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I want your opinions... for investments

Deltabox3r6 said: "Hey people, about a year and half ago i picked up a newly built single family house in the high desert (cali), it was a so/so investment, its been rented out but one down side is negative cash flow, so i figured its a long term thing anyway, on the other hand i am now thinking about investing again, this time into a multi family I myself am in the mortgage business so the financing part of what i want to ask you people is not my issue, first off I'd like to know if you had a budget of about 1.6 million for a multi family investment, what part of the US would you consider, and if you wouldn't even consider it, why? second would you consider anything else but multi family? Thanks"

FirefighterB said: "Multi-family gives you the best income potential for the money, IMHO. Also, I wouldn't spend that 1.6 million all in one place; especially with the market future being uncertain (actually, pretty negative....especially in Cali) at this point. Now, I've heard over and over again to not invest in areas that you DO NOT LIVE. Being an absentee landlord is a PITA, according to most folks. Even if you don't deal with it, you're cutting into your profits by paying a management company and you, really, have no control over what happens there or ability to see what's happening to your investment. But, should you decide that, I would say a place like Austin, Texas, would be a good area. Mostly because I've lived there and they expect (and are seeing) solid growth numbers over the next 20 years. Prices there are also still reasonable, as you could probably buy 4 different fourplexes in VERy good and desirable areas for your 1.6 million dollar budget. But, even there, the market is softening (although not likely to collapse), so proceed with caution over the next year or so. I still wouldn't buy if you don't live there or have a close friend/someone you trust in the area to watch your investment(s). Again, this is JUST MY OPINION and it's worth what you paid for it...NOTHING."

Deltabox3r6 said: "i'v taken Texas into consideration for the past couple of months now, my friend's dad is buying commercial their like crazy, and by commercial i mean multi family and retail shopping centers, but i would agree with you with the whole management company situation on average its about 5% of the gross rental amount per month that they want, but i guess you just going to have to put up with it until u can get the ball rolling big but that 5% really does tap into you profit margin.... as of rite now looks like this housing slow down wont come to a stop till about end of 2008... maybe worst. hey firefighterb thanks for the reply ."

Aligator said: "Just kinda wondering... Why the 1.6 mil budget? A lot of your success - in my experience - depends on how much cash you enter the market place with. I have seen several people enter with almost nothing, end up with a negative cash flow, and then decide that "rentals are not for them". One the other hand..... Success can be had. I have a friend whose family is deep into multi family rentals. I casually asked him how many units they owned and he said he didn't know. I challenged him and told him I understand if he didn't want to tell me, but no one "doesn't know" how many units they have! He laughed. Well, I really do "don't know", he said. We collect around 2500 rental checks a month, though.! [SIZE="6"][B]YOW![/B][/SIZE]:wave:"

newinvestor123 said: "[QUOTE=Aligator]Well, I really do "don't know", he said. We collect around 2500 rental checks a month, though.![/QUOTE] Holy crap...."

FirefighterB said: "Deltabox - no problem, man. It sounds like you've got a pretty good grasp as to what's going on. Also, I just realized what your handle is. What year R6 are you riding? I had a 2000 a few years ago."

Rickster said: "Take a look at the Pittsburgh Pa area. That place used to be a pit, depressed for decades, but is cleaning up. I lived worked there in 2003 and the turn around was taking shape nicely. But real estate prices were still very reasonable. Last I heard, the trend was continuing."

Deltabox3r6 said: "[QUOTE=Aligator]Just kinda wondering... He laughed. Well, I really do "don't know", he said. We collect around 2500 rental checks a month, though.! [SIZE="6"][B]YOW![/B][/SIZE]:wave:[/QUOTE] thats crazy man... but im just thinking about 8-12 maybe 18 units max so to say... u gotta really be in it and know your game to be handling that kinda of stuff."

Deltabox3r6 said: "[QUOTE=FirefighterB]Deltabox - no problem, man. It sounds like you've got a pretty good grasp as to what's going on. Also, I just realized what your handle is. What year R6 are you riding? I had a 2000 a few years ago.[/QUOTE] lol i knew there would be someone on this forum that would ask, i'v still got her its a 2005 first owner, blue r6.. very nice to know other riders here."

Deltabox3r6 said: "[QUOTE=Rickster]Take a look at the Pittsburgh Pa area. That place used to be a pit, depressed for decades, but is cleaning up. I lived worked there in 2003 and the turn around was taking shape nicely. But real estate prices were still very reasonable. Last I heard, the trend was continuing.[/QUOTE] sounds good, i'll take that into consideration and check it out... what age range are the majority of the people there? thanks"

FirefighterB said: "Nice. Those 6ers are good bikes. I was a Yammy faithful until I found my way to V-twins. I had a TLR for a little over 3 years and I scooped up an RC-Schfifty Juan in April of this year. I absolutely love the thing and don't think I could ever break away from my V-twin overlord, although I'd love an older R1 or Gixxer750/1k for a second bike to get the high HP fix. One day soon... Ride safe and keep the rubber side down."

lil dickie said: "How many renters tear up the units they live in? I bet theres a lot of damage."

EWhytsell said: "Also the central ohio area might not be to bad. At least its not seeing the same problems the worst parts of the country are seeing. Its been in a major population boom and not expecting to reverse for some time. Delaware county was the fastest growing place in the nation in the height of the housing boom, but has slowed down some. I could see it stopping for the next year or so. I'm in the next county east and we are seeing alot of larger 1.5+ acre plots being built on about everywhere they can and a couple of larger lawn sub divisions. Evan"

FirefighterB said: "Maybe Central Ohio is okay, but Dayton and Cleveland are in the crapper. My family says things are pretty bad in Dayton and, with the possibility of Delphi shuttering its doors, they're only going to get worse. I've seen homes in Dayton that sold for 30k in 1999 on the market for 10+ months when they're only asking 20k. BAD."

Deltabox3r6 said: "[QUOTE=FirefighterB]Nice. Those 6ers are good bikes. I was a Yammy faithful until I found my way to V-twins. I had a TLR for a little over 3 years and I scooped up an RC-Schfifty Juan in April of this year. I absolutely love the thing and don't think I could ever break away from my V-twin overlord, although I'd love an older R1 or Gixxer750/1k for a second bike to get the high HP fix. One day soon... Ride safe and keep the rubber side down.[/QUOTE] rc-51... very nice choice man, when it comes down to it u really cant get anything better as far as street/track bikes go rite outta the box... enjoy that beast and like wise ride safe buddy"

Deltabox3r6 said: "[QUOTE=lil dickie]How many renters tear up the units they live in? I bet theres a lot of damage.[/QUOTE] u know thats a good question, but i think its just the luck of the draw and where the property is, I know some areas around southern cali where if you rented out couple of unites in a bad area the unites would be doomed.... my house in the high desert is rented out to a middle aged couple with a dog..."

Deltabox3r6 said: "[QUOTE=EWhytsell]Also the central ohio area might not be to bad. At least its not seeing the same problems the worst parts of the country are seeing. Its been in a major population boom and not expecting to reverse for some time. Delaware county was the fastest growing place in the nation in the height of the housing boom, but has slowed down some. I could see it stopping for the next year or so. I'm in the next county east and we are seeing alot of larger 1.5+ acre plots being built on about everywhere they can and a couple of larger lawn sub divisions. Evan[/QUOTE] I think its mainly the cost of living, I am currently seeing a lot of big corporation that use to be based out of southern cali / the valley area that are now moving or closing down their locations to open new ones over in the south or in the east .. where cost of living is much cheaper then compared to southern cali..."

FirefighterB said: "[QUOTE=lil dickie]How many renters tear up the units they live in? I bet theres a lot of damage.[/QUOTE] I'm sure quite a few do. It's in most people's nature to not take care of something that isn't "theirs" as well as if it were. Plus, it's all a relative view. The new landlord might think stains on the carpet is tearing it up, where thinks it's normal wear and tear. As long as you have checked the prospective tenants out (credit, criminal, references, etc.), have a reasonable expectation of replacing certain things (carpet, paint, maybe a little drywall), and you took a security deposit, you should be okay."

FirefighterB said: "[QUOTE=Deltabox3r6]rc-51... very nice choice man, when it comes down to it u really cant get anything better as far as street/track bikes go rite outta the box... enjoy that beast and like wise ride safe buddy[/QUOTE] Thanks man. It took me quite a few years to finally get one, but I'm definitely very happy with it and it was worth the wait. Have you ever been out to any track days?"

EWhytsell said: "Yeah very true firefighter. If you look at 10 year demographic maps showing population movement. It will show a mass exodus away from Dayton, cinci, Cleveland and all Southeastern Ohio. Toledo has been steady and central Ohio has grown massively. Columbus has moved 12 miles north in 6 years. Its now all built up from I-270 to the edge of Delaware. Evan"

winnikate said: "No need to worry about falling prices of real estate, each and every state is suffering from this problem. The main reason of dropping prices is sub prime crisis which occurred last year and still exists. But people who have taken property on loan from banks are the most sufferers, as they have to pay money with extra taxes on it. Now if any one of you want to invest money in Real estate than you can use your unused money i.e. IRA. Most of the people are not aware of the secret IRS Code. Through this route one can invest his/her IRS funds in real estate without ever going to the bank(depending on the need and the total amount accumulated though) thereby avoiding the costly loans. For more information please visit wealthyira."

lil dickie said: "It is hard for me to believe that investments in Indian real estate are safe."

FirefighterB said: "[QUOTE=lil dickie]It is hard for me to believe that investments in Indian real estate are safe.[/QUOTE] :signs013: Especially when someone with 3 posts is pushing it along with their own dot douchebag dot scam website"

nzapanda said: "Investing in real estate especially for cashflow AND appreciation takes time, research, and work. I've seen too many people look at maybe 10 properties and purchase one, and later get killed. I look at atleast 100 properties and analyze each and every one. Usually by doing this I can find a property with a 20-40% cash on cash return or return on investment (roi). I started investing in these types of vehicles at the age of 18. I did my research, reading investment books, attended a couple seminars and talked to other investors (my real estate agent owned 17 or 18 rental units when I was 18) to get advice and pick their brain. My first purchase was a duplex purchased for 90,000. I had a 95% financing making my mortgage, taxes plus insurance at $885 per month. Rents were going for $650 on one unit, $700 on the other so $1350 total. Now here is where people really lose at..is money management/allocation. I placed $100 each month to a reserves fund that will be capped usually around $3-5k if it accrues this much (for high cost repairs such as recarpeting). $50 per month on smaller maintenance/improvements. $50 per month on lawn maintenance. $60 per month on vacancy loss which is equivalent to 5% vacancy per year or 18.5 days incase tenants were to move after the lease expired. My estimated expenses were $260 per month. So my initial estimated cashflow was 1350-(885+260)= 205 dollars. Yes, yes I know, its not much but its not negative plus its not bad extra money. Heres the better news... The duplex after 18 to 20 months was refinanced and my PITI went down from 885 to 815. Thats an additional $70 per month so $275 cashflow. Remember, I was 18 when I purchased my first property so my credit history wasn't all there so my rates were pretty high. After the refi it dropped almost 1.75 points. Now heres the kicker, the $815 PITI was after I cashed out an additional $10,000 because of appreciation plus the improvements I and my tenants made (my tenants put a flower garden in the front of the duplex). Also before purchasing the property, I put in the contract that I would only purchase if the seller repaired the roof as it wasnt in the best condition. With that $10,000, I could use this to recycle this money into another property, thus creating a exponential growth. Again, it takes time and due diligence. Not just spending 1 or 2 days saying, hey, this house looks pretty and I "think" it should rent this much... Heheh. Anyways, thats my story. Email me if you have any questions :) or visit boomandbusts.com Tony Panda Realty Investments LLC [email]pri.llc@gmail.com[/email]"

colden said: "You wrote: "My first purchase was a duplex purchased for 90,000. I had a 95% financing making my mortgage, taxes plus insurance at $885 per month. Rents were going for $650 on one unit, $700 on the other so $1350 total." Very good investment. But finding a half-way decent duplex at that price is about impossible today when you can safely figure on an absolute minimum investment of $200,000 plus. And rents have not gone up to that degree."

nzapanda said: "I disagree. Most of the duplexes around mine are going for $100,000 - $130,000. Sure, its not easy just to point at one and say, "thats a good deal". No, I looked at over 300 properties (mostly on paper, so no, I didnt physically look at all of them). And your right, it would be considered "impossible" or near impossible to find properties at this price in this condition. If it wasn't, everyone would be purchasing real estate, wouldn't they? Thats why I like this, its challenging enough to weed out 90% of "investors" and allows the other 10% real investors to find an opportunity in this problem. As for the properties in my market... Most properties in my town, including single homes and duplexes, are between $50,000 to 200,000. Now, generally, the demographics here shows that 70% of the house hold income is 20000-40000ish. Individual income is about 15,000 to 25,000. So most properties over 120,000 are usually out of the question as you will have a much smaller market, but it doesn't mean it cant be done. I don't know where you live, but perhaps $200,000 home may sound like a shack to you, but its one of the high end homes in my city. Actually, any home over 150,000 are considered between middle and rich class. The homes around $80,000+ are considered middle class in this area. Tony Panda Realty Investments LLC [email]pri.llc@gmail.com[/email] boomandbusts.com"

Heather said: "It's hard to believe that there are so many duplicate posts. No one seems to be buying into the Indian real estate market.. if you haven't already noticed."

Maverick Investor said: "Hi I've been looking into RA in Buffalo, and it seems to me that there are lots of opportunities there, and some with monster yields! Investing here in the UK, we're lucky to get 10% gross while we're paying 5.5% in interest. I've seen returns over there of 20%, 30%, sometimes even 40% p.a.! Not sure how common these are, but I'm stacking my dollars right now for a bit of a buying blitz! Who was it said the best time to buy is when the blood is running in the streets? Not the most wholesome of images, but this has got to be one of those times! Cheers!"

CazzDeluca said: "Not that I am completely against multifamily but like any investment it comes down to price. Picking up a MF prop now could work well for you or be a horrible management nightmare. If you've got one property under your belt my advice is not to run into a large scale investment like that until you build up a bit more experience in the minutia aspects of multifamily. In the meantime I would look at investing in some bulk REO portfolios. You can usually get them at wholesale prices (around 65% of Value) and they insulate you against most newer investor mistakes. Once you acquire and turn a few of these, you will feel much more confident to move to the MF arena. That being said, you might like it so much you don't want to leave. Let me know if you have any questions about Bulk REO investing and I'll help if I can. It has been extremely profitable for me. Good luck. CD"

Aligator said: "[QUOTE=Maverick Investor;59735]Hi I've been looking into RA in Buffalo, and it seems to me that there are lots of opportunities there, and some with monster yields! Investing here in the UK, we're lucky to get 10% gross while we're paying 5.5% in interest. I've seen returns over there of 20%, 30%, sometimes even 40% p.a.! Not sure how common these are, but I'm stacking my dollars right now for a bit of a buying blitz! Who was it said the best time to buy is when the blood is running in the streets? Not the most wholesome of images, but this has got to be one of those times! Cheers![/QUOTE] Wouldn't bet on that 20 - 40% stuff. If it's a good deal for you over in the U.K. don't you think it is just as good a deal for us? Selling a deal that sweet to a foreign investor is a little like sneaking a lamb chop past a wolf; you just ain't gonna do it. The locals will gobble up all the good stuff."

FirefighterB said: "Exactly. And, while not ALL areas are suffering/going to suffer in the downturn, Buffalo, NY has never really been a market that struck me as being a "goldmine" for real estate investment. I wouldn't get too far from what you know, man. If you have been, explored, and immersed in Buffalo real estate, I'd keep your money on that side of the pond. Like Aligator said, deals that netted that wouldn't slip by buyers here (eg, Las Vegas over the last few years). But, eventually, you get a biiiiiggg bust (eg, Las Vegas NOW)."