Re: How do you acquire rentals? - Posted by Jay_TN
Posted by Jay_TN on July 09, 2001 at 17:59:16:
Hi, Ken. Thanks for the reply.
The area my rentals lie is a hot city. Growth is explosive, but since it’s a relatively new city, there are very few “ugly” houses to buy. I buy these ugly houses at good discounts and then rehab and rent. Usually, on an $80k property, with 20% down payment, I will come away with a $200-350 positive cash flow, after mortgage, insurance, and expenses.
However, since I enjoy doing remodeling work, I think I can actually buy, rehab, and resell. My intention is to go into OTHER communities, with older houses, buy, rehab, resell. Of course, then, I’m looking at the profits being taxed, as well as paying self-employment income, so there needs to be a good profit. However, the homes in the OTHER communities aren’t great rentals.
So, my problem is:
- Great rentals in one suburb, but few good buys.
- Poor rentals in the city, but plenty of good buys.
Basically, my dillemna is, do I invest all my capital in rentals, or do I allow a mixture of buying rentals and properties to flip?
I was wondering how others here do it. I wanted to get some insight, before I lay out some 5-year plans.