sulkair

I have been moved so many times in my regional career, i managed to pick up 3 single family homes, and they couldn't be more geographically removed from each-other. I got each one with very little money down, and lived in them on average 2 years before converting to rentals. Well actually i live in the 3rd house now. The first two are positive cash flow. So far, 8 years running i've had good luck with tenants who've stayed put. But one finally went vacant and the distance made it difficult.

Can anyone using property managers give advise on using them. Ive heard horror stories about them too.

Also, my last home, the one im in has appreciated the most because i was able to buy at the bottom (just dumb luck). How can i use this equity to jump start my little empire. I'd like to have 10 rentals someday.

Problem is, gotta move again if i want to upgrade. I refuse to commute. Little ones. Then again, thats another opportunity to use the VA loan for another house. But it will be in yet a 4th city.

My cash reserves are nil. Downgrade, and a 25k investment in developing a product ... BugAlien- Best Bug Catcher Ever! Snapping Jaws, Powerful Magnification has drained me. Very little debt though aside from the mortgages. Credit 800

This is a great thread, i hope some of you guys have a few pointers for me to capitalize on my small beginnings.

I gotta build a nest egg fast. 43 yrs. / little kids (college money someday)

C17 Lyotchik

Thought Flap was right on the money... the guys I have seen get in trouble bought into "alligators," properties that consume cash (and time!) each and every month.

I have a number of rental properties, and think that income properties (as opposed to equity plays) are the way to go in the current market. Just my
.02 ; )

DFWAviatior

My wife and I have two rental properties and are actively seeking another. For those who own properties in other cities, I'd recommend a management company as there can definitely be issues that demand prompt local attention.

Real estate offers several advantages: the opportunity for asset appreciation, profits from positive cash flows, having tenants rents build your equity position, various tax advantages, and write offs.

Though I manage our two current rentals myself, I plan to use a management company in future "Section 8" properties.

If anyone is looking in North Texas, PM me. I'm a realtor and love working with fellow pilots!

mayutt

We own two rental properties, both of which are houses in which we used to live. I manage them myself, but I've used an agent to market, show and draft up leases a couple of times when I didn't find a new tenant right away. This has been very helpful for us because we live a long way from both properties now. The standard fee has been 1/2 month's rent. I have good handymen and neighbors at both properties so for me the usual 10% for a full service management service wasn't worth it. However, having someone else show the place and get it occupied was well worth 1/2 month's rent. I'd recommend this to anyone in similar circumstances.

mcartier713

It seems like the majority of this topic has been centered around single family homes/duplexes... Has anyone had any experience with taking the condo route?

I figure that with the lifestyle we've all grown to love, having an HOA solves much of the management and maintenance issues that we can't deal with on the road, similarly to hiring a property manager, however already "built-in".

Also, like SkyHigh and other's have said, investing in what you know. I know I personally enjoy condo living as a pilot. Makes my life much easier. I would also assume the quality of tenant would be better in the condo world.

Thoughts?

bcpilot

One has to be very careful with condo units & projects.

The HOA fees are typically very high. While they cover for services that the HOA provides, but those services provide value only to the owner occupant who lives there but for the investor, these HOA fees just eat in to the cash flow.

The HOA fees are ever increasing & there is no way to predict how much the fees will increase in the next few years.

Most HOA's have a limitation on what % of units can be rented out, so sometimes one may have to wait in line to rent a unit.

Another issue is that if more than 15% homeowners are delinquent in the HOA dues, then no lender will give a loan for that project, which means, it could be very hard to sell.

Also, if the HOA ever gets into litigation, then there is NO loan by any bank, means you can't sell to a buyer who plans to use financing or in other words buyer will have to be cash only.

Be very, very careful before investing in a Condo project.

mcartier713

Just to play devil's advocate.. the majority of the latter part of your response deals with the assumption you'd want to sell the condo instead of holding it.

And the first part, you are indeed paying for the services HOA covers, but how does that differ some freelancing those services or paying a third party mgmt company?

bcpilot

No matter how long one holds a property, every Investor has to sell one day, that's how you cash out on the profit. Even if one never planned on selling, the issues mentioned in the latter part of my response directly affect the value of the property.

Seondly, I think, you are confusing the Home Owner's Association (HOA) with the Property Management Co & the Apartment Management company; they may appear the same, they are all different in their scope & nature of duties.

For new investors, it is always advised to stay away from developments with expensive HOA's. The investors should always get professional advise & then invest in condos only after thorough consideration of all aspects.

A single family, 1 unit or at max a 2 unit property, is better for new investors who are just starting out.

7AC2B60

"Can anyone using property managers give advise on using them."

obtain referrals from local realtor, CPA or attorney

pilot64golfer

Unless you have a ton of cash or access to a bunch of money, real estate isn't a cheap form of investment. Its a crowded field, and the sweet deals seem to get grabbed up fast.