Bought a fixer upper for $77k, spent $35k on it, rented out an apartment from it and the mortgage pays for itself...

He thinks being a landlord is a full-time job.

I'm curious about this. I have been employed full time for about 3 years now and am close to getting a new job paying $70-75k per year (a lot of attention from recruiters and 2 leads with final interviews coming up). I should have at least $50k saved up in about 2 years time assuming things continue on as they have been.

How do you go about finding an undervalued house that could be a good investment, both in terms of renting a room/few rooms out as well as resale value?

when searching look specifically for multi-family units in repo, then pick one

No, you did not do good.

You could have invested that 110$k you spent in index funds instead.

After a year you would have minimum 5% of that 110k$ inflation adjusted.

After another year you would have 5% of that.

Each year you would have more and more money.

With your real estate each year you will have to sink in more money into maintenance and be tied to one spot without option to quickly liquidate it.

You did mediocre

And who is dumb enough to lend OP $110k to trade on stocks at 4% without the threat of margin calls?

That's cute. You've never experienced anything other than the current bull market.

He lives in the house so it's a win win.

What the fucking fuck are you talking about? Tell me your ways user. 2 mortgages?

Just pays for itself or do you have extra cash?

>what happends when ac/appliance/etc goes out

If you don't have a positive cash flow to cover, then you didn't do good.

You're fucking stupid. Home ownership rates in America are at an all time low. Meanwhile, home prices and rental rates are at an all time high.

2 apartments, one covers one mortgage and the other may be supplement the second mortgage.. or even cover it depending on the term / cost of the house(s)

>Top of another real estate bubble
>Good buy OP!

how did you go about vetting your tenants?
i am in the UK (scotland) and tenant rights are a bit of a downside to the game. not easy to evict and you can lose several months of rent if you are evicting because of non-payment.

Where does it say he took a loan? I understood that he had that money saved up.

>That's cute. You've never experienced anything other than the current bull market.

Where is your argument? ON AVERAGE during the following 20 years market is expected to yield about 5% INFLATION ADJUSTED. Learn about averages and statistics please.

Ok, if he did not have a place to live before this then I don't see anything wrong.

Ok, maybe. I don't know but let us say you have a 100k$ property in USA, can you really rent it out for 1k$ a month? I also don't see how my points were refuted. I am from Latvia though and here property and taxes are high and people don't want to pay too much for rent either, so that would not be as effective as investing in index funds.

Way to miss the point autist. He said he's going to rent it out. So that means he's getting a premium on millennials who refuse to buy property.

Also:
>bubble
kys.

Amazing they let high schoolers like you post on here.

Most areas in the US outside of urban areas, the monthly rental rate is significantly higher than the unit's mortgage would be.

That's by design, because nobody wants to offer units at a loss... It's pretty simple.

what state/city

OP here, this was in Puerto Rico

here's your you

I didn't, I just let in the first guy who brought the money, and so far it's been good. All payments on time.

It's on a mortgage, I don't have $100k saved

>Where does it say he took a loan? I understood that he had that money saved up

>rented out an apartment from it and the mortgage pays for itself
>and the mortgage pays for itself
>mortgage pays for itself
>mortgage pays
>mortgage

Is Puerto Rico nice or what?
I heard they just declared bankruptcy.

I have no problem with Mexicans as a group of people all though my Spanish ain't that best.

How much would it cost to take a vacation and some real estate 'lab'.

Go to listings ,and open houses of homes/apartments

Good on OP, though he should have vetted his tenant better.

I am looking into buying a duplex and renting out half. My brother might move in. Between splitting 1 side with my brother and renting out the other I would be getting paid to live in the duplex.

There are sub 50k duplexes that need some work where I live. I got cousins who flip houses and look for foreclosures and "courthouse steps" deals all the time. I am fairly /diy/ with relatives that do everything from roofing, HVAC, plumbing, electrical, ect who love to help out.

Going to the bank tomorrow to see what I can get approved for.

The general rule of thumb is get 1% of the purchase price in rent each month.

You did well. Since you mentioned living in Puerto Rico you can check into renting via Airbnb since it's touristy, rather than being a landlord. Just a suggestion. Either way, congrats.

You guys just memeing or does this really work? I thought the buy a fixeruper and renting it out to pay the mortgage was just some kind of a meme to sell books or something and that rent wouldnt cover all the costs so you'd end up still negative somehow.

nah where I bought is a residential area, no tourism for 10 miles, its rented out for the time being

this is retarded

i did the same thing as op, but spent less money. bought duplex, rent one half, live in other half with roommate.

25k cash invested to fix up/pay mortgage during renovation

5000 tax writeoff after first year, which translated to 1500 refund
live there for free, all expenses paid (roughly 6000 yearly savings)

this year income will be much higher, since i only had both sides rented for the last few months.

after first year, cash on cash roi is about 5%.

if i include the fact that it covers my living expenses, the roi is closer to 30%.

it did take some work on my part, but thats fine.

deals like this are becoming harder to find though.

>dropped 50k into ripple
>300% jump
>made 100k in 4 days
>spent less than OP, and did it in my underwear
>mfw

where do you live?

50k for a fix up duplex is a fantastic deal i would imagine. unless rent is like 250 for a 2br or something

So you did abide by the 1 percent rule?

How much was the total cost of property and how much do you get per month from one renter?

Too bad you can't really do this where I live (Bay Area, CA)

it totally depends on how the numbers crunch.

its much easier to do with a multifamily property. you really have to but at rock bottom for a single family home to cashflow.

keep in mind that multifamily properties, especially large ones, exist to be investments. say you buy a quad-plex. you only pay a price that nets you a decent return. nobody is going to buy a quad plex that will lose money, so they have to be sold at a price such that they are an investment with a return.

although speculation can fuck with the market. people with a lot of capital can buy properties which either just break even (basically a loss for a small-time investor) or even have negative cashflow. they do this in areas in which large appreciation is anticipated, so the short term roi is nothing, but there is long term potential.

tldr, it depends entirely on the numbers. expenses vs income.

there are different rules of thumb.. i went by the 50% rule, which says that your fixed expenses (mortgage, utilities the owner pays, property taxes, insurace etc) should not exceed 50% of the income.

paid 170k. fixed expenses come to 1100/month, total rent is 1850 (would be 2350 but i live in one of the rooms)

and for the index fund guy whondoesnt understand mortgages, i paid 3.5% down (which i financed) and put 15k and some of my own labor into renovation.

A major city in the rust belt.

Rent for a 1br goes for 600-1000. 2br start at 700. 700 for a 2br gets you a dump with no insulation.

nice

rust belt seems promising.
went to a wedding in pittsburgh not long ago, and there are good deals everywhere.

IMO the city is doing well along with the core suburbs. Some of the outlying suburbs are doing well now, but I doubt they will continue to grow long term. Most of the river towns are RIP. Us kids want to ride our bikes to work and take self driving ubers home over risking a DUI.

The population keeps dropping for the region which I blame on the die off of older residents. Houses last updated in 1975 will exist for year to come. Pitt, CMU, and UPMC attract top level talent to their R&D programs which lead to spin off companies hoping to siphon talent from the local schools.

ahh, i'd love to do something like that but housing is expensive as fuck in the UK

dirt cheap in many run down areas where buy to let is nevertheless stillf easible.'''

So you are fine giving away money to jews?

And you say you can rent out your property for 1% of what you paid for it?

And that 1% covers the monthly mortgage payment?

Really?

>paid 170k. fixed expenses come to 1100/month, total rent is 1850 (would be 2350 but i live in one of the rooms)

Right, I don't understand this. You would never get an amazing layout like this in Latvia.

For a 300'000 EUR apartment people will pay you 1000 EUR in monthly rent -taxes, -other expenses, -amortisation.

If you really think about it, you are making a 100% roi but it takes up to 10 years however...
>mortgage
You better be paying for it out of pocket and using the rent to just speed up that process.
You are going to end up paying over $200k by the end of the mortgage otherwise.

>tfw bought a 4 bedroom house 30 minutes from Brisbane 2 years ago for $320K
>government gives first home buyers $20K
>literally only had to save $12K for the deposit
>rent out for $480 a week
>Principle and interest getting paid off without me having to do jack shit
>Suburb is growing significantly, valuation of property is now $500K

Still live at home with my parents while some pleb is paying off my house which I'll be able to sell in a few years and literally buy another cheaper house with the equity from market growth.

Australian real estate is literally free money

Also, similar story.

My dumb as fuck friend from high school who dropped out to become a builder when he was 15 literally bought his first investment house at 18, fixed it up himself and made enough to lay down mortgages on 2 more.

He's now 22 and has 4 homes with positive rental yields that pay themselves, with a total estimated total value of 1.2 Million AUD. He's waiting a little longer for the housing market to finally settle and then selling and he won't have to work another day.

not in every case, but in some cases yes.

property is not always a good investment. but like anything else, buying while something is undervalued is a way to make money.

keep in mind i found this deal during the final stretch of the american housing market downturn.

and idgad who i "pay," its about cashflow. every month, the property brings in more than it costs.

seeits not about that.
its about passive income. having something that generates cash with minimal input from you.

yes the mortgage will cost you a fuckton over its full amoritization, but this doesnt matter. because to you it is overall a source of income/tax breaks.

well, depends what he paid for the properties. he wont own the houses outright in a few years, so a huge chunk of the sale price will go straight back to the bank.

did the australian housing market take a dive along with the us market?

nice dude, good job.
what is driving the appreciation? flight to suburbs? asian immigrants? i dont know anything about the aus market.

>And that 1% covers the monthly mortgage payment?

Lets make the math easy with a 100k property. 1% monthly rent is $1000/month. 100k for 30 years at 5.25%(stupid high to make a point) is $552. Throw in taxes and insurance and you are looking at close to $800 PITI. You cash flow ~$200/month while building ~$115/month in equity.

IIRC most landlords look for closer to 2%. 1% on a [email protected]% duplex with you living in the other half($526/month.. damn good deal) has your "rent" at ~$225/month. Personally I would pay the PITI out my own pocket, save 1/3rd the rent and put the other 2/3rds towards the mortgage.

>For a 300'000 EUR apartment people will pay you 1000 EUR in monthly rent -taxes, -other expenses, -amortisation.

Only full NEETs escape property tax. Any smart landlord will make the tenant pay the taxes and insurance.

You should look into it mate, everyone is moving to the suburbs because major cities housing is just ridiculous right now, so people buy a much nicer house, near the beach, in a more peaceful location for half the price and just commute to work.

Also asians and indians are buying fucking everywhere.

>paying $140k for the opportunity to make $15k a year
This is the definition of retarded.
You will get shit on if the market crashes and you cant find tenants because they are picking up properties for cheap.
You are actively minimizing profits and maximizing your costs.
This is definitely not doing good.

You can say the same for any kind of investment.

>$300,000 mortgage
> $2k/month rent
>sell in a few years
Nigga you mean in 15 years.
In 5 years you will own 10% of your house with default payments.
Not only that but you have to pray you never have a lapse because you will be paying $2k a month when you havent saved a dime from rent.

You mean shitty investments.
At best you are making $100k over 15 years by having it constantly rented out and at worst you are paying $200k for a $80k property.
The quicker you pay it off the closer to $80k you pay and then the more profit you will get from your investment.
I would never agree to an investment that made me pay 2x its rate in just fees.

Idk where you are but that stuff doesn't even exist here in San Diego. Multifamily is so fucking sky high here. I have a 4-plex in escrow in Escondido at a 4-cap. A fucking 4-cap. Theres just to many rich fucks looking for somewhere to place their money

Drunk here. Sober excel calcs on 100k.

PITI: 800
Phone +internet: 100
Car: 200(owned outright, low vehicle lifestyle, saving for a new shitbox)
Food:150(being a cook has its perks)
Utilities:150(1000sqft @ $0.15/sqft-month)
Total 1400

I work with a ton of renters and $700 is low end market for half of a duplex. I can cover all the expenses with my income. I should cash flow $400/month after maintenance and savings for deferred maintenance. It will allow me finance another duplex in 3-4 years.

>You will get shit on if the market crashes and you cant find tenants because they are picking up properties for cheap.

>tenants
>becoming landlords

LOL. Tenants are tenants because they don't Veeky Forums and /diy/

>tenants are tenants because they are retarded
>buying into the housing market while the price is high instead of waiting for the crash and cashing in
It sounds more like you dont Veeky Forums since they constantly spout this meme every day.

who the fuck said pay 140k??

unless you have huge capital reserves, you will almost always be taking a loan.

you have no idea how cashflow investments work. which is sad, because its very simple.

monthly profit = income - expenses

idgaf if you understand. i will have recouped my input cash after about 2 yrs.

100k over 15 years is great if you put in 10k

its shitty if you put in 95k.

dont know what you are doing on this board. dont understand why people shit on entire asset classes.

fucking lost

There are studio-sized houses in the Bay Area that sell for ~$10000.

what is risk