Outlaw2097

Just curious how many, if any, spend some time on the side either buying and selling or renting out real estate.

The good, the bad, the ugly...lets hear it.

freefall

I have a condo and a house I rent out in Florida.

The good: lots of people looking for a place to live due to people with good jobs loosing their house in foreclosure. Rents have gone up, insurance and tax down due to low home valuation. Multi year leases on both units= low vacancy rate...2weeks vacant in past 2 years. Mortgage rates are low so ROI is higher.

Bad: every year or 2 you have to be hands on, clean up , fix stuff, put the add in Craig's list and find a new Tenent. I hate it during that few days but after that I'm a happy camper.

Get a 3bed 2 bath in decent area that a single working mom with kids would live. The more you can put down the better. I don't like to leverage to much. Put 20 percent down and if your in the right "hood" you'll have a nice cash flow. Save it up and that takes care of repairs and helps fund the next down payment.

It basically a big game, you have to play to win.

HSLD

I used to have residential rentals, although in my advanced age I find that investing in Commercial REITS is way less of a hassle.

HIFLYR

\
Amen much better ROI and less hassle!

ryguy

I've been holding rentals for a few years now. I also own a franchise of a company that flips, wholesales, and holds. There is good, bad, and ugly in the business so the question has to be a bit more specific. Which side of the business are you leaning towards?

edit: Just realized that you are in DFW. I'll be there this week on Thursday and Friday if you want to meet up to discuss. I'm not sure of my schedule yet though so let me know.

globalexpress

I agree and own VNQ (Vanguard Real Estate Investment Trust Index), but it would probably help if you guys told him what a REIT is. Not many people know what they are or how they work.

Outlaw2097

REITs seem pretty straight forward. Mom is a stockbroker and made some decent money with them in the early 2000s. I was more interestd to see if anyone was or had been a little more hands on with either renting, renovating, flipping, wholesaleing, holding, etc...

Ill PM you ryguy Ive got to figure out my schedule as well.

SkyHigh

Real Estate has saved my bacon.

Skyhigh

HercDriver130

We know sky its all hearts and roses..... and I am sure there are no negatives in your mind.

Rather than throwing out a one line soundbite.... tell us the good and the bad of what you do. Oh...and the risk you have....

SkyHigh

I figured that you wold be sick of me by now but as you know I love to talk about myself.

In summary over the years as a bush pilot I was able to fly wealthy people to and from their expensive fishing and hunting pursuits. I used the hour or so to interview each one and discover how they got so rich.

There were all kinds of things people did to get rich but the most common was to invest in real estate. I spent several years reading and studying real estate investing and found a niche where I could get a foothold. I started to acquire single family homes through construction and purchase. Everywhere I had a flying job I would buy a house or two. Whenever I was laid off or underemployed I would build a house. At one time I had investments from Anchorage to Las Vegas.

After I got laid off from my 757 gig I started to build rental homes in my homes town. My concept was that if I were to build the homes myself I could do it for 65% of LTV and then get a refinance for 80%. I lived of the 15% and was able to keep the asset as a rental. Eventually I started buying parcels of land and subdivided it into lots. I also bought beat up homes cleaned them up and refinanced them once they had been overhauled. The key is to never sell or at least only sell to buy something that is newer or better.

Over time rents increase while the payment remains fixed, or in the current situation, is reduced through refinancing at historical low rates. Thankfully I sold most of my remote properties before the crash and have reconstituted those investments in my home town. The market goes up and down but I don't really care because I am holding for the long term. It is like dollar cost averaging when buying stocks. When housing prices are low you then buy more. When they are high you buy less. Don't worry about the intervening ups and downs just keep buying. Unless of course you live in a chronically depressed market.

I carry a lot of risk there is no doubt about it. However to live is to risk. The important thing is to avoid foolish emotional risks (as with aviation). Also I have already pulled most of my sweat equity out so my risk is nominal. It is important to note that everyone lives in different areas and hold a different skills set. You have to develop an approach that is custom made for you and to your real estate environment. It is a long time horizon endeavor however everyone needs a place to live and there are more of us everyday.

I can do little to effect the value of owned stock however when you own a house you can always paint, repair and improve. When a stock crashes you are left with a sheet of gold embossed garbage. Its value will never be restored. When a house looses its value you can still live in it and most likely if you hold on long enough will eventually restore its value.

Skyhigh