Buy and hold rental investing

Sounds like a lot of work and risk for $900. Why are your margins so thin?

It's actually almost no work, they are all managed professionally. I would guess I spend 5 hours per month on them.

Additionally, they were purchased from wholesalers below market because of specific repairs that were needed, mostly smoke. They were purchased with very little down, since they appraised higher than the purchase price.

Approximately $10-15k has been put into each unit to bring actual value up to and even exceeding appraised, so equity has gone from maybe $20k in 2013 to $180k today between improvements and market fluctuation. My total invested dollars are under $80k, so the margin is there, just not in the cash flow.

If I dropped the management I would make another maybe $130 per door, but I don't live in the state and have no desire to move to do day to day stuff.

>>1419240

This. pls post a balance sheet

>>1419228
where the fuck do you live where 5 unit buildings are less than 500,000? That has to be the middle of bumfuck nowhere or in a white trash area.

All SFH? What state of you don't mind me asking

I'm interested in doing this in the future as well. How did you get started?

>>1419777

I assume this low net income is due to mortgage payments on the rental units

>>1419228
I have a ton of questions any. Will post when I get home if thread is still up. I want to do rentals and am close to my goal

>>1419228
I don't know a lot about the real estate market or rentals in general. Do you have any recommendations on how to learn? Any books you would recommend?

How much knowledge of the market did you have before getting into this? You said you had $180k in equity, how much of that is tied up in debt?

>>1419779
I have two duplexes and a SFH. They are valued at a combined $800k or so, of which I owe approx. $600k.

>>1419803
See above, all in Anchorage, Alaska

>>1419834
Got started by buying a duplex and living in one of the units using an FHA loan. I asked for referrals to wholesalers in Alaska, and found one with a fixer upper with smoke damage that had been on the market for almost a year. Owner was willing to go 15% below market to dump the payments, so I bought it and fixed it up. Went from being worth maybe $700 per unit to $1150 per unit after about $30k in rehab.

>>1419886
Correct. Cash flow, as a metric, is solely the money I put in the bank for myself. With mortgage payments, I get another $700 or so per month in equity.

>>1419960
Honestly I did not read a whole lot of books when I got started, it just stuck out to me as an opportunity. Now though, I highly recommend you go to BiggerPockets and listen to their podcasts, they are amazing. Their blog content is also top notch, and I own three of the books they have published, all of which are good but not amazing unless you are a real beginner (in which case, they are 5 star material)

>>1419886
Maybe to put it in better perspective than cash flow gives, my CAP rate is approx. 8% and cash on cash return is over 45% (since I did not have huge down payments on any of them).

I just used cash flow because it's easy, when in reality the numbers a real estate investor cares about are a bit more complicated.

>>1419960
Sorry, only answered half your question in my last post

I had very little knowledge of the until I realized I could get an FHA loan. I quickly got up to speed locally and started hammering out CAP rate projections and estimating capital outlay for different types of fix up work. It became apparent that working through a traditional real estate agent was not going to give high enough returns, so I asked around for one that worked with local wholesalers and eventually found the right place at the right price with the right problems that I knew I could fix for the right amount. A lot of research went into forecasting the costs and returns.

As far as equity, I am not sure what you mean... Equity is always tied to the loan debt, until the load is paid off. If you mean do I have a HELOC or anything against any of it, no I do not. I will probably look at that option once I am closer to 40% paid down, right now the credit lines would only provide maybe $50k, not enough for the next building I want to get (looking to move into apartments)