Posted by Paul on August 24, 2011 at 13:25:29:
Here are a couple from zillow.com
42-XX S Eddy St, Seattle, WA (Brighton) $49,900
5810 24th Ave NW, Seattle, WA (Ballard) $50,000
3425 33rd Ave SW, Seattle, WA (Admiral)$52,500
Cash Cow Rentals - Posted by arlanj
Posted by arlanj on August 23, 2011 at 16:33:38:
I think Cheap Rentals is the best cash cow type of business. Try this on for size:
In regular America, not necessarily in the major cities. Go buy 10 houses for around $50,000 each. Payments on a 10 year note would be around $5500 + 600 insurance and taxes. Rent for an average $750/month leaves $1,400/ month for maintenance and other costs. You just bought yourself a part time job. At the end of 10 years you would own FREE & CLEAR 10 houses that are earning 6900/ month +/- in rents after insurance and taxes. That is an annual income of $82,800. If my cap rate is 10% the houses may be worth as much as $828,000.
How much did I pay for those houses? Only my labor at the part time business of managing them and collecting the rent.
The renters paid for them. They bought them for me.
Now what if I bought an additional house each year, maybe a $25,000 house with money from my full time job. Now at the end of 10 years I have 20 paid for houses, at maybe $12,000 monthly rents. I would own free & clear over a million dollars of real estate.
10 years of a part time job and I would have a great easy part time job retirement. At $144,000 in annual rents. Its no cushion for retirement, it is a good retirement, leaving me time to invest more, vacation more, live more. I will be 53 when I get my rentals paid off.
I can’t believe I sat at my accounting desk for 18 years before I started. If I had started in my 20’s, who knows. I would be a multi-millionaire selling courses to people who would dream but never get in the game.
Re: Cash Cow Rentals - Posted by willOH
Posted by willOH on September 11, 2011 at 20:57:11:
50K on 750/mo rent is kinda tight. I have a house I own since the malaise era, with a 60k balance on it and 950/mo sec8 rent. it makes me vomit every time I see it, because my last 6 properties cost me 10k each FIXED UP. Welcome to Cleveland.
Re: Cash Cow Rentals - Posted by Jack
Posted by Jack on August 24, 2011 at 24:32:38:
Now is a good time to buy rentals if you have cash, or if you can get financing, so I am not saying it is a bad idea. But, you’d be filing bankruptcy now if you had started from 3-8 years ago, the cash flow just was not there. And financing for NOO is hard to get for less than 30% down currently. And you paint a rosey picture that only a novice could paint. You have yet to learn about defered maintenance, lead based paint, evictions, and a dozen other problems that will drain your time and cash flow. Very few areas will allow you to buy a house for $50,000 off the MLS and rent it for $750, and those places usually have high property taxes and/or are war zones.
Re: Cash Cow Rentals - Posted by Alec
Posted by Alec on August 23, 2011 at 18:27:49:
How would you recommend I do this if I live in a major city? I always thought I should invest where I live and not have someone manage for me remotely. In Seattle there isn’t anything close in price to $50000 that I could buy and rent out.
Re: Cash Cow Rentals - Posted by Sailor
Posted by Sailor on August 24, 2011 at 18:30:58:
I can get financing for 20% down, just like in the past. Having re-built many homes, I am well aware of deferred maintenance, evictions, septic overflows, illegal tenants, druggies & drunks, pit bulls, feces on the floor, etc. But golly, I still make $$$ & my children will be able live on the rents my F & C properties generate. After 31 years of landlording I no longer consider myself a novice.
Re: Cash Cow Rentals - Posted by Chris in FL
Posted by Chris in FL on August 24, 2011 at 13:12:19:
Jack,
I am in Central Florida… Here, we can buy houses off MLS, investing under $30K including all repairs, and rent them out $600-800/month. I have bought 15 of them in the last 18 months - almost all REOs and short sales that were on MLS. No war zones. I will concede the financing end is tough right now - I searched for over 1 year, and finally found a private lender that is suited perfectly to my system. We do 7.5 year mortgages, fully amortizing, at 8.75% interest… He loans 80-100% of purchase price; I pay whatever down, plus closing costs and repairs. These deals cash flow including all expenses, vacancy factor, repairs, etc. Plus, they will all be free and clear 7.5 years after purchase.
It can be done!!!
Best wishes,
Chris in FL
I promise there are other areas you can do this… I hear you can get houses in Michigan where rents return your purchase price in 1-2 years!
Re: Cash Cow Rentals - Posted by David Krulac
Posted by David Krulac on August 24, 2011 at 11:56:26:
Right now we are selling 3SFH for $49,900, $59,900 and $69,900, all rent for at least $750.
We have a 2 unit, grossing over $1,000 mo that is for sale for $69,900 and a 3 unit grossing over $1,500, with tenants paying heat & electric.
We have sold $20 - $25,000 SF houses that gross $450.
One of the places to find low price rental is areas 50-100 miles away from the urban centers. True these are not growth areas and are typically small older towns or surrounding rural areas, but the cash flow can be good and many tenants stay for a long time.
Right now I have a tenant, that is renting the same place that they have continually rented since 1984, that’s 27 years without 1 day of vacancy,… sweet.
Re: Cash Cow Rentals - Posted by arlanj
Posted by arlanj on August 24, 2011 at 08:27:33:
I bought my first rental in 2003, 5 in 04, 6 in 05, 12 in 06, 7 in 07, etc. I buy cheap houses, I have seen it all with my rentals. The disasters, the slow pay, the evictions, I never said is is rosey.
I own 36 SF rentals and 2 commercial properties.
I may not be an expert, but no novice.
Arlan
Re: Cash Cow Rentals - Posted by Sailor
Posted by Sailor on August 23, 2011 at 23:18:31:
Look at mobile homes–lots of them in your area. There is an excellent MH forum on this site.
Re: Cash Cow Rentals - Posted by arlan
Posted by arlan on August 23, 2011 at 19:30:36:
I agree that in the major cities and East and West coast it is more expensive. But if the property values are higher, the rents are also higher. You might not need to buy as many. I did find at least 10 properties from $50-65000 on the Seattle MLS. I believe that if a person was in the business, there are more, and there or will be properties below 50. A few of my better deals were houses that I seen that looked vacant, had tall grass, etc. I wrote them a letter and they were glad that someone wanted to buy their property.
Start looking in the burbs.
Re: Cash Cow Rentals - Posted by Don Bolieau
Posted by Don Bolieau on September 22, 2011 at 15:15:08:
Yes, absolutely you can do this in Michigan. Our company sells Detroit turn key rentals with well screened quality section 8 tenants. Sales prices start at around $35K, and rents from $795. All nice homes in nice areas of Detroit, no war zones.
Re: Cash Cow Rentals - Posted by JTH
Posted by JTH on August 24, 2011 at 18:39:22:
Arlan do you have any tapes or courses for sale?
Excellent reply. Don’t discard it. - Posted by Jeanne
Posted by Jeanne on August 26, 2011 at 24:50:11:
Alec,
Please don’t poo-poo Tye’s answer. I was thinking the same thing. You will be surprised at how many mh parks you never noticed before–even in a big city.
Here is an excellent free education in mobile home investing:
Thanks, Tye.
Re: Cash Cow Rentals - Posted by Alec
Posted by Alec on August 24, 2011 at 01:09:37:
I didn’t see any properties in Seattle on MLS for $50,000.
Re: Cash Cow Rentals - Posted by David Krulac
Posted by David Krulac on August 27, 2011 at 19:16:04:
I like BUY AND HOLD by David Schumacher
Re: Cash Cow Rentals - Posted by arlanj
Posted by arlanj on August 25, 2011 at 06:43:47:
No. I wish I did. I need to start writing.
Basically the only book I ever read was “Buy it, Fix it, Sell it” by Kevin Myers.
Re: Cash Cow Rentals - Posted by Sailor
Posted by Sailor on August 24, 2011 at 18:34:11:
They are available, & the best deals never show on the MLS. You have to learn to farm your area, & as I said before, MHs can be sweet deals in the Seattle area.