Quote: (07-25-2016 02:21 AM)The Black Knight Wrote:
My end goal is $5000/month USD POST-tax. Or 60k/year POST-Tax.
$5000/month generally means:
1) You can live virtually anywhere in the world with good logistics; including first world locations (albeit more modestly). You also have enough to return home if needed or desired.
2) You have extra money for travel expenses/eating out/luxury/whatever every month.
3) You build savings (you need this if dealing with real estate).
4) You have leftover money for investments.
5) If you want a family, you have extra disposable income to work with.
I hope you got some liquid savings set aside OP. I can't imagine getting a 30k property with 800-900 rents in a shit part of town not being without some potential major headaches in the future. I admire your hustle though and just going for the dream! I feel the energy!
That said: I cannot emphasis enough the borderline nightmare, in both headache and expense, it is to deal with a shitty tenant in a tenant friendly jurisdiction. I probably won't ever buy a property again in a non-landlord friendly (usually libtard) state on general fuckin principle. Most libtard states give WAY too many rights and protections to shitty people; rights and protections you ultimately have to pay for via higher taxes and loss income (repairs, lengthy eviction processes, absurd leasing rules, etc). A bad and poor (meaning no money to extract via lawsuit) tenant can wipe out a year's worth of a property's net income easily. Way more easily than you can imagine.
In a bad neighborhood, the odds of you getting a bad tenant increase a 100-fold. Make sure you screen HARD and know how to LEGALLY discriminate against potential tenants. Failure to do so can be very costly in the end.
Second Black Knight's sentiments in both congratulations to the OP and also the importance of being on top of the landlord game.
The cap rates on your place are astronomical so I'm sure you're going to be dealing with a lot of scummy people. This might seem counter-intuitive, but in my experience dealing with poor areas, Section 8 tenants were actually a much better experience: they're sort of vetted already by the HUD in your area and they won't be able to qualify if they're a registered sex offender, got caught making meth, certain violent crimes, etc.
The subsidized housing vouchers also work to keep them somewhat in check because they realize if they really fuck up, they're going to get kicked out of the program... having said that, ghetto people usually do ghetto shit, so you still have to steel yourself for the inevitable shit storm that will come from time to time. Personally, I couldn't handle it after a few years, but then again I wasn't making 30%+ cap rates.
Having a buddy actually living in one of the units is probably not ideal from a profit perspective, but it might pay dividends by letting tenants know that you're keeping a close watch on them.