Posted by Dale-Ohio on June 17, 2004 at 17:42:24:
thanks everyone for all of encouragement. I think what is the most frustrating is, trying to find the properties even to try to make the deals. I know how to do subject 2, lease option,double close, flip, ect. I am running an ad in the paper and mailing letters and post cards. Is that all? I keep thinking i must be missing something. I have not tried driving thru areas and looking for empty houses that are for sale, but will start ASAP. thanks
50 or more properties? How? - Posted by Dale-Ohio
Posted by Dale-Ohio on June 16, 2004 at 09:32:49:
I just heard of an investor near me that has more than 50 properties, which i think is fantastic! it makes me wonder what i am doing wrong. although i am a newbie and have 2 properties (just started this year). I send out letters and post cards to people going to auction. I have an ad in the local paper. I can not run bandit signs. My area will not allow it. What area of marketing am i missing? i would appreciate any help in this area. thanks
the number doesn’t matter, I know… - Posted by anon
Posted by anon on June 17, 2004 at 22:30:03:
my “best” year I bought 67 properties. it almost killed me. another year i bought 1 property. it almost killed me. there are so many factors that enter into it, including are you full time, how much work does each proeprty require, do you do the work, do you have employees?
i recently went to a real estate convention where 1 speaker said he bought 365 houses last year, 1 for each day. later it comes out he has 5 people on staff who do most of the purchasing. he has rehab crews on staff to do all the repairs. he has clerks and bookkeepers, etc. he might have 36 employees. then its only 10 houses per year per employee. the number doesn’t seem as big when you look at it that way. I have a friend who’s goal is 1 house a year, keeping it and renting it. 1 house a year is doable.
Re: 50 or more properties? How? - Posted by Frank Chin
Posted by Frank Chin on June 17, 2004 at 10:45:36:
Dale:
I was just chatting with a customer at my biz. this week who mentioned he owned a commercial property of many years, now free and clear, that he rents to a supermarket at $17,000/month. Of course, that’s NYC rents.
I chatted with someone in the CREONline chatroom a while back who owned 70 houses in the midwest, many rented to section 8 tenants, and he nets $100.00 per property after taking into account mortgages.
Now compare the work of these two. Supermarkers usually triple net lease the place, handle maintenance etc. And they stay in the location years and years. Lots less work than managing section 8 tenants.
This customer of mine owns several other properties, but not 50.
I would rather own ONE that nets $17,000/month rather than 50 houses netting $100.00 each.
The downside is when the ONE tenant, in this case the supermarket, cannot pay the rent. This customer of mine is in the process of evicting the supermarket. But, he made out well through the years though.
Still, I rather have a handful of commercial tenants.
Frank Chin
Re: 50 or more properties - Posted by ken in sc
Posted by ken in sc on June 17, 2004 at 07:04:28:
Sean is right - numbers do not really matter. What matters is profit. I have close to 40 rentals, but would rather have 30 with more equity and more cash flow.
Just keep plugging away - time will help you. You will learn more every day and get better and better at this biz. There was a time I thought buying 8 houses a year was good. Now I buy one a week. Just keep making deals that make sense! Don’t buy for numbers, but for profit. If you don’t make big mistakes and thus last in this biz, eventually you will find yourself one of the more successful investors in your area.
Ken
Re: 50 or more properties? How? - Posted by Sean
Posted by Sean on June 16, 2004 at 10:13:56:
Dale,
Having 50 properties is great, but how long have they been doing it, and what type of properties are they? And how well do they cashflow?
Don’t judge yourself by what others are doing, judge yourself by what you are doing relative to your goals.
My wife and I are entering 3rd year in the business… year 1 we did 2 properties, year 2 we did 5, this year we have done 5 so far, and very likely will have 6 done shortly unless it falls apart (our goal is 12 this year, and we are still very much part timers). Now other than 1 property which we lease optioned and only had 12k left on the table, every other property has had an average of 20k or more equity in it the day we bought it. So, I’m not complaining.
My wife however talked to a couple who had done 6 in their first year… and she got a little irritated and depressed because we had grown so “slow” compaired to them. I quietly sat her down and said, look where they bought those 6 properties, they had 6 properties in a neighborhood that I know we could walk into and buy blocks of properties in very short order.
Then I showed her our income sheet and our equity numbers and other things… and said, look we have done this conservatively and allowed the profits to fuel our growth, we also started at a time when every ounce of money we were making from REI had to pay bills… so that has slowed our expansion. I gently reminded her don’t worry about what others have done, just stick to your plan and path.
Also, keep in mind the more deals you do, the easier it is. Once you become a known and serious buyer, word of mouth will bring you deals you never knew were out there. Just like any business the longer you are at it, the more stuff comes your way.
Now as to what you can do other than just post cards and ads, is probably number one thing is go out and drive the neighborhoods, find the ugly vancant for sale houses and start making phone calls! Passive advertising works… Drive the neighborhoods and don’t stop until you have 20 potential leads… if you are in the right neighborhoods for junkers it won’t (in most markets) take you more than 30 minutes to an hour to find 20 or more leads.
The other thing is, invest in your education… if REI is making you profits, earmark some of it for seminars, and training. Believe me, the more training you get the more deals you’ll be able to work out and the more money you make.