buy and hold??? - Posted by Gary O

Posted by Gary O on March 04, 2002 at 09:07:50:

First of all I havn’t been smoking s*&t, and I did not say MFH’s is less of a headache!!! I said that maybe a condo is less of a headache, where I only own what’s inside the walls. My thinking is if a condo unit has a good HOA then the entire grounds are maintained by HOA, hence one less thing I have to worry about. Also, in doing my research and punching the numbers I have ran across some condos that would cash-flow just as well as SFH’s and some MFH’s (2-4 plexes). So with that said I was just looking for some input on what other people thought of investing in condo’s.

As for my goal, I am looking at something long term. I see rentals as a little more secure that flipping. If I were to just rely on flipping than that means you could have a bad month or a good month and I don’t want that. What I do want is about 40 - 50 units that are rentals so I know what I can expect month to month. Once I have that monthly income then I would like to get into flipping. See, I have a great JOB right now, I also have $150,000 easy in equity in my current home, and I also have $140,000 in the bank from a past rental I just sold. I am doing very well right now and want that security of monthly income.

buy and hold??? - Posted by Gary O

Posted by Gary O on March 01, 2002 at 17:47:56:

I was just looking for peoples opinions on my current goal. The main goal I have set for myself is to purchase enough rentals within a 3-5 year to where the monthly income out does my current income from my job. I don’t really want to do fixers and I don’t think that I want to rely on flipping month to month. I just want a nice networth that brings in a good chunck of change every month. This is my goal and no my goal is not this vague, I have detailed it out. Just what do you think of this approach to REI.
Also, I’m obviously just starting out and have been looking at MFH’s, SFH’s and condos. What has your experience been with condos? To me they seem like they’re easier to manage than SFH’s or MFH’s (less headaches) and can in some cases produce the same monthly cash flow as SFH’s. Don’t get me wrong, I’m not going to focus just on condo’s, however, I think I see alot of potential with them. Thanks for your comments and insight CRE Online community.

Re: buy and hold??? - Posted by TJ

Posted by TJ on March 03, 2002 at 24:27:09:

You don’t state what your current job income is so I don’t know what your target is. I suspect that three to five years is a little short. If you are starting from scratch then I’d guess that 5 to ten years is more reasonable. I am assuming you are not starting with sizeable capital reserves.

That said, it is not overly difficult to achieve a permanent, sustained, comfortable, primary income from buy-and-hold income properties. As residential properties go you will want to acquire apartment buildings. They cash flow the best. While you will likely begin with 2-4 plexes because cheaper and easier to acquire, set your sights on larger properties. Invest in SFRs only for short term holding. The bigger the better (economy of scales). Buy in lower income areas, The cap rates are higher. They involve somewhat more hassle but only slightly more actual risk. Do not use a property management company.

I too recommend the Schumacher book. Acqisitions for long-term versus short-term are different strategies with different criteria. Use the flips and quick cash-out deal to catapult you into the larger keepers.

Good Luck.

realistic? - Posted by Bud Branstetter

Posted by Bud Branstetter on March 02, 2002 at 20:40:48:

The odds are against you. But you may be that one person like the France’s that can do nothing down subject to’s and generate the income. What have you been smoking if you thing MFH is less of a headache? You can make money in condo’s. Most people just don’t.
If I were a betting man I would put money that you don’t do it your way with rentals in 3-5 years. Enough said.

Re: buy and hold??? - Posted by Karey

Posted by Karey on March 01, 2002 at 19:44:21:

To meet your goal or plan, either you will need to have many MFH’s and SFH’s or a couple massive buildings with about 40 units. If you are just getting started, a combination of flipping and rentals is the best way to go.

Re: buy and hold??? - Posted by David Krulac

Posted by David Krulac on March 01, 2002 at 18:05:45:

check out book “Buy and Hold” by David Schumacher and
check out the archives here on this board for buy and hold.

David Krulac