When I first started out I would buy anything anywhere that would make me money and that my banker was on board with. I never did a whole lot of due dilligence like I do now , because I was young, naive, and just assumed that no matter what happened, I would just put my head down and push throught whatever problem I had. I know this method sounds stupid and impulsive, but I'm not a detail oriented guy, in fact too many details put in front of my and my attention wanders , so I only looked at the bigger picture and assumed the little stuff would work itself out.
I still go on my gut instincts just like I did when I started, but basically if I question a deal at all, I just listen to my gut, up to this point, it hasn't let me down. Can't recomend this for everyone, but it got me this far. If the numbers work and you go into the deal with an open mind and a willingness to work hard no matter what, you'll be fine and successful in time.
But it does take time, and if there's a shortcut to all of this, I'm not aware of it. I've been doing this for over 20 years and all I can say is you can't treat it like a job, you should treat it as a way of life, the great part of all of it to me is that I never feel like I "have" to go to work, I "Love" to go to work. Good Luck to you. Of course around San Francisco you may need to put a few more zeros in your calculations than I have to do in NE. Sorry for the confusion but I actually already attended the 3 day "Boot Camp" offered by Frank and Dave last year and I was very impressed by the amount of information that they shared.
I will be attending it Jan again as a refresher but the content will likely be identical or at least very similar. Given that I'm a Passive investor ie. I hope that makes sense. Sean Kremer what a great story! Thanks for sharing it with me, and others! Did you use a RE agent for first purchase or, did you figure things out on your own? Anyway, thanks again and talk soon!
Jeremy Roll I understand. Glad to hear that I have this option available. They also offer seminars on the subject.
Miscellaneous | Arcata Mobilehome Ordinance Study Group
Anyway, thanks again and take care! Hello everyone, I would like to continue the thread and ask those whom have already invested in MHP. But, since this is my first time and, obviously, don't have much experience, do you think reading the books and attending the seminars would be enough to learn what am I supposed to know on the documents or, should I just hire a lawyer to support me throughout?
I would really appreciate your comments on this, thanks again! I think there are some interesting parks here in the Bay Area. Let me know if you'd like to collaborate. I'd like to bounce some ideas and properties off of someone in the area and looking at the same kinds of investments. There are many good points made here. So why a MHP over apartments? I researched MHPs extensively and financing for apartments is typically easier and the depreciation especially with cost segregation is likely substantially more since you primarily have just the dirt with a MHP.
Have you talked to a CPA about the difference in tax benefits between the two? Ross Hillesheim - I would love to chat with you, of course! If you are interested, please join us! In the ideal park the tenants do actually own the homes. They only rent the lot. Your responsibility for maintenance and repair is for the lot not the home itself.
Most parks do have some park owned homes that they rent. Usually for more than the usual lot rent to cover any costs for maintenance and repair. We are also looking for a park to buy. We are located in northern CA Redding area.
We just attended the Frank and Dave mobile home park bootcamp. It was excellent. Please give us a call if you are interested in collaborating. Would love to chat with you, and Cindy, about your experiences. I have also started a local MeetUp group here in Marin County to hopefully meet with other investors in the area and share info. Sean Leone ,.
Sean, you're spot on in regards to the cost segregation study and accelerated decpreciation schedule of mobile home parks relative to apartment buildings. Park improvements utility lines, roads, mobile home pads, etc. These items can typically be depreciated over 15 year schedules vs Not only do mobile home parks generate outsized cash flow returns, they are also the most tax efficient real estate investment that I am aware of.
Join the millions of people achieving financial freedom through the power of real estate investing. If you signed up for BiggerPockets via Facebook, you can log in with just one click! Log in with Facebook. Full Name Use your real name. Password Use at least 12 characters. Using a phrase of random words like: paper Dog team blue is secure and easy to remember.
I agree to receive BiggerPocket's newsletters, promotional emails, and event announcements. You can withdraw your consent at any time. All All. I want to live in SF! So if I go back to the house I sold in Ft. Lauderdale when my job forced me to move.
I had a great pool with solar power water heater, and 10 miles from the beach. So that means it is So that is below the threshold, so hard to say either way whether it is better to sell or rent out. I guess having employer pay all the closing costs and taxes pushes selling a bit better. So I made the right decision then, but I miss that house and unfortunately, while FL is the east coast, there are no jobs there. Woulda kept it, but oh well. It all depends on how you reinvested the proceeds. What did you do? I thought market was going to crash, so I tried a bond fund, lost money, took losses at the end of , and then put that into the stock market and have done OK.
Sometimes I wish I had kept the house with its pool and fruit trees. I just wish I had done a dollar cost averaging of the proceeds when I got it instead of leaving it in cash. In fact I think values would have to be above 40x the rental value to even contemplate selling and then I think primary residence tax considerations would still point to ownership. I think something has to give be it prices downwards or very possibly rents upwards in SF if mortgage rates are 3.
If so, that really is a big deal. But there is not mortgage interest deduction on your income right? Oh man, I would arbitrage that all day long by selling and redeploying. Yes, owners pay no property tax at all. I also think politically there would be huge obstacles to increasing this significantly. K your own residential property is CGT free. Also, if you rent out your property in the US, can you rent out another before paying tax on the rental income received? So instead of sell it, just live in it and use your extra cash flow to not invest more in London at this point, but in much cheaper areas for cash flow generation.
It depends on when you want to stop working or have an easier life. How leveraged are the real estate trusts in the MidWest, I think it would only be worth selling up if I was able to maintain my ratio. Sam, I love the premise of the article but I am not convinced investing through crowd funded platforms like RealtyShares or Patch of Land is the solution. The better option is to actually buy houses like you mentioned in flyover country and develop a team for property management and repairs. Also what are your thoughts on doing a cashout refi for bay area properties to continue maintaining the leverage?
Never invest in anything all at once! That is the last thing I want to do at my current stage in life. Let me co-invest and have someone else deal with everything. I visited realtyshares and fundrise sites today. It could be a change in mindset. I mean, in India folks still prefer physical gold than buying GLD. Its the same mindset which makes one feel to keep cash under the bed vs.
Its not real, or at least does not appear to be. The same can be said about stocks — the problem is with very specific stocks. Rent is NOT all about passive income. According to your post and my preference, is it rational to rent in HK and buy in other nearby countries? If I was in HK paying Prices have surged, but they are still so much cheaper. I was there a couple years ago. I just bought a property in April, and plan to buy another in July. I invest in location. Not in millions yet like SFO or Boston. But owning one, I am a strong believer in what can be rented easily, than in x rule when it comes to RE investing.
What is your reason for buying in April when the market is so hot versus in the past? And why are you buying another in July so soon? What is the PRice to Rent ratio in Denver? Do the math! In all honesty — loss of patience to sit on cash. The condo in downtown, that my instincts are sold upon, is supposedly coming this month, with completion expected in Nah, I am not on a younger side. Turning 48 soon. Perhaps younger in financial wisdom :- RE will be over a third of my NW. Would you be willing to share information on the Denver downtown condo? RE as a side business to flip, generate a ton of rentals, is not my cup of tea.
It might have worked in last decade. This generation could be unique to what it has experienced in May not happen in next years. So I take all so-called-success stories of last 10 years with a pinch of salt. To me, RE is lifelong investment. Not even close to investing in Index funds, let alone day trading. When one buys, one should buy as if its forever.
Not from Memphis, or Indianapolis. So take such advise with a pinch of salt too. There is no dollar cost averaging in RE, so timing IS important. Pretty insightful post. It is NOT. Investing in RE is akin to investing in stocks, or else choice would be too easy. Because its about rentability! If your house is empty most of the year in Pochita, you make Pochita as a landlord! The world map is the proof. Whats the rent for a condo in Beijing or Mumbai, for the cost of the house? They are betting on appreciation in hot markets. Is Boston? Of course, folks are attracted to opportunities, and they find it in these cities.
They pay the price. The demand will go on and on, the land remains the same. Supply and Demand. It only tells that with time, house value appreciation as a landlord when no longer attractive will force that landlord to increase the rental price. Not everyone can rent for cheap in a market where house prices are not appreciating. Landlords allow for a cheaper rental ONLY because their house value is increasing over time. In the end, Owning a house is a better value proposition than renting. Be it luxury markets or utility markets. Utility markets attract a different segment of tenants, and trust me — you dont want to handle them.
Thanks for your thoughts. Investing is full of assumptions indeed. Check out the conclusion of the article. The last two paragraphs. How is your real estate portfolio structured between growth and income? And what are you doing now with your properties? I am in the middle of the Midwest… Own 7 units. Was thinking about selling out and packing up to the beach. But maybe I can just rent. A Lot to think about for sure. Great post.
READ book Trailer Cash How To Cash In On the LowIncome Housing Investment Boom FREE BOOOK ONLINE
Great Post FS! Perhaps, when we retire our perspectives will change. I certainly know how you felt when those 5 guys destroyed your property. Hi Dick, it was easier for us to let go because we had found our new current primary residence. The other thing I told myself was that everything is fixable. It just cost time and money. So if you have enough of the deposit, then all is good.
And I realize that after the first turn over when I thought the house looked bad but then after spending time cleaning and fixing stuff it looked great. Interesting stuff! Having said that though, maybe when I downsize at retirement, I can rent out my primary residence. A few years back, my family did the opposite: we moved into a bigger home and rented the small one instead of selling.
Now that I think about it, the choice was OK for the time being. But nowadays, your approach seems like a much better idea! Did you like the bigger home? I would have been happy with 1, sqft, so I rented out a room. At the time, sure. An upgrade felt good. Until may parents figured out a solution, the heating bill alone was enough to put an ugly dent into the family budget.
Knowing how much house you actually need is always a good idea. Otherwise, experience taught me there are certain expenses that could turn out to be more than one can handle :D. Hi Sam, totally love this post. I wonder how much this ratio has to do with the possibility that the better to rent markets have home prices will appreciate more over say Raymondville Tx. If your 6.
Just answered my own question. Mind blown. Even if you think you may have higher vacancies on the 62 rentals and need to hire a staff to handle the payments, repairs, collections, etc. Speculation makes us rich and poor. It always has. And principal appreciation is great, but only if you one day sell. I am a landlord in Chicago and honestly would like to get out of it. Love the article though, thanks for an always superb read. SF and California is pretty bad too. Prop tax keeps going up. Hawaii, on the other hand, seems great. Excellent point re: Chicago and Illinois.
A number of Illinois citizens who were ignorant, or at least indifferent, on the income tax increase got a slap across the face when viewing their paychecks yesterday. I knew it was coming and it still hurt. Your Midwest example almost matches my scenario completely. The difference really is crazy, but so is the capital appreciation.
Yes, got 2, sqft for you on one floor with panoramic ocean and sunset views no problem! Great post Sam. Always learn something new from your posts! Reading your renter nightmare post really nailed the peg in the coffin for me. That being said, sometimes it still works out better to buy rather than rent. Hey Sam, this is bar far one of your best articles to date!
Really nice work here. Quick question, can you provide a link for that interactive zillow chart showing price to rent ratio? Thanks man, keep up the good work! Then I found the article talking about rents and it is embedded in the article. Midwest detroit suburb real estate investor. I have a hard time investing in anything else but real estate due to the math!
Great interesting read. After we finish remodeling the master bath and the kitchen we are not sure if we should take the profits and run or rent it out for an even higher rate. What do you think? Depends where do you live and what is the Median Cost to Rent ratio? Are you willing to move locations? Can you telecommute? What is your current PtoMR now? Not sure the math is right on your rent vs buy analysis… I think the opportunity cost you use is skewing the results. So many variables. The higher your marginal tax bracket, the more advantageous it is to own.
But yes, renters are short, primary homeowners are neutral, and multi-property owners are long.
Would it ever make sense to buy here? Having a rent controlled apartment in SF makes the argument even stronger for renting in SF and employing all your real estate desired investments to Utility cities for stronger returns. For renters, the key is to mobilize capital efficiently and not just let it sit in a savings account and get nothing or worse, spend. This post is a good discussion for first time homebuyers. I have always rented my primary residence, and own a lot of investment property. Hipsters are nice and all, but I prefer living in a luxury downtown high rise with all the amenities.
These rent for x the an apartment I am moving into. The owners just bought the property, and are renting it out I have on clue why, but will happily enjoy those savings. As you get higher end, the multipliers get even more insane. I see very large condos in nice buildings renting for x. So many people buy just so they can go home at Thanksgiving a Homeowner, rather than actually doing the math. They just bought and rent out the place bc they believe in capital appreciation and they probably have excess cash flow, so no need for more cash flow at the moment.
The key is to really bank the difference and invest to more than make up the difference. Forced savings does help.
- International Relations: All That Matters?
- Girly Head Wrap Knitting Pattern - 6 Sizes Included.
- Flash Card Fun : The Complete Collection.
- 8 Proven Ways to Make Money in Real Estate.
- MORE THAN A MEMOIR!
But we all know not all investors are not rational, presenting opportunities for those of us who are rational, which I am grateful for! Spot on from the Midwest perspective. I am a real estate investor in Indianapolis. My average rental home costs about k. Ratio of about 8X. On my last deal, my 13 year old son was by my side every step of the way, from looking at the property to closing a 2 year lease with tenants within a week after closing on the purchase of the house. That is awesome. Just imagine the empire you will build at a 8X multiple over the next years.
Your son will be pumped as will you. I like the concept. The value is probably around 20x annual rent.
I hate paying taxes, though. Honolulu sounds great. I think you will be surprised at what your primary residence can now rent in the current market. Then I realized ….. Time to rent it out! You make me want to rent out my primary residence and buy a smaller place! I have debated the numbers. That is pretty nuts and I am not sure I want to be paying that much in property taxes for a view in retirement. So for now I will sit tight, hope for some appreciation and maybe sell in 5 to 10 years when I am ready to pull the part time or full time retirement cord!
North of San Francisco. It was high as is and then we got hit with a supplementary payment due to appreciation of the home price. Be grateful for what you have — it could be worse. In Michigan, the school property tax rate on rental property is 4X the rate on owner-occupied primary residences. My Price to Income ratio is 3 x so not bad but I hate sitting on a K loan. It makes me itch. Still the spot is pretty sweet with sunset views every night. I like the idea of BURL and in the future will likely follow it.
I am a fan of the ability to be mobile without any hassle i. Man, 3x is better than Raymondville, Texas! BURL all the way! On the lower end of the market K — I almost feel it is not worth to sell your house, but to rent it if you want to move. This makes me absolutely sick. In Northern NJ, near NYC is gaining great prices, out further west, the prices are still down from period, I think there will be good opportunities there as well for rentals, vacation properties, etc.
I like this post. Publication Date. The Nile.
- 18 Income Producing Assets to Generate Serious Passive Income - My Money Wizard!
- What Determines Luxury And Utility?.
- The island that was not?
- A Students Key to Ancient Greek Thought: An Introduction to Philosophy (Ancient Greek Philosophy);
- Product Information?
- Companies leading the push into pre-fabricated housing parks.
- Time Management - Your Handy Guide To Success (Life Skills Series Book 4)!
Shop Now. Enjoy Now. Pay Later. Pay in four simple instalments, available instantly at checkout.
- [PDF] Trailer Cash: How To Cash In On the Low-Income Housing Investment Boom Download Online;
- Prisoners Base (A Nero Wolfe Mystery Book 21)!
- Shop by category.
Pay in 4 equal installments Use your existing debit or credit card. Select Afterpay at checkout No long forms, instant approval online. Get your order without delay Your order will be shipped as normal.
Related Trailer Cash: How to Cash In On the Low-Income Housing Investment Boom
Copyright 2019 - All Right Reserved