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Started By
Message
Another reason why real estate > stock market
Posted on 1/5/14 at 2:38 pm
Posted on 1/5/14 at 2:38 pm
Ok..now that I baited you in, here me out. I was looking at a prospective rental property two weeks ago when I saw a decent house two doors down that was all grown up and looked vacant. I asked a lady across the street what the deal was and she said the owner died about 3 years ago and it has just been sitting there.
I pull up the tax records and find the current owner lives a few states over(guy that died son). I mail them a letter telling them I would like to buy it for a rental and heard back from him today.
We haven't closed on it yet so it could fall through, but I offered him $20,000 cash and he agreed(should have said 15k...frick). The home is worth about $40,000 - $45,000 as is. I'll put about $5,000 in it to get it rent ready and rent it for $700 a month.
Point I am trying to make is, anyone can make easy money in real estate. My gains in the stock market are MUCH slower than that.
I pull up the tax records and find the current owner lives a few states over(guy that died son). I mail them a letter telling them I would like to buy it for a rental and heard back from him today.
We haven't closed on it yet so it could fall through, but I offered him $20,000 cash and he agreed(should have said 15k...frick). The home is worth about $40,000 - $45,000 as is. I'll put about $5,000 in it to get it rent ready and rent it for $700 a month.
Point I am trying to make is, anyone can make easy money in real estate. My gains in the stock market are MUCH slower than that.
This post was edited on 1/5/14 at 2:40 pm
9
Posted on 1/5/14 at 2:42 pm to I Love Bama
quote:
I offered him $20,000 cash and he agreed
quote:
rent it for $700 a month.
quote:
anyone can make easy money in real estate.
Being a slumlord isn't easy.
Posted on 1/5/14 at 2:43 pm to foshizzle
middle class neighborhood. All white.
Posted on 1/5/14 at 2:43 pm to I Love Bama
I would not want to have to deal with the type of tenant who rents a house that was recently sold for only $20,000 and can only afford to pay $700/month for a HOUSE.
F that crap.
F that crap.
Posted on 1/5/14 at 2:45 pm to I Love Bama
quote:
middle class neighborhood.
quote:
$20,000
Does not compute.
quote:Well, okay......maybe it does.
Alabama
Posted on 1/5/14 at 2:47 pm to LSURussian
I chuckled.
This post was edited on 1/5/14 at 2:48 pm
Posted on 1/5/14 at 2:48 pm to I Love Bama
My stock isn't gonna call me in the middle of the night when the toilet is overflowing
Posted on 1/5/14 at 2:48 pm to foshizzle
quote:
Being a slumlord isn't easy.
I can't imagine it is. I do work for a few. One of them manages his own properties as his full time work. He makes damn good money, but he has learned how to handle this stuff for the past 20-30 years.
I know the OP has been in the business for at least a few years now. I don't think its for everyone.
Also, if the OP had owned 20k in Netflix on 1-2-13 it would be worth close to $80k right now.
This post was edited on 4/14/14 at 10:40 pm
Posted on 1/5/14 at 2:51 pm to LSURussian
quote:
I would not want to have to deal with the type of tenant who rents a house that was recently sold for only $20,000 and can only afford to pay $700/month for a HOUSE.
I guess this mindset is why I don't have more competition. I'm up to quite a few rentals now and none of my tenants make less than $40,000 a year. Only had 4 calls of problems since 2008.
Just bringing up discussion that there are other investing and retirement avenues than the stock market. You bring knowledge about stocks, I'm just trying to do the same with RE.
Posted on 1/5/14 at 2:53 pm to I Love Bama
quote:And you believe that is 'middle class'???
none of my tenants make less than $40,000 a year.
Posted on 1/5/14 at 2:53 pm to LSURussian
In north Alabama, without question.
I equate slumlording with section 8 rentals. Non existent in this neighborhood.
I don't mind sharing the neighborhood.
Brookline Drive
Huntsville, AL
I equate slumlording with section 8 rentals. Non existent in this neighborhood.
I don't mind sharing the neighborhood.
Brookline Drive
Huntsville, AL
This post was edited on 1/5/14 at 2:57 pm
Posted on 1/5/14 at 2:57 pm to I Love Bama
quote:Ho-lee crap!!
In north Alabama, without question.
It's worse than I thought!
Posted on 1/5/14 at 3:02 pm to LSURussian
Estimated median household income in 2011: $45,018 (it was $41,074 in 2000)
Huntsville: $45,018
Alabama: $41,415
Estimated median household income in 2011: $36,894 (it was $30,368 in 2000)
Baton Rouge: $36,894
Louisiana: $41,734
Please bring something to the conversation other than flaming and ignorance.
Huntsville: $45,018
Alabama: $41,415
Estimated median household income in 2011: $36,894 (it was $30,368 in 2000)
Baton Rouge: $36,894
Louisiana: $41,734
Please bring something to the conversation other than flaming and ignorance.
Posted on 1/5/14 at 3:09 pm to I Love Bama
quote:
Please bring something to the conversation other than flaming and ignorance.
quote:Link, please?
Estimated median household income in 2011: $45,018 (it was $41,074 in 2000)
Huntsville: $45,018
Alabama: $41,415
Estimated median household income in 2011: $36,894 (it was $30,368 in 2000)
Baton Rouge: $36,894
Louisiana: $41,734
Posted on 1/5/14 at 3:11 pm to LSURussian
First google hit.
LINK
If you have something more up to date, post it. I'm just making a point that $40,000 isn't poor. I even posted the neighborhood. I'd have no problem living on that street. My house isn't much nicer than those.
LINK
If you have something more up to date, post it. I'm just making a point that $40,000 isn't poor. I even posted the neighborhood. I'd have no problem living on that street. My house isn't much nicer than those.
Posted on 1/5/14 at 3:16 pm to I Love Bama
From the census. 2008-2012.
Huntsville: $48,632
Alabama: $43,160
Huntsville
Baton Rouge:$38,974
Louisiana: $44,673
Baton Rouge
Huntsville: $48,632
Alabama: $43,160
Huntsville
Baton Rouge:$38,974
Louisiana: $44,673
Baton Rouge
Posted on 1/5/14 at 3:20 pm to bamafan425
Thanks for the links. The point of the thread is kinda getting off track.
We discuss a lot of retirement options on this thread with very little RE talk. I'm just bringing something new to the table for discussion. The average Joe can make much more money in real estate I believe.
We discuss a lot of retirement options on this thread with very little RE talk. I'm just bringing something new to the table for discussion. The average Joe can make much more money in real estate I believe.
Posted on 1/5/14 at 3:21 pm to I Love Bama
Good find and interesting idea. Do you find lots of these kinds of situations?
Posted on 1/5/14 at 3:30 pm to Janky
I wish I could say I did. I've sent a few letters in the past with no luck.
However, almost all of my rentals have come from distressed properties.
My real estate buddy told me,(I guess you could call him my "mentor")To keep it simple, he said his investment criteria is the 2% rule. If you can rent a house for 2% a month (or more) of the purchase price, he buys it. He is one of the richest people I know and it has worked for me so far.
This one is almost a 3%er. Home run for me.
However, almost all of my rentals have come from distressed properties.
My real estate buddy told me,(I guess you could call him my "mentor")To keep it simple, he said his investment criteria is the 2% rule. If you can rent a house for 2% a month (or more) of the purchase price, he buys it. He is one of the richest people I know and it has worked for me so far.
This one is almost a 3%er. Home run for me.
This post was edited on 1/5/14 at 3:32 pm
Posted on 1/5/14 at 3:32 pm to I Love Bama
quote:
The average Joe can make much more money in real estate I believe.
They can but are you paying cash for these properties? Real Estate is all fine but it can be a balancing act when you have loans out for all these properties. They downside risk is larger and it involves way more of your time.
That being said, I do "live in" flips and its enough for me because i like to do the renovations myself. My wife wants to flip a secondary house though.
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