Real Estate Pro - answering questions

Stupidasole
Stupidasole

will be answering questions for the next hour or so

All urls found in this thread:
https://www.youtube.com/watch?v=9kGHmIZ4IUY
https://www.youtube.com/watch?v=BHq0gEDzzXM
Crazy_Nice
Crazy_Nice

@Stupidasole
"Real Estate Pro"

aka

"Just passed my first real estate exam"

Boy_vs_Girl
Boy_vs_Girl

@Crazy_Nice
actually, i am not a licensed agent, i don't want to be. although i went through the courses back in 2005.
i am a real estate investor.

Spamalot
Spamalot

@Stupidasole
SAGE

girlDog
girlDog

@Spamalot
tf is your problem?

Illusionz
Illusionz

time's up.
later losers.
stay poor.

Harmless_Venom
Harmless_Venom

fuck i missed the real estate train.. Is shorting it a good move?

w8t4u
w8t4u

@girlDog
@Illusionz
As i said
S
A
G
E
...
OP got no attention

5mileys
5mileys

@Stupidasole

I've recently inherited a property valued at 1.1 million AUD. I'd rather not sell it, as my father purchased it in the 1940's, so I think of it as an heirloom.

I've asked my agent, and he is confident that I could rent it out for $1000 a week. The problem is that, because the mortgage is already payed off, the income I receive as a landlord will be taxed by the government. Should I just live there, and not try to use the property for financial gain?

I've also inherited two other properties -- an upmarket cottage in the Blue Mountains, and a modest apartment in Bondi Beach. I'm yet to ask my agent about their respective values, but I'm guessing that they'll both be modestly valuable. If I were to rent these out as well, would I be able to live comfortably? What are the costs/challenges associated with leasing out several properties simultaneously? Will it be worth the hassle, or should I sell one or two and reinvest the money elsewhere?

Emberfire
Emberfire

@Illusionz
Bye OP! Sorry your fantasy roleplay didn't go as planned.

BlogWobbles
BlogWobbles

@Boy_vs_Girl
i am not a licensed agent, i don't want to be.

I call bullshit.

You aren't a real estate investor. Having direct access to MLS is enormously beneficial. The only ones that aren't licensed realtors are fucking idiots. You save thousands on closing costs, and can run bots to scrape information off of MLS the minute it's posted.

CouchChiller
CouchChiller

@5mileys
4k a month
million dollar house

That doesn't seem worthwhile at all. You could probably use it to offset the costs of holding the house, but that doesn't seem profitable at all, unless you are talking about a tiny ass house on an extremely expensive plot of land.

Soft_member
Soft_member

What city would you recommend buying in today?

With 20-25% down, what roi are you seeing in that city?

What do you think of rust belt cities like Detroit, Cleveland, etc.?

Bidwell
Bidwell

@Harmless_Venom
back
@w8t4u
@Emberfire
the hour was up retread
@5mileys
not familiar with Aussie Laws, but i'm sure a good lawyer can set you up. in the US, we have legal entities called LLC (limited liability company), i presume there's something similar where you live. - if those properties were here and i were the owner: i would rent them out to well qualified tenants. the phantom income should be enough to cover any taxes the lawyer can't negate for you.
phantom income: tax deductions based on costs and assumed depreciation.

idontknow
idontknow

@Soft_member
To clarify, cities in the US only.

kizzmybutt
kizzmybutt

@BlogWobbles
i have one basically "on staff", you dolt. i don't want to have to deal with arm's-length crap, nor do i want to be required to do the so-called 'ongoing education'.

@Soft_member
buy anywhere at anytime, depends on what you are trying to do. fix n flip? hold as rental? commercial? or just a personal residence? vacation home?

Deadlyinx
Deadlyinx

Is there money to be had in selling US real estate overseas? Specifically, in Asia.

Methshot
Methshot

@Stupidasole

When's the current bubble gonna pop? How bad will it be?

Is flip houses worth getting into? Or is it just gambling?

Methnerd
Methnerd

@kizzmybutt
Buy and hold, long term residential rental

Carnalpleasure
Carnalpleasure

@Soft_member
You can be profitable as a landlord anywhere, if you can find properties that suit the market. Same with flipping. Find properties to fix and/or convert to what the market currently wants.

You just have to understand the market in a given area.

Firespawn
Firespawn

@Deadlyinx
quite, i was just reading some about asian investors buying more US property over the past years and each year it rises exponentially.

@Methshot
when the market is saturated. always buy. ride the waves.

@Methnerd
the rule of thumb is a 2% cap rate. higher if u can get it. these exist all over the US right now.
personally, i buy with little to no money down as much as possible and i never agree to paying more than 50% of what i expect to get at retail when paying cash.

SniperGod
SniperGod

@Methshot
Some areas don't even really have a bubble. West coast is going to be spectacular. Vancouver is already starting to flounder now that they are taxing foreign income.

TurtleCat
TurtleCat

@Stupidasole
How did you start? What would be your tips for someone who wants to start learning to be a real estate advisor.

StrangeWizard
StrangeWizard

@Soft_member
With 20-25% down, what roi are you seeing in that city?
What do you think of rust belt cities like Detroit, Cleveland, etc.?
more in depth: 20% down will get you anything you want if you have good credit. i would suggest going for mid tier homes in mid sized midwest towns where you can scoop up properties for 20k-50k that would retail on a good day for 30k-80k. and rent them out at 400-1400/mo depending on area.

my view on detroit is the long game. if you can scoop up some shit properties for <$5k each and sit on them for a matter of years, then when the builders come in sell to them for $20k+

New_Cliche
New_Cliche

@Firespawn
Buy when the market is saturated

dude waht.

I wanted to learn some stuff in this thread, but I'm out. My dad was a commercial real estate investor for 30 years. Buying land or homes when the market is red hot is rock-to-the-head stupid.

Bye.

whereismyname
whereismyname

I assume you're american? I'm a bong but maybe you can give me a few hints.

I bought a run-down house and renovated it. I found that I was able to do it for just under £15,000 to a very high standard, and I'm expecting to sell for double what I bought it for for a big profit, around £100k clean profit

I can do all the trades myself and have a proficiency for getting great deals on all the materials. I want to do this over and over again and I believe I can consistently make far more profit than the other businesses who are doing this locally.

My problem is finance. How do you go about getting finance, or finding an investor to stump up the cash for the actual property? How do you find these people and convince them I'm not going to scam them? Is this a done thing or does everyone use mortgages. Mortgages are too risky and bureaucratic here since I need the money up front to buy the properties at auction.

Need_TLC
Need_TLC

@TurtleCat
real estate advisor.
define your term?

How did you start?
i went to miami university in 2005 and took business and also real estate licensing courses.
i watched the market crash just as i was trying to enter it. no one was bringing on new agents. i went to truck driving. while truck driving i listened to podcast, cd's etc on how to little/no moeny down.

set up my website and advertising by phone/internet when not driving.

sellers call, i buy. buyers/renters call i sell/rent. not driving anymore.

Sir_Gallonhead
Sir_Gallonhead

@New_Cliche
that's not what i said.
when will the bubble pop? when the market is saturated.
but always buy. don't buy at inflated prices though.
@whereismyname
google "hard money lenders"
also, try to get registered with the state as a legit business. have lawyers draw up contracts. partner with other investors who have $.

King_Martha
King_Martha

@Firespawn
a 2% cap rate
2%

OP are you living in a negative interest rate country?

Evil_kitten
Evil_kitten

@whereismyname
Can't speak for britbong laws, but I work with a relatively local credit union, and they broker most of my mortgages. Like many other things, networking is very beneficial.

Getting started can really suck if you don't have liquid cash reserves. I personally deal with a lot of for sale by owner properties who are fucking crazy, and they just want cash in hand asap. There's a lot of creative ways to 'have' short term cash against assets you own, but the legality of things varies from location to location.

Worst case, you are looking at hard money lenders, which is expensive as fuck. Sometimes it's worth it though, and if you have no other alternatives, you just have to eat the cost.

Also, see a lawyer, particularly concerning taxes. Real estate in general has some clusterfucky tax code stuff, and my understanding is that Europe is particularly silly.

5mileys
5mileys

@King_Martha
US is pretty much there, almost at negative interest. 5 year CDs only paying 1.5-2.5% at most banks, but the annual cost of living increases at 7-9%

2% of the purchase/retail price should be the monthly rents collected. = it pays for itself in 50 months.

takes2long
takes2long

@King_Martha
Rentals are done per month.

Better properties generate 2% of their value in rent every month, or at least close to it. That's not pure profit though. Mortgages, taxes, maintenance, etc all eat into that.

askme
askme

@Evil_kitten
@takes2long
looks like we have another investor in the mix, welcome, user!

Poker_Star
Poker_Star

@askme
Kind of curious what your experience with flippers is.

Personally, if I even smell a flipper I just assume I have to redo fucking everything. There's a couple of independent contractors I buy a few properties from every year, who know what I like, and actually do good work, but god damn flippers are a cancer in this industry.

You can't even properly sue the clever ones because they spin up LLCs for every property they flip. You can sue them, win, and manage to collect, but it's an uphill battle.

Deadlyinx
Deadlyinx

@takes2long
who the fuck calculates cap rate based on monthly rent?

Techpill
Techpill

@askme
looks like we have another investor in the mix, welcome, user!

oh god this thread is just making me cringe...

Methnerd
Methnerd

@Sir_Gallonhead
@Evil_kitten
Thanks

I will have around 140k in liquid cash soon. I don't want to buy a 140k house and sell it for 250k though. I want to buy a 300k house, add an extension and sell it for 600k. Margin basically.

What kind of % would a 'hard money lender' expect? I could live with 10% if it gave me flexibility. Bank mortgages here are 2% to 5% but they rarely lend for my kind of purpose.

It just seems like a great deal for someone to loan me 200k and get 5% on their investment in under a year. Worst case for them is that they get their asset back (the property). Where do I begin with networking and finding these people? I don't know any rich people. Bank rates are shit so surely there are rich people who want to lend. I'm not a total autist and I think I could persuade an investor.

TalkBomber
TalkBomber

@Poker_Star
flippers, if they are buying low and fixing everything and selling at retail, i don't deal with them as i never pay retail. but i, at times, will flip a place. wholesalers are 50/50.
@Deadlyinx
it's just the standard metric of whether a deal is worth pursuing.
@Methnerd
in the US, 12-14% usually. maybe upto 20%
facebook business page.
most private lenders will want 7% at minimum, but if you want to secure some cash fast offer up to 15%

TurtleCat
TurtleCat

@Poker_Star
I guess I'm a 'flipper'. Do they often leave you with properties full of problems? How do I build a reputation with people like yourself? I don't cut corners.

@TalkBomber
Thanks I'm searching now. Who typically draws up the contract and pays for the lawyers? Both?

CouchChiller
CouchChiller

@Deadlyinx
It's actually extremely common in real estate. I keep things in terms of yearly on my bookkeeping side, but since rent is payed monthly, people gravitate towards breaking things down into monthly pieces.

It's also convenient for making ballpark estimations on the fly. You just assume 10 good months in a year on average, and move decimal points around. If a property still looks good assuming conditions that bad, it's probably worthwhile to look at it further.

TechHater
TechHater

@TurtleCat
Thanks I'm searching now. Who typically draws up the contract and pays for the lawyers? Both?
as the investor/flipper, you have your lawyer draw up the contract to your desires. - then you shop around for someone willing to sign it.
depending on your market, you may have the other party pay for the legal fees. but ask your local lawyer what is common practice there.
if you are making a nice chunk of cash off the deal, just eat it, so things are smooth and you get good "word of mouth".

StrangeWizard
StrangeWizard

protip:
if i'm getting a nice large lump sum, i will pay for all the incidentals. WDO reports, title search, recording fees, lawyer, etc... based on the word of the seller. but there's a clause that if they told me wrong and thus i have to back out, they are on the hook for all these.

when selling, usually the buyer has access to a ton of cash, so i don't mind having them pay for it all.

but certain circumstances such as a double close and a big enough lump sum, i may eat it on both ends just to get it done.

try not to hold up a 6 figure deal over a 3 figure cost.

King_Martha
King_Martha

@TurtleCat
How do I build a reputation with people like yourself? I don't cut corners.

Depends on who you sell to a bit.

In general, a real estate investor is probably going to be willing to spend a bit beyond what he normally wants to if you've sold him a few good properties, and have a good working relationship with him. Don't let him abuse you, but be willing to slap a builder's warranty on some types of work. Don't assume that it's a mutual back scratching scenario. Your investor 'buddy' certainly wants to cultivate a relationship, but he still wants the first pickings of whatever you are offering, so he might not tell anyone else about you. You can both benefit, but don't assume the best in people.

The contractors I work with come to me because we have a mutual understanding that we want things done quickly, and without bullshit. Either party can walk away, and that's just business. I'll happily throw a few extra grand at a house to get it closer to 'market rates' if I can put it up for rent instantly. Likewise, he's happy to sell it to me for a bit less to cut out the realtors, their fees, and his miscellaneous holding costs. That's mutually beneficial.

When selling to individuals just looking for a home, a lot of their wants are different. An investor wants certain things heavily built, and may care less about aesthetics. Homeowners will still appreciate a warranty, but won't be as picky about random shit like the brand of paint you used. They are more likely to gossip about how good you were to them because they don't gain anything by failing to do so, and are looking to help friends and family. Word of mouth is extremely powerful, and there's no good way to just manufacture that. Biggest thing is just being civil, and explaining things simply. Don't lecture them for hours on details. Just say that you repaired the roof and the attic has brand new insulation, and leave it at that. If they walk, they walk. Don't hound people. A good house sells itself.

Playboyize
Playboyize

@StrangeWizard
try not to hold up a 6 figure deal over a 3 figure cost.

It constantly blows my mind how cheap people are over dumb shit.

I've had several people steal the locks and doorknobs off of all the doors to the place on the day of closing, then try to strong arm it through. Had one woman steal all the lightbulbs while doing a final walkthrough. Just... why. You're closing on a 300,000 transaction, and you are going to try and Jew 6 dollars in used lightbulbs out of me? And you expect me not only to accept it without invoking the 5 figure penalties in our contract, but to not demand a complete followup inspection to make sure you didn't run off with anything else before properly closing?

I'll gladly throw in a new kitchen faucet or some other stupid irrelevance if it makes someone happy, but holy fuck some people are so petty about winning in every conceivable way.

Flameblow
Flameblow

@Playboyize
i feel ya. some people just suck.

i had a sweet 6 plex lined up. was going to pay 24k cash. meant to rent units at 400/mo each.
would have paid for itself in 10 months. then bring in 2400/mo for life.

but the seller was such a pain. call or email 5 times in a day. demanding i hurry up with my inspection process. huffing and puffing cuz it took 3 weeks to pull the cash out of 401k.

i just dropped her ass. she threatened to sue. ha ha. told her to read her contract. keep the earnest money, i dont want to deal with you at all.

it later sold for 11k and now that guy is trying to get 99k. i'll get it for a good price sooner or later.

BunnyJinx
BunnyJinx

@Flameblow
Not the craziest, but I think the dumbest one I've personally run into was the person who got the place under contract, then cut out the water heater. Was one of those ultra high end on demand systems. Nice unit, but it was part of the house.

Thing is... he didn't shut the water off when he did that. 3/4 inch pipe. Basement was filled 5 feet deep with water, and he had city water to boot. Besides the building being condemned for mold, he racked up at least 10-15 thousand on his water bill, and shorted out a transformer knocking out power to a dozen buildings on his street, meaning several utility companies, not just water, were more than a little pissed off.

Yeah...Noped the fuck out of that one.

Almost snagged the property a year later at a tax auction, but they weren't letting anyone properly look at it, and I'll be fucked if I buy a property for the money it went for when there's a good chance the foundation has been washed out.

farquit
farquit

@BunnyJinx
can't imagine how this board is full of people wanting free advice on how to get rich. yet, when free help is offered, it's a ghost town.
helped a kid from indianapolis get into wholesaling. he's done over 100 deals since jan 2015 @ about $5k/pop. kid is doing quite well. has wife and kid and another on the way. tried to get him into investing, but he's kind of a 1-trick pony.

Garbage Can Lid
Garbage Can Lid

@farquit
Real estate is a long game, and the barriers to entry if you want to play the fast flipping game are substantial.

Both require discipline, and a lack of emotional investment.

JunkTop
JunkTop

@Stupidasole
Where do I look for a multi unit apartment complex?

I have about ~$130K in cash, what's the most expensive I could buy?

Stupidasole
Stupidasole

@JunkTop
Might be smarter to try buying a couple small single family homes to learn your immediate market a bit better. Generally they aren't as tightly regulated as complexes.

Supergrass
Supergrass

@Stupidasole
to learn your market a bit better
What do you mean by this? Could you list the benefits of single family homes as opposed to a multi unit complex?

kizzmybutt
kizzmybutt

@Supergrass
Learn your market.

What sells? 2 bedroom? 3 bedroom? What kind of kitchen? What square footage? What locations? School districts? Major places of employment?

benefits

Regulations/codes aren't as tight. Many states require you to have a permanent employee living on site for larger complexes. On top of that, inspectors will often overlook stupid shit on homes, but aren't as forgiving on complexes.

If it's a single unit, you can just write all the utilities in to be covered by the tenant. Most locations don't let you mix utilities, so YOU have to pay for them, which means extra math and risk if you fuck up the extra rent.

Managing serious pest infestations is a lot easier on a single house because you can just take it out off the market for a month or two and tent it.

If you get a stone cold crazy tenant, they won't be complaining about other tenants making noise because there aren't any, and if they are the ones making noise, the neighbors just call the cops on them. You don't have to get involved except to brush them off, or evict them if they are a serious nuisance.

Modest SFH tend to be slightly higher end. That attracts slightly better off tenants. Besides the money, the psychology is a bit different. Generally they aren't as batshit insane, and because the requirements are a bit higher, screening is more straightforward. Less section 8, and other welfare queens. Fewer druggies. Fewer 'disturbed youth' trashing shit. More small families, or single college grads looking for quiet.

Biggest thing is, it's a small nibble instead of a meaty bite. You're gonna fuck up a few times along the way. You aren't going to shoot yourself in the foot by starting off cautiously. You can get your foot in the door with houses in the 25-50k range, and figure shit out. If you fuck up, you're out a bit. Generally, you can still recover something with a flip, and do so quickly. Apartment complexes are not generally hot ticket items, meaning houses are more liquid.

Evilember
Evilember

@farquit
It's because the vast majority of anons here can't afford real estate, and the ones that can already own it.
Do you have a decent amount of knowledge re areas outside your own? I'd ask for your input in mine, were that the case.

LuckyDusty
LuckyDusty

@Evilember
Do you have a decent amount of knowledge re areas outside your own?

More than most of my colleagues, but that isn't exactly saying much. Most of them are completely tech illiterate, and couldn't change anything about how they perceive the world, even if they wanted to.

The same is true in most industries.

Evil_kitten
Evil_kitten

@Evilember
do you want to know how much cash i put down on my first acquisition?
$25.00 then $175/mo for ~57 months = $10k
it takes practically 0 down to get into real estate, if you know what you are doing/are willing to learn.
Do you have a decent amount of knowledge re areas outside your own? I'd ask for your input in mine, were that the case.
not to brag, but i am classified as a genius. i am in housing because that is where the money is. but i have many intellectual pursuits. and i'm always absorbing business related knowledge.
so what's your question?

TurtleCat
TurtleCat

@Evil_kitten
not to brag, but i am classified as a genius
Sorry, your time is up.

VisualMaster
VisualMaster

@Evil_kitten
not to brag, but i am classified as a genius
Not to mention he's humble too!

eGremlin
eGremlin

@VisualMaster
@TurtleCat
truth is truth. mock me if you will, idc.

Fuzzy_Logic
Fuzzy_Logic

Is there any money to be made by buying houses in Niggerville and renting it under section 8?

Booteefool
Booteefool

@Fuzzy_Logic
yes. you can charge full market rate and hud will pay. counterintuitively, it's best if the tenant has zero income, that way hud pays 100% (try including utilities if possible). that way you don't have to evict over nonpayment. 2nd best to rent to elderly/handicapped on social security/disability with no family.

legally you can't discriminate based on family status, but you can say you discriminate on bad breath, bad attitude, your intuition, etc...

Harmless_Venom
Harmless_Venom

@Fuzzy_Logic
Plenty, but it's high risk, and some regional HUD programs are downright cunts, making it even riskier.

You want to keep section 8 tenants at an arm's length, and be prepared to have a very good eviction attorney on hand for when they move their drug dealer boyfriend in. They can lose their benefits by subletting, but you need to approach them from a position of power, because they don't respect anything but fear.

askme
askme

@Booteefool
Interesting. I thought of this because I met a carpenter who only does work for some out-of-state lawyer that owns a bunch of apartment buildings. Half are section 8, half are regular apartments. When the tenants in section 8 housing slightly damage something (they do things like fuck up faucets all the time apparently), he goes in, replaces the entire thing, bills the government for a new one, keeps the slightly-damaged item, fixes it, then uses it in the other apartments. Seems like a good scam, but I don't have the money to go that big so was wondering about just SFHs.

I've got my eye on a couple that are just on the edge of Niggerville in an area of the city that is currently suffering from White Flight, so the prices in that area are really low right now.

@Harmless_Venom
I've thought of that. Had the idea to put some guys in a security guard outfit to give him a policeish look when serving eviction notices. I'm not sure how good of an idea that is.

Methshot
Methshot

@askme
replaces the entire thing, bills the government for a new one, keeps the slightly-damaged item, fixes it, then uses it in the other apartments.

I have literally never worked with a HUD program that was willing to cover anything besides rent outside of extremely specialized circumstances, like when their agents tried to extort me for bribes.

Sharpcharm
Sharpcharm

@askme
actual evictions are usually served by county sherrif's personnel, so no need. unless you are in a weird state.

SFH works fine for this. but the faucet story is so small $ it's barely worth it. your money comes from rent.

i'm seeing some good deals on large complexes. like one i saw today 27 units for 290k.

19 trailer - trailer park 180k

this is one of those times i wish i were liquid. i'd grab them both.

RavySnake
RavySnake

@Deadlyinx
PCM rent gross x 12 x 100 / purchase price = caprate
- expenses = ROI

Its an international basic formula

RumChicken
RumChicken

@Methshot
Serves me right for listening to the wild tales of some random fuckbag then. It would be some sort of fraud anyway though.

@Sharpcharm
I dunno about trailer parks, but I've been watching an RV park near me. Prices on their website are $1200 a month plus utilities and it's always almost full. Seemed to be a lot of old people. The highest lot number I saw was 90ish too. I tried talking to the manager about what the costs and stuff are, but I was very politely told to fuck off when it was clear I wasn't interested in renting. They provide a lot of amenities and it's in the better part of the city, but it looks to be doing pretty good. High startup cost though from what I can gather; the sewer system up to city codes can run into the millions alone.

CouchChiller
CouchChiller

@Methnerd
'hard money lender'
No Cash down 25%
50% apx cash down meaning your $140k turns into $300k liquid then 5-9% depending on other collateral.
Keep in mind most hard money lenders are lawyers or employ lawyers there terms if you screw up are very very predatory.

JunkTop
JunkTop

@farquit
I'm in real estate myself in Australia. Post here often. Sometimes with property threads its just good to lurk, because the codes and bylaws are all different everywhere even between states but you can glean really good ideas and approaches from seeing how foreign investors and sellers navigate their own restrictions etc.

Also there was an american timeshare salesmen who used to make threads here, he hasn't in ages though, his sales techniques threads were absolute gold, the guy was a fucking gun. Such threads are just great to lurk in

BunnyJinx
BunnyJinx

colleague of mine has most of a subdivision full of 4/2 dups.he is in his 60s. a xanax addict stripper tenant didn't have the $ for rent. she gave herself instead. he wound up with gonorrhea, and then his wife left him and took half his properties.

protip: NEVER accept 'favors' in lieu of rent.

maybe accept hard assets in a pinch. make sure they are worth more than the rent though.

StrangeWizard
StrangeWizard

@RumChicken
I'm not saying it's impossible, it's just that most HUD programs are a bitch to work with. Section 8 tenants have far more protections than normal tenants, and many HUD agents will deliberately try to trip you up and drag things out so the tenants can just squat forever.

I don't pretend to understand it. Section 8 has a huge wait list, so why wouldn't they want to get rid of the trash and get good people on it? It just baffles me that people can be that stupid. Some of the higher ups seem to want to keep the silver spoon running as long as possible, but that's government and unions for you.

Credit where credit is due, they do work extremely diligently to ensure that nothing gets done.

@CouchChiller
Keep in mind most hard money lenders are lawyers or employ lawyers there terms if you screw up are very very predatory.

Yeah, you really need to watch out for this. Lot of times they will try to slip in shit that isn't even legal, just so that they have more stuff to throw at you if it goes to court.

Stupidasole
Stupidasole

@JunkTop
right on. would like to lurk one.
i lack charisma and sales ability. so i do everything i can to make the stuff sell itself.
i've been looking for a good sales person, but no luck so far.

Raving_Cute
Raving_Cute

@StrangeWizard
@StrangeWizard
I was doing some work for some developers in Australia.
They did a mixed use estate that comprised of about 500 homes, a private international school, retail, public library, all on this green designed water catchment plan which utilised underground spring water and won a bunch of public awards for design etc.
The entire development was around the $200mill mark.
Anyway it was financed through a deal with a national packaging/recycling magnate. They fucked up in a small way financially and the magnate scooped up the entire nearly completed project within 1 month!

@Stupidasole
His sales threads were serious quality. Been 6-12 months since Ive seen one here.

Garbage Can Lid
Garbage Can Lid

@BunnyJinx
maybe accept hard assets in a pinch.

I wouldn't even do that, but if you insist on doing it, don't accept anything that could be provably stolen. Seen tenants trying to pay with stolen motorcycles. Tenant showed my property manager a garage full of bikes. I told my PM no, of course not, money only, and then sat on the info for a few months before tipping the cops off and evicting him when I could more easily get tenants.

Being a fence for hot goods is not a position you ever want to be in when it comes to tenant/landlord relationships. The sort of shithead who will steal will throw you under the buss if he even thinks it might help him, or will hurt you. That makes evictions complicated, and can cost you thousands on criminal defense fees.

Let them fence their shit to someone else and give you the clean cash.

lostmypassword
lostmypassword

good morning all. it's a brand new day. are you making money off your land yet?

Fried_Sushi
Fried_Sushi

@lostmypassword
How do you handle key control?

I gravitate towards slightly higher end locks, both because they don't break, and because I can control the keys. There's no sense going all out with 300 dollar abloy sets, despite how wonderful they are, since a fancy lock doesn't provide additional security if there's unsecured windows, or the door can be ripped open with a sledge, but I've found key control to be beneficial.

Tenants pay for keys at cost, or close to it.
-Long term that's (minor) profits because you can reuse the spare keys with future tenants who want them and charge twice
Tenants can't easily clone keys and steal from future tenants
-Also prevents copies from floating around due to tenants losing them if they can't provide a reason for the replacement.
Limiting clones lets you sniff out unauthorized sublets
Most high end locks can be rekeyed for little more than the price of putting in new shitty locks, so the cost is effectively a one time expense
You get to advertise higher security locks that are hard/impossible to pick.

I don't see any downsides if you weren't slumlording besides the one time cost of changing the locks on the property; which you should ALWAYS do anyways with a new property regardless, so the cost is just the difference between some good locks and shitty ones.

Relevant story....

happy_sad
happy_sad

Are you better off flipping homes or Renting?

w8t4u
w8t4u

Hi, since you are giving free advice i would like to thank you. So if you could give me any advice it would be nice,anways I'm 17 and i live in a country called Algeria desu i dont want to live here i want to leave asap because the country is just corrupted and i cant seem to fit in anways im starting college this year i study human science i used to study languages on high school but for some reason they moved me to human science on college i have no interest on finishing college well i have to go to college because i cant find a job even if i find a job its NOT worth it. idk what to do or where to start any advice is welcome and thank you

Snarelure
Snarelure

@Fried_Sushi
You have to love it when tenants try to extort you, or threaten physical violence.

Guy got served eviction notices a few days ago. Standard tenant that was in good standing suddenly not paying rent, and failed to notify me beforehand scenario. I give good tenants a break on the deadlines if they tell me beforehand, but if they don't, well it's their fault. Today he sent me a long, rambling, borderline incoherent email with all sorts of random excuses and shit, most of which only reinforces evidence for the eviction. Par for the course. Naturally it was forwarded to the eviction attorney.

The best part though, was the paragraph where he threatened to kill my property manager for hate crimes if he ever saw him again. Good eviction attorneys will write this up so neatly for the cops that it may as well have a bow on it. Naturally, he got dragged out in bracelets a bit ago by the city police.

On the bright side, I can guarantee that he's not going to miss his eviction hearing, so there's no room for funny "I wasn't told" bullshit. Plus he can't damage the property, since his key is locked up with his belongings, and there are no duplicates floating around. I'm betting that his family loses their minds over the phone when they realize they can't get in to take his stuff out tomorrow. Of course, my PM is free to ignore them if they can't prove they are authorized to enter his place. I don't even have to change the locks.

SniperWish
SniperWish

@happy_sad
Are you better off flipping homes or Renting?

Yes.

Not all homes are great rentals. Not all homes are great flips.

You can't really ask for raw percentages either, because someone like me, as a person who prefers buy and hold, is going to primarily investigate houses that meet the criteria for buy and hold. I do flipping, but only when I see solid money in doing so.

@w8t4u
This really has nothing to do with real estate.

If you want out, save money and migrate when you can. Best is to do things legitimately. If you are fluent, or even passable, with other languages, that's a plus.

Harmless_Venom
Harmless_Venom

@farquit
Send me an email at [email protected], I'd love to have a discussion with you outside of this Taiwanese bobble-head trading board.

RumChicken
RumChicken

Do you have any experience with things like parking lots, storage units, orchards, ect? Basically real estate where people aren't living on the property.

girlDog
girlDog

@RumChicken
I only dabble in commercial property. Have some small businesses that rent small spots from me. Couple very small stores. Mostly novelty/antique type stuff, and there's a few satellite locations for some other companies.

I have a decent lot of farmland and woods that I maintain a good path through. Rent it out to farmers, and rent out hunting rights on it for some big city yuppies. That path lets the lard balls ride their golf carts out to the hunting shack. Farmland isn't very profitable to rent on it's own, but it's very, very low maintenance, and most of that can be delegated to the farmer.

Commercial property operates on entirely different rules.

iluvmen
iluvmen

@5mileys
2% of price
monthly rent

just to be clear you're talking about buying a place for $180,000 and getting $3,600 a month in rent? meanwhile anyone who can afford $43,000 in rent each year could afford to buy a house? did you typo or is this a retarded role playing?

"Typically the rents landlords charge are between 0.8%-1.1%"
but nah OP gets people to pay double rent. it's so fucking easy.

Methnerd
Methnerd

@CouchChiller

Yeah, it's pretty small because it's Sydney's inner-inner west. Maintenance would be pretty low, especially considering the class of tenant it'd attract at $1000 a week.

GoogleCat
GoogleCat

@iluvmen
Seems high to me too.

I always used 1% of purchase price should be rent every month.

Gigastrength
Gigastrength

@iluvmen
Generally 2% applies to lower end units. In some markets, yes, you can easily get 3000 a month for a 150,000 dollar unit. Some of it has to do with the ratio of the land vs building values. Land itself, unlike houses, requires minimal, if any, maintenance. High value land with a shack on it is going to rent for lower % per month, and low value land with a nice house will rent for higher %. There's more to it than that, but there is a prevailing trend to that effect.

You can actually see that with
@Methnerd
anon's house in Sydney. Extremely high value land and low % rents. If you want the opposite, look at largely emti semi rural areas around smaller cities or larger towns in the midwest that are suburbanizing. I won't claim to be intimately familiar with the market there, but I've casually found places in the Oconomowoc area on MLS that would at least appear to be rentable for 2.2-2.5% because there's a substantial population uptick, and the land itself is dirt cheap per acre.

Also keep in mind that you don't want to pay the actual value of the house. The terminology gets a bit vague. Is a 200,000 dollar house that you bought for 100,000, and rent for 2200 a month renting at 2.2%, or 1.1%?

@GoogleCat
Generally I do as well. If a house isn't going to rent for at least 1%, it's not even worth looking at.

Right now my breakpoint for real investigations is around 1.3%, but lower stuff might be useful for flipping. Average place I try to buy is just above 1.6% right now, but that's skewed by the occasional 2+% property, and a 3% one that fell into my lap. Cutting out the handful of extremes puts me just a touch under 1.5% monthly rent.

If you convert those to appraisal values, it's almost exactly 1.3% monthly rent.

That's my data from the past 12.5 months. I'd be fine going a bit closer to 1%, but I don't have the extra capital, so there's no reason to bother.

Techpill
Techpill

@Methnerd
Might be worthwhile.

I don't know enough about Aussie laws. If it's in a prime location, you might be able to AirBnB it, but be wary of the regulations surrounding that. Might be classified as a hotel, and that's a lot of taxes.

CouchChiller
CouchChiller

@iluvmen
nope. get your head out of you butt.
i have a duplex for instance that rents for 325/375 (1/2 bdrm) in total i get 700/mo

i paid 20k for this
which is about 3.5%

i could have paid more and been happy with 2% and the tenants know they are paying just below market for a decent living space.

the key to investing in real estate is buying right.

"Typically the rents landlords charge are between 0.8%-1.1%"
typical = common = average = not pro

CodeBuns
CodeBuns

@RumChicken
storage units are great if done right.
get some cheap land that is zoned for it.
build your units. - but do NOT buy anything labelled "storage units". the markup is stupid. - buy the same materials and build the units.

orchards would fall into farmland thinking

parking lots can be great, or they can suck. depends on location more than anything.

Nude_Bikergirl
Nude_Bikergirl

@Fried_Sushi
i just use brink's replacement door knobs.
Walmart #: 553531391
for $14 per lease, i'm not worried.
when they move i can replace it, or if they give keays back i can move it to a different address and save my 14 bucks.
now higher end units, might get a classier knob, but it's just for show. the deadbolts can be replaced for <$20

cost of doing business.

Booteefool
Booteefool

@w8t4u
google foreign exchange students
get enrolled in one of the programs
raise any needed funds via kickstarter or something like that
while in new country, be the most awesome worker/student and make connections. let them know you want to stay and one is likely to help you.

Sir_Gallonhead
Sir_Gallonhead

@CodeBuns
The thing with commercial properties like hotels and parking lots, is they are frequently highly seasonal.

Hotels in particular make most of their money on a few key days, during specific weeks of the year. College graduations, Festivals, fairs, concerts, and that sort of thing.

@CouchChiller
typical = common = average = not pro

I wouldn't go that far.

Your operating expenses on shitbox units are proportionally a lot higher, so the rent has to be as well. I find that units that rent for 1500 a month are on par with 3 500 a month units in terms of profits. The 1500 a month unit is almost guaranteed to rent at a lower %. Still cashflows appropriately, and that's all that matters.

girlDog
girlDog

@Stupidasole
How can I buy a new home and rent out my existing home if my income is not enough to support both mortgages without the rental income? Basic facts:
$260k mortgage on current home
mortgage payment (PITI) is about $1600/mo
home recently appraised at $650k
i'm sure i can get at least $3k/month renting it out
want to buy a new house for around $650-700k
have around $200k in cash, don't want to use it all for down payment though
annual gross income of around $95k

I talked to a mortgage broker and he said I can't count rental income towards my income unless it has been established for one year. He said I can only borrow about $250k in addition to my current mortgage based on my salary. He recommended moving out, renting a place for a year while I establish rental income, then buy a new place. I don't really want to have to move twice/wait a year to buy. Is there another option? Should I talk to another broker?

iluvmen
iluvmen

@girlDog
you could sell to someone like me on what is known as a wrap-around-mortgage (better for me) or on a lease-to-purchase (better for you).

you could use the note/lease with me to offset your current payments, so on paper it looks like you have your normal income and not have the monthly costs.

LTP would be better for you just in case someone can't follow through. then you LTP to someone else.

in fact it would be better to set up an LLC as the LTP buyer in case that happens so if you do happen to be between tenants it doesn't look bad to the bank. you can show the LLC continues to pay down the old note.

----------------
or form an LLC and buy the new place in it, simpler that way. try to find a place that you can buy on contract rather than bank mortgage.

Deadlyinx
Deadlyinx

@Nude_Bikergirl
I use something a bit higher end. Big thing is I need my locks to be moderately bump proof.

Word got out about bump keys in the early 2000s, and there were a shitton of thefts targeting rental agencies. I didn't get hit as hard because my stuff is hidden behind trusts and multiple LLCs, but there were some well thought out hits on other companies. They realized that landlords use the same locks on their units, and that they could just pull up property records online, so they'd manufacture a perfect bump key and hit several hundred buildings in a day.

With a good enough bump key, you can open those locks just as fast as if you had the actual key. Just stick it in, thwack it with the butt of a screwdriver, and you're in. Unfortunately, once that cat's out of the bag, you can't go back to cheap options.

Sharpcharm
Sharpcharm

@girlDog
home recently appraised at $650k
i'm sure i can get at least $3k/month renting it out

That's less than .5%. Short of a hovel on premium land, this isn't worthwhile at all.

Just sell the old house.

DeathDog
DeathDog

@Sharpcharm
Its 5.5% per year, not including appreciation. And that is on the total value of the house, not my equity in the house. I don't think its that bad.

BinaryMan
BinaryMan

@Deadlyinx
fuck, man! are you in DC area?
maybe ATL?

but then again, a lock only keeps out the honest thief.
(oxymoron is used on purpose)

GoogleCat
GoogleCat

@girlDog
i'm also gonna tackle this another way.

stay where you are. spend 200k on 5-10 cheap rentals. or even a cheap multiunit. just saw 27 unit go for 190k and each unit brings 300/mo.

or if you aren't so savvy about real estate, you can partner with an actual real estate investor who can find the best deals and apply the dollars accordingly.

Illusionz
Illusionz

@DeathDog
5.5% per year

That's revenue. Not profit.

Maintenance, taxes, mortgage, etc, all rip into that. There is no way you wouldn't be better of selling, and buying several other rental units. Unless you are in an area where property values are skyrocketing, you'd probably be better off putting the money in a savings account than holding that house, and that's a fucking AWFUL idea to begin with.

You cannot turn a profit on rent that low if you are performing any sort of maintenance. Even farmland can rent for more than 5% per year.

The best you can do is mitigate losses, but that's still losing. Some times you just have to accept that the right choice is to simply let go.

@BinaryMan
New Englandish. I'd prefer not to specify.

Garbage Can Lid
Garbage Can Lid

@Illusionz
i miss NE. grew up in lexington, ma.
too many far leftists though.

Burnblaze
Burnblaze

@Illusionz
You cannot turn a profit on rent that low
Monthly mortgage payment (including taxes & insurance) is $1,600. Monthly gross rents would be at least $3,000, maybe closer to $3,500. With the tax deductions, how could I not turn a profit?

Unless you are in an area where property values are skyrocketing, you'd probably be better off putting the money in a savings account than holding that house, and that's a fucking AWFUL idea to begin with.
Because its a bubble? My house is in Seattle and the local economy is very strong, which has led to housing prices going through the roof.

Need_TLC
Need_TLC

@Burnblaze
Maintenance. Rent - PITI does not equate to profit. Look for a thread on bigger pockets called "where does the 50% rule come from?"

Seattle is going through a pricing boom. Maybe the bubble will pop soon, maybe it will be 20 years. I don't think it's purely a bubble because of the tech companies moving up there, but there definitely is a bubble, and a lot of it is driven by the influx of Chinese money. It might be worth holding onto it at lower % rent rates because of that. It might not. Maybe you don't get out fast enough, maybe you do. Either way, you'd still be better off selling it and buying several cheaper properties in the same general area. It's not just about whether something is profitable. It's also about whether you could be using that money more efficiently elsewhere.

Right now, I don't see how that property can cash flow positively. Long term sustainable cash flow is all that truly matters. I literally couldn't give less of a fuck if the market implodes. As long as I cash flow, that's just more shit for me to scoop up cheaply. My units cash flowed through the 2008 crisis. Margins were tight, but I exploded in 2010-2011 when everyone else was folding.

You can play the speculation game if you want, but my question is why would you? I buy tons of properties from people like you who gambled on the speculation game and lost. The rewards aren't large enough to offset the risks.

MPmaster
MPmaster

@Need_TLC
Thank for the advice. I appreciate your opinion. I know I'm biased towards keeping the place because it was my first place, but I also know economically it could be a better choice to sell it.

Firespawn
Firespawn

@StrangeWizard
i would suggest going for mid tier homes in mid sized midwest towns where you can scoop up properties for 20k-50k that would retail on a good day for 30k-80k. and rent them out at 400-1400/mo depending on area.
where are you seeing prices like that? in ~10k population towns and suburbs on the very outer edge of large metropolitan areas?

StonedTime
StonedTime

@MPmaster
Exactly. You are emotionally attached to the place. There's not really anything wrong with that, but emotional attachment cannot be allowed to influence financial decisions if you want them to consistently be good ones.

The key is to know exactly what the costs of a given choice are. Once you know the actual costs of something, you can make an informed decision about how much your personal attachment is worth. It doesn't have to be financially sensible. If you want something badly enough, and can afford it, you can get it. You cannot make do with one, or none of those things. You must have both the needs and the means.

BinaryMan
BinaryMan

@Firespawn
they are everywhere.
take indiana for example
indianapolis low end hoods
smaller cities like kokomo, fort wayne same thing
even smaller cities like elkhart, seymour, mt vernon

just gotta look for them. - not on the MLS 99% of the time

Spazyfool
Spazyfool

@Firespawn
I already mentioned seeing some shit around Oconomowoc. That's the outer edge of commute range of Milwaukee.

Look at the area around big cities. And look at smaller cities. There's tons of space in the midwest. As far west as Salt Lake, and as far east as Indianapolis. Lands cheap. Labor's cheap. That means if you have a nose for sniffing out population growth, you can get safe long term profits.

just gotta look for them. - not on the MLS 99% of the time

My software guy spends a lot of time tweaking bots to crawl listings in newspapers, craigslist, etc. Also serves a good way to find illegal subletting. You can find some real gems in newspaper listings. Estate sales and the like.

I like driving and take scenic routes a lot, and I stumble across some insane deals that way as well. Also worth having a rewards program for my property managers. If they find something before I do, or if I don't, I cut them a pretty solid bonus over a few years.

Evil_kitten
Evil_kitten

@Spazyfool
Oconomowoc
don't think i stopped there, but been through it.
is there anywhere i haven't been? alaska and hawaii. but i'll get there some day.
https://www.youtube.com/watch?v=9kGHmIZ4IUY

TalkBomber
TalkBomber

@Evil_kitten
I've been through there. Stopped for some supplies. Saw a bunch of buildings going up, so did some digging around, and some research online later, just to smell out the market. It's too far away for me to want to invest and manage things directly, but I was curious, and had most of a spare day.

They've got some enormous acreage available, since it's all perfectly flat farmland. There are some higher end strip malls going up in this place called pabst fields or something like that. I think PBR, that shitty beer, used to be brewed there or something. Well laid out with huge amounts of room to accommodate future growth. Downtown proper is upperclass brick buildings, and there's some lakefront stuff that is extremely gentrified, but there's enormous amounts of new complexes and suburbs in the surrounding areas. Lot of barely code popsicle stick construction going up, but there were tons of older buildings for sale at decent prices a couple years ago.

Overall it seemed like a good town that was undergoing a hearty expansion. By all accounts, people seemed to love it there.

Then I drove through Chicago and got pulled over 3 times in less than thirty minutes, but all 5 of the cops noped the fuck out when I pointed out the fact that I have several cameras.

Illusionz
Illusionz

@TalkBomber
when you got into real estate, did you have access to a nice chunk of capital?

me, i started with 25 dollars. and i'm slowly, but steadily growing. about half my times in analyzing deals, the other half is learning. listening to business magnates, podcasts (you mentioned one of my favs: bigger pockets), reading, checking laws, etc...

before i got into my first house, i was truck driving, born and raised broke, had bad credit in the 400s. now raised it to 560/590. can't wait to hit 620 so i can get some loans.

capitol is the one thing that holds me back from doing so much more. - every dime i get goes into the next project. so i'm still living like i'm broke, because i basically am lol.

but continue planning my working and working my plan. 35 years old. by the time i hit 40 i should be millionaire. on paper, at least.

Supergrass
Supergrass

hate watching golden opportunities pass for lack of cash up front. my first 3 acquisitions can go liquid in 4 years.

BinaryMan
BinaryMan

@Illusionz
I worked in software dev as this quasi HR/managerial position. Basically amounted to beekeeping. Keep the programmers happy by insulating them from management, and then making off with the honey. The company wound up being sold, and I was quietly given a package to get me go away without causing a scene. Ultimately what did me in there was that the suite types just couldn't understand how the department that spent 5 times what any other department did on miscellaneous expenses was so profitable. New head of accounting just about had a coronary when he found out we had a keg on hand. So they disposed of me, then tried to squeeze the department, and it collapsed within 18 months. Total waste.

Moped around for 6 months looking for work, but couldn't find anything. Neighbor died, and I bought her house on the cheap because I liked it. Not a good decision in retrospect, but I was depressed. Moved in, and couldn't sell my old one, so I tried renting. Gave me something to do, and I've never looked back.

Had under 50k liquid after buying the house outright, and no source of income besides the old house.

Spazyfool
Spazyfool

Went to the bank. Said I need a lease agreement and sales certificate before they loan me the money. Does that mean I need to rent out a house I don't own before they will give me it?

Burnblaze
Burnblaze

@Spazyfool
This is typical.

They don't want you to rent the house, they want you to provide them with a copy of the lease you will have the tenant agree to before they will consider a mortgage. This is a basic precautionary measure because they have no idea who the fuck you are, and they don't want to loan money to some dipshit putting up his drug dealing cousin who will turn the place into a meth lab before burning it to the ground.

They will also probably want some proof that the place can be profitable, so you should have at least a vague understanding of all the expense breakdowns.

For what it's worth, I'd consult with a mortgage broker outside of your bank. Ask them what your options are, and consider getting a second opinion just to make sure your broker isn't screwing you. Getting your feet wet takes some patience, but it's definitely worth it. Even a fraction of a percent can easily add up to multiple tens of thousands of dollars over the duration of a mortgage.

LuckyDusty
LuckyDusty

@CouchChiller
wuw lud. still going strong huh.

also typical does not mean not pro. it means what you can expect from a mixture of regular owners and pros. Ask yourself how they got that figure. It's obviously a national average. Now ask yourself how many people are charging 0%? 0.1%? 0.2%? 0.3%? etc. Not much room for outliers on the high end in that average.

but i'm sure the guy shitposting on Veeky Forums is the guy beating all the major players in the rental properties game.

Fuzzy_Logic
Fuzzy_Logic

@LuckyDusty
He specifically mentioned several low value buildings.

I know people who operate shitholes in places like Baton Rouge. Many of their units are upwards of 3% per month. That's because 80+% of the rent goes towards expenses that aren't mortgage related.

Low value + low income housing does not always follow the 50% rule.

Stupidasole
Stupidasole

@Stupidasole
Why are corner blocks worth more for the same square meter?

New_Cliche
New_Cliche

@Burnblaze
Thanks man. It's a 30k house I would section 8. Which is 1.1k a month in my area. So I just need a nice lease agreement. Thank you!

5mileys
5mileys

@Stupidasole
Parking, and you get extra distance between houses on multiple sides. If the cross street is some little dead end housing cul-de-sac with low traffic, it's just extra space around you, with minimal extra traffic.

Honestly, I wouldn't want to live on a corner. Intersections have more traffic collisions, and people walking through the yard. But I don't care about commuting an extra 5-10 minutes to live in a semi rural area, and most people do. That's just me though.

@New_Cliche
It's worth talking to a lawyer, and getting a good generic lease agreement. Most real estate attorneys have prefab leases they'll sell you for cheap.

Also, screen your tenants. If you don't you will regret it.

BunnyJinx
BunnyJinx

How feasible would it be for someone with shit credit to buy to duplex, rent out one side, and have the investment pay itself off?

Stark_Naked
Stark_Naked

@BunnyJinx
That's actually pretty common.

Because you live there, you can often get a FHA loan for it. Then after a few years you can move out and rent both sides.

iluvmen
iluvmen

@5mileys
The problem is that, because the mortgage is already payed off, the income I receive as a landlord will be taxed by the government.

Do you realize how silly that sounds if I put it differently? "I have been offered a job that pays a wage of $100,000. However, because I am now actually earning an income, the government is going to tax a percentage of that income. Should I take the job and pay a percentage of my wages to the government or should I continue earning nothing?"

The real question is, do you want to rent out the house for $1,000/week and deal with the potential headaches that tenants may cause?

Even if your property is leased out 40/52 weeks a year, you're looking at $40,000/year in gross income. I'm not sure about Australian tax laws but you should be able to deduct maintenance, depreciation, and property taxes from the gross income.

Methnerd
Methnerd

@5mileys
I don't think you know what a cap rate is.

Purchasing real estate at a 2% cap rate without some sort of special insight (major corporation is going create a lot of high-paying jobs near the house, etc.) is stupid. It's speculation in the greater-fool investment game.

I invest in apartment complexes through a private equity firm and the cap rates are at least 8%. We actually make money: approximately 10% cash-on-cash and total return is nearly 20% per annum.

I'm not saying that one cannot make money at a 2% cap rate but those who do run a high risk of losing money.

Burnblaze
Burnblaze

@5mileys
should I do this thing that will be almost no labor but make me a crap ton of passive income?

welcome to the big leagues

kizzmybutt
kizzmybutt

@Stupidasole

Probably late to the thread, but:

I'm a seller's agent in Poland. My partner and I have a ton of very expensive (by local standards -- from about 1m to 12m for townhouses in Krakow.

How to market internationally? On a shoestring budget? Best to collaborate with international real estate agents in other countries, I believe... but how to make the necessary connections?

Poker_Star
Poker_Star

@kizzmybutt
Google then call them during business hours. Use an online service that let's you use a number from their country so they answer

Gigastrength
Gigastrength

@kizzmybutt
I honestly have no idea how I'd approach this. I don't deal with mansions, and I don't touch overseas stuff at all. So take what I'm saying a healthy dose of salt.

The first thing that springs to mind is asking if this a sudden glut of units, or is this normal? If it's unusually high numbers of units, have you taken a step back and looked at the bigger market? Are the prices reasonable?

If they will sell, and it's just finding buyers, it might be worth targeting some people in east coast cities. NYC is the obvious go to, but DC, Providence, Boston and such all have some fabulously wealthy parts of town, and people who do travel for vacation. There are catalogues that specifically cater to that demographic. Find them, and see about making some tentative listings.

I presume you are relatively fluent in English? Might want to work on mannerisms and accents to sound professional.

Snarelure
Snarelure

Me and mom have been to a lot of real estate seminars. Basically they're all scams from people out of state selling locals on strategies that work great in Utah or Arizona but aren't allowed in Cali (where I'm from). But some of the stuff they say is good advice. Like Mastermind Groups. Who would you say are the most important people to have as assets? I've been turned off to real estate because of the scammers but it's always in the back of my mind.

Sir_Gallonhead
Sir_Gallonhead

@Gigastrength

I should have been more specific. These townhouses are (with the exception of one) investment properties. They're the Euro style traditional townhouses -- historically, the city dwellings of wealthy landowners whose primary estates were in the countryside. So too big for a residence (again, with the exception of that one), because they'd come with all their staff and servants.

So yeah, commercial investments. Mostly 15th, 16th, and 17th century. Best investors would be tourists, because although Krakow is already a tourist mecca, the increase in visitors per year hovers around 15-20%.

PurpleCharger
PurpleCharger

@Sir_Gallonhead
I can understand advertising them as places to stay for tourists, but why do you want foreign buyers?

Managing investment properties with an ocean between you isn't simple.

@Snarelure
Any sort of real estate how to talk is typically run by scammers trying to sell their own mentor services. If you want advice, go to biggerpockets

Most important people to have contacts with?

-Good mortgage broker or two to buy new properties
-Eviction attorneys. Get bad tenants out as fast as possible
-Good contractors to do general maintenance, and repairs.
-If you don't want to get personally involved, a good property manager.

Illusionz
Illusionz

@PurpleCharger
Any sort of real estate how to talk is typically run by scammers trying to sell their own mentor services. If you want advice, go to biggerpockets
you realize that biggerpockets is also filled with those fuckwads? a good chunk of the replies are people offering their services or referring someone's services.

Need_TLC
Need_TLC

@Illusionz
Yeah, but it's trivial to tune them out. The pages talking about the raw math are very useful if you are looking for general information.

Bigger pockets isn't perfect, but if you are looking for general information, it's a good place to start.

Lord_Tryzalot
Lord_Tryzalot

@Need_TLC
yeah, i forgot that they also have articles. i primarily use the forums since then you can search for answers/solutions relevant to your location.

MPmaster
MPmaster

@Lord_Tryzalot
To be completely honest. I barely even touch bigger pockets anymore. Pretty much the only thing I go there for is for random information about new materials to use. Once in a while you stumble across something useful.

Firespawn
Firespawn

@PurpleCharger
I actually do have an account on biggerpockets, it's great for podcasts and reading through forums. I found a local real estate group near me that I was about to join (cost money for their program) and read all the complaints people had with them. Glad I did my research and didn't sign up. I predict they'll be brought down by the feds sooner or later.

Harmless_Venom
Harmless_Venom

@Stupidasole

what does the bank look for when i want to buy a house?

how much money should i have saved up for a house? (a normal family house like 3 bed room and garage)

CouchChiller
CouchChiller

@Harmless_Venom
Investment property or personal?

For investment the bank generally wants some indication that the property can pay for itself if you can't. For personal, they want proof that you can pay for it.

DeathDog
DeathDog

@CouchChiller
personal. a house for me and my family. so i need to have a really good pay job then? my parents keep sweating me to save money for a house. out current rent is too damn expensive (about 1800$ a mouth for 2 bedroom apartment and parking space) with that much i could pay a mortgage

Raving_Cute
Raving_Cute

@DeathDog
Show consistent income over the last couple of years, and be able to provide proof. Have enough to make a down payment.

Do note that a mortgage isn't the only expense. Taxes, insurance, and ongoing repairs will cost money. Sometimes nearly as much as the mortgage itself.

Lunatick
Lunatick

Commercial RE advisor and investor here. I am not going to read this whole thread, but if you invest in residential, you are a dummy.

Booteefool
Booteefool

@Lunatick
And why do you think that?

Spamalot
Spamalot

@Booteefool
as an investor, your goal should be to minimize risk and maximize ROI. Residentail offers none of those.

kizzmybutt
kizzmybutt

@Spamalot
You're generalizing, and speaking in absolutes. Things vary by area.

Residential is higher risk, but in a lot of markets, the ROI is substantially higher. That's the case around me. Too much bad zoning in the buildup to 2008, so there's an abundance of commercial. It's overvalued, and tons of it's unused, if it's even developed in the first place. There's thousands of acres of divided industrial parks that are nicely zoned, have utilities, roads, city bus routes, etc, and nobody is moving in.

Why dip your fingers in that market when you can buy a house for 50k, throw 50k in repairs and renovations at it, and turn around and rent it as two units for 3k within 3 months?

Techpill
Techpill

@Lunatick
Commercial Agent here.
Unless your lease is backed by a publicly floated national or international retailer then your lease isn't worth shit.

Furthermore When Mum and dad retailers go broke you end up with their residential property anyway because it's their only viable collateral minus lawyers fees you dumb arse.

Skullbone
Skullbone

@kizzmybutt
Just the sheer amount of money you can take out in loans in commercial makes the ROI higher compared to residentual. I am not saying 'any' commercial property will have a higher ROI, but a well chosen property will always have less risk and more ROI. I have never put down more than 10% of my own capital in any of my properties and I actively check for refinancing opportunities so the DTV would be as a high as possible, which makes the ROI skyrocket in the long run since my 'initial' investment was very low.
@Techpill
you said nothing of value.

Flameblow
Flameblow

@5mileys
The primary benefit of an investment property in Aus is negative gearing (having the mortgage act as a tax deduction against income, which can vastly reduce the taxes you have to pay)

make 200k / yr
tax rate of $50 flat + 45%
versus
make 200k / yr, deduct 30k loan(s) annually (dunno how)
tax rate of $18 flat + 35% despite having an asset that is gaining value in the market

This is presuming that housing doesn't crash in the next 5 years. Perhaps you could take out loans to fix them up, or purchase little 50 sq m lunchboxes in sydney. Alternatively just rent them out as you were, (prepare to be a landlord) it seems like you're going fine, and to be frank negative gearing is a disgusting tax loophole that is partly liable for our current and incoming economic snafu.

RumChicken
RumChicken

@Skullbone
Even prime locations within spitting distance of highways sit empty for years. I know a guy who has several hundred acres in a good spot within a stone's throw from a major highway that has tons of seasonal traffic. He's growing fucking corn on it.

I don't really reach into CT so much, but even the Casino's in CT are suffering. Foxwoods is so far in debt that no investors will talk to them, and the Sun is still apparently dragging their heels on doing something with the abandoned state hospital. That hospital, or what is left of it, is riverfront property between two goddam casinos, and it has sat empty for decades. Your talking about good ROI when even fucking CASINOS can't generate interest on riverfront property.

Fried_Sushi
Fried_Sushi

@RumChicken
I don't understand why you bring your shitty outlier area into this generic conversation about CRE. It's kind of obvious to do demographic analysis before investing in properties. All my properties are areas with a positive net migration rate and because of that I have a 95% stabilized occupancy rate, which is really high.

LuckyDusty
LuckyDusty

@Fried_Sushi
You literally said that residential is terrible. You apparently don't understand that not all markets operate the way yours does.

Those 'outlier' examples really aren't more than a little atypical around this part of the country. Meanwhile you can frequently get 50% + returns on flips of residential properties by paying with a bit of legwork, and there's tons of good B&H properties, regardless of what the economy is doing.

GoogleCat
GoogleCat

@askme
Is this reddit?

VisualMaster
VisualMaster

Is it possible to sell/buy your house without a middleman? Just person-to-person like with a car.

Harmless_Venom
Harmless_Venom

@VisualMaster
You really want a closing attorney to make sure the paperwork is in order. There's stuff to file, and you need to agree to things like easements, HOA's, and other weird shit.

There's not much stopping you from doing it without, at least not in most locations. It's just not a smart choice. Closing on a sale with cash is not expensive.

CouchChiller
CouchChiller

I'm a student with no cash, but dad is rich and willing to give me 50k or so, and help with a loan.
Question is: Invest for passive income, or capital appreciation?

StrangeWizard
StrangeWizard

I once heard someone say 'don't buy apartments, they don’t have land value.'

Thoughts?

What protection do I have if the landowner wants to sell the land the apartment building is on?

Does this vary by country?
Britbong here.

Garbage Can Lid
Garbage Can Lid

@CouchChiller
Your question is kind of broad.

Mind elaborating, or narrowing it down a bit?

@StrangeWizard
What your acquaintance was probably referring to was that the land itself under an apartment isn't worth anything. Say you have 5 million dollar complex could be on a 100k lot. I guess his idea is that the land itself wont appreciate enough or something to that effect. The building doesn't really appreciate past keeping past with the cost to replace it, but the land can suddenly become desirable.

Not sure I agree with that. If it cash flows, it cash flows. Land speculation is it's own game.

askme
askme

@Garbage Can Lid
Thanks for that.
I never got a chance to ask him, and he didn't expand on it.
I guess he's more into land, and bungalows or single story, whatever, that can be flipped easier based on a land value increase, as a blank slate, rather than apartments which could be affected by neighbours, building maintenance or management issues, etc if that makes sense?

Yeah, I just want cash flow mainly.

Lord_Tryzalot
Lord_Tryzalot

@askme
rather than apartments which could be affected by neighbours, building maintenance or management issues, etc if that makes sense?

If someone adversely affects your property because they changed something, or because they are failing to maintain things, you sue them and/or notify code enforcement to have their building fined or outright condemned.

I've had that happen several times with drainage. Some dipshits set up their gutters/yard to drain onto one of my lots. Sent them a certified letter telling them they fucked up, and that if they fix it immediately I'd call it even, then filed suite and collected damages when they ignored me or told me to fuck off. Mold remediation is expensive. Since they didn't hire a civil engineer to handle their project the first time, they get to pay for it twice, pay for any problem/cost I can even tangentially link to their poor handling of it, and the city might fine them for doing work without permits, or violating codes.

This didn't happen to me, but a colleague of mine had a tenant that did audio work. The tenant had about 300,000 in equipment in the basement. The neighbor put in a french drain, and just dumped it onto the shared driveway while the tenant was away visiting family or something. A month or two later a major storm came through and the basement, which had been bone dry for a decade flooded. Tenant had renters insurance, which covered it the costs of his equipment, but it delayed several major projects he was working on. The tenants insurance, the tenant, my colleague the landlord, and his insurance, all sued the neighbor, and the city fined him for working without permits, causing erosion, contamination, and a bunch of other shit. If memory serves, the final costs wound up being just shy of 800k once everything was said and done.

Techpill
Techpill

@LuckyDusty
been busy doing some deals. hence why i've not been on for several days.

@Stupidasole
see:
@5mileys
+ more frontage. a lot of appraisals factor in frontage at a premium. it's like having the corner office, get more view, then there intangible feelings, people just pay more cuz they feel it is worth more.

@BunnyJinx
very we've done it. may have to talk to 200 sellers to find one willing to accept little/no more down and do seller financing. but when you find one, the other 199 rejections seem worth it. @Stark_Naked
also FHA is an option for SFRs, duplex, triplex, 4-plex.

@Methnerd
i do know. but what you are talking about is commercial real estate, where at bare minimum 8% is ok, prefer 10-12% to be a GOOD-GREAT deal.

@kizzmybutt
invest in a GOOD translator, teach them your methods, then have them call china.

@Snarelure
best method is to partner with an investor who is out there doing deals. second best, phil pustejovsky / ron legrand (the free stuff is quite dated, so you really gotta do your homework)

@RumChicken
Even prime locations within spitting distance of highways sit empty for years.
yeah, the keep waiting for that cash buyer who's willing to overpay. many will die without selling.

Methnerd
Methnerd

Seattle or Portland.

Carnalpleasure
Carnalpleasure

@StrangeWizard
disambiguation:
don't buy an apartment as a home
do buy multifamily apartment buildings to rent out

@Techpill
also me, forgot to tripfag

Sharpcharm
Sharpcharm

@Methnerd
Seattle or Portland.
u wot m8?

likme
likme

@Stupidasole
I'm taking the brokers exam soon how hard is it?

Techpill
Techpill

@likme
about 10% deeper than agent exam
all exams are easy if you learned the material
quite difficult if you trying to bullshit your way through it

AwesomeTucker
AwesomeTucker

@Techpill
I'm 19 turning 20, trying to do civil engineering at college but I don't have sufficient prerequisites so I have to do some prerequisite courses. I decided to do real estate training to become a real estate salesman while I'm at uni.

Is it waste of time?

Would I make good cash from being a salesman despite being in uni?
PLZ RESPOND H GAWD MY THREAD IS DYING

Lord_Tryzalot
Lord_Tryzalot

@AwesomeTucker
yes and no
learn real estate as much as possible
learn sales as much as possible
civil engineer may be cool, but learn what you are https://www.youtube.com/watch?v=BHq0gEDzzXM

are you E, S, B, or I?

Sharpcharm
Sharpcharm

@Sharpcharm
Which city do you think is gonna do better in the next few years

Ignoramus
Ignoramus

Who here likes to invest in Tonga?

takes2long
takes2long

@Sharpcharm
define: better
highest population growth percentage/raw numbers?
a market dipping so you can scoop up deals?
most improvement? - probably detroit
more sure bet?
high end staying high end? seattle vancouver area
industry growth?
most influx of college grads with non-liberal arts degrees?

Evilember
Evilember

@5mileys
you seriously inherited 3 properties and don't know what to do with them? You don't deserve them user.

But seriously, rent all of them out and negatively gear if needed. Your father has basically made you a millionaire, so just sit tight and let your properties do the work. Don't expect to live off the rental income though, you should still maintain your full time job. In the future I'd look at selling one of the properties and buying a nice place of your choice.

Don't change your current lifestyle at all. If you were saving up for a down payment on a home, continue to do that. Educate your self on property management, the real estate market and basic finance. This is the beginning of your journey to becoming a realtor and real estate magnate...if you so desire. There is money to be made, and you have a massive head start thanks to your father.

TurtleCat
TurtleCat

@5mileys
by the way, there is no way you could get $1000/week for a house worth 1.1 million. You'd be looking at around $600-$700/week

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