful homes !!! ) and can rent from 700-1200.
00 per month we are 90 miles from Savannah Ga and 29 miles from Jacksonville Fl) this place is growing and I have investor and friends that are buying up these houses and then renting them out !