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03-14-2013, 02:21 PM
So Ive more or less decided that my apartment situation is ideal. $2000 a month is no drop in the bucket, but for a comparable place in Sobe (amazing view and amenities) is simply out of reach. Factor in no car and no state income tax and it seems even more reasonable.
With savings I want to get into RE. My basic question is would it be smarter to take out 20-30k in several mortgages in OH for a plethora of section 8 or buy one place in a desirable up and coming location that is cheap (eg Las Vegas, Atlanta, Tampa, or Austin) and take out a single mortgage, rent out to non section 8. I think the several mortgage route is smart from a finacial standpoint but I think with the single mortgage it might be a bigger risk/big time score if I get a place in these locations. This way I could also live in one of these places if I chose to (im completely location independent).
Some may say its stupid to pay 2k in rent, but I love this location and my place.
A secondary question is what markets are cheap but offer a cool life. Id obviously love to get a place in NYC but thats ridiculously out of reach. Vegas would be cool but also probably a nightmare to find one year leases for renters. Ive heard good things about Tampa and Atlanta, plus Atlanta supposively. very cheap. I will also add that "location independent" is solely within the US.
Any opinions from Rooshers in Re? Thanks
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03-14-2013, 02:26 PM
This is a complicated topic. BTW I don't think it's stupid to pay 2k in rent. Even though I have a house a lot of RE views in the mainstream are BS.
One market not a lot of people talk about is North Carolina, specifically in or near Durham. There are a ton of properties there that can be had cheaply. It's a nice area (close to FL), and with a lot of tech companies and universities, you will easily find renters there. I have a SFH there that I have been renting and the rent covers the mortgage, property tax, and most annual expenses.
I suggest start off slowly. You can buy one property than open up a HELOC using the house as secured collateral and then use that cash to buy a new property. Have to run the numbers to make sure it works out, but always be trying to use OPM (other people's money) as much as possible.
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03-14-2013, 02:35 PM
How much money are we talking about, because in multi-family you can lose it very quickly on a dog property.
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03-14-2013, 02:51 PM
Thanks Menace. Good advice.
Ill look into Durham. Its sounds like you can tell its gotta be at least kinda warm ha.
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03-14-2013, 04:17 PM
Quote: (03-14-2013 02:26 PM)Menace Wrote:
This is a complicated topic. BTW I don't think it's stupid to pay 2k in rent. Even though I have a house a lot of RE views in the mainstream are BS.
One market not a lot of people talk about is North Carolina, specifically in or near Durham. There are a ton of properties there that can be had cheaply. It's a nice area (close to FL), and with a lot of tech companies and universities, you will easily find renters there. I have a SFH there that I have been renting and the rent covers the mortgage, property tax, and most annual expenses.
I suggest start off slowly. You can buy one property than open up a HELOC using the house as secured collateral and then use that cash to buy a new property. Have to run the numbers to make sure it works out, but always be trying to use OPM (other people's money) as much as possible.
I cosign about NC. I was actually in the Raleigh area last weekend during the Duke-UNC game. Really nice place to live for low cost of living. RDU airport is one of the nicest I've seen. The region serves as the headquarters of great companies like SAS (in Cary) and other companies that rely on a highly skilled workforce. Great colleges in the area as well.
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03-14-2013, 05:47 PM
Have you run the math to just buy your current spot? Or is that not feasible in the next year?
Only asking since it sound alike you're sticking to Miami for good for a while, your returns could be substantial since its not like NYC/SF/LA where stuff is through the roof.
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03-14-2013, 06:50 PM
I see, I would run the numbers through on an interest expense basis though.
For example: if you are choosing to stay there for 5 plus years, it may make sense to calculate it out and maybe buy up a place in that 5handle to 6 handle range because all your rents are basically interest payments. You can factor in a hit of 20% pn the downside for your area and see the numbers are pretty good. Note the big key is you are staying around, so each person is different.
Now if you're planning to move around then I'll leave it up to these guys to give you RE ideas by location.
Also you should compare your return to reits at minimum, the spread on interest rates has created a reverse DCF on reits, I pitched a couple of them before and if you pull those numbers up on google you'll see they are doing real well still, add back in divy's. People don't understand the spread, so your comp is basically beating a REIT, if you can.
There are risks to reits as well but that's another idea for another thread.
TL;DR if you're sticking to Miami for a while, run the numbers on those 5 and 6 handle places. If you're not good luck and make sure you know the area you invest in very well.
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03-14-2013, 07:12 PM
Quote: (03-14-2013 02:21 PM)_DC_ Wrote:
A secondary question is what markets are cheap but offer a cool life. Id obviously love to get a place in NYC but thats ridiculously out of reach. Vegas would be cool but also probably a nightmare to find one year leases for renters. Ive heard good things about Tampa and Atlanta, plus Atlanta supposively. very cheap. I will also add that "location independent" is solely within the US.
I don't know why you want to be a landlord. If you are location independent then you should fine a cheap place like Vegas or Arizona, where retirees live. NYC is expensive because of jobs. But Vegas real estate is a mess now.
Given your flexibility, why not visit cities for a month or so to inform your decision?
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03-14-2013, 08:54 PM
G, im only referring to the Waverly which runs 400k-650k for a 2bd. The balconies are small though, and Miami is kinda skewed, not dead center. The really baller condos are south of fifth like the Continuum.
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03-15-2013, 01:33 AM
Shhh don't spread the word about the Raleigh-Durham Triangle so openly! The region is kicking ass in stability and growth and even with BofA bouncing a lot of jobs and cash out state the Region is still performing well off technology, Industry manufacturing ( I believe Toyota has a heavy presence in the area), and bloated research budgets from its top shelf schools. Canadian Banks like RBC saw growth in the Reigon a decade ago and swooped up a ton of small regionals to get a foothold in the area. Other Canadian Banks like TD and BMO are creeping into the area from north and south, all see big opportunities to slang loans to all the start-ups and homeowners down there. Amtrak is pushing expansion with Raleigh too and will be building a new Multi-modal station to handle project increases in ridership along the already busy routes passing through. The big boon with this project will be the eventual introduction of commuter local rail like what you see in Boston, Seattle, and Jersey, with plans to build lines from Greensboro into the Triangle. This is where insider knowledge makes people rich as studies are going on now on how doable it will be but people on the know will scoop up land/ properties along the project route corridors and watch the value increase ten-fold. Look into that of that area is on your radar, The Triangle is extremely undervalued and once the State props up rail and limits the spread out growth, values will shoot through the roof.
The Triangle gets over looked by places like Seattle and he DMV but stats wise it's up their in the top tier of growth and stability post 2008.
Fuck Vegas, it has no real work industry and will be nothing more than LAs playground, and Arizona - well - it has no water......
Both those spots are fuked long term, don't be mused by the cheapo prices neither areas have two legs to stand on, and once Canadians stop buying properties in Arizona it will fizzle out agian also.
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03-19-2013, 04:13 PM
Don't do real estate outside of 45 mins of your area UNLESS its triple-net commercial (pretty much zero maintenance).
This is a pretty good rule of thumb. ROI might look pretty good, but if you factor in time, driving/flying, headaches, etc (and god forbid you have a real estate management company which rapes you left and right for this and that) its actually pretty shitty.
Plenty of really smart people have gotten sunk by real estate. Its a time-consuming, major headache investment.
That being said if you set it up correctly and get good tenants, its a breeze.
WIA- For most of men, our time being masters of our own fate, kings in our own castles is short. Even those of us in the game will eventually succumb to ease of servitude rather than deal with the malaise of solitude
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03-20-2013, 01:33 AM
If you do all your work remotely, why not move to a cheaper place?
Work from a country with good internet, cute girls and cheap rent?
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03-20-2013, 02:46 AM
As many in Brazil, Canada, Russia and UK are buying up South Florida properties for both cash flow rents and appreciation a smart move might be to fix and instead of flipping - lease with option to buy with an annual price adjustment of inflation plus 1 point - and then sell the property and Lease with option to the many offshore intl investors flocking to Miami and South Beach.
The key attraction is the steady lease optionee's rental cash flow with a few years appreciation as a turn key package. Rinse and repeat. Oh yeah - holding the lease options for a couple years makes the income a capital gain 20% Federal Tax versus ordinary income at the new Obama 39.6% federal rate. Nearly 20% more in your pockets.
Can even option the LOs to offshore buyers for some more downpayment/walking around money and a locked in buyer after the cap gains holding period - they lock the price you lock the cap gains tax rate - a win win.
