[quote=bearishgurl]
Ren, you were talking about purchasing several investment properties with mortgages to eventually pay off your residence, vehicles, children’s education and retirement. Since you will supposedly never sell them, you won’t be able to get the kind of cash flow you’re thinking of to do all of these things, IMHO.
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I wouldn’t buy a property unless I’ve done the necessary research and math. The right properties, with the right amount down, DO cash flow very well, and well beyond expenses. I’m not going to do the math for you, but I assure you I haven’t forgotten some aspect that will later result in a face palm. I’m smarter than that.
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And if you DO sell properties in those areas you mentioned even after holding them for 15+ years, you may or may not make a profit. A typical profit from sale of residential RE in those states isn’t what it is here …. and buying in “better” areas is more expensive. And you won’t be able to buy as many properties in “better areas” (to attract your “better tenant”) as you could in mostly rental areas.
Of course, you “know all this” and have already figured everything out.
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No. Unlike you, I don’t know everything – but I do have YOU figured out.
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There are GOOD REASONS why residential RE is so much cheaper to buy and also rent in AZ, FL and even RIV County than it is in SD County. If one is thinking investing in rental properties out of state and doesn’t understand the fundamental reasons why the RE sales/rental markets are as they are in those states, then they don’t understand these markets well enough to invest in them, IMHO.
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There you go again, humbly assuming I’m blissfully ignorant. Markets in AZ and FL are priced appropriately for the location, number of units, and employment ($120k for 2,000sf which rents for $1,100-1,200, for example). Because you know everything, you know that there’s more risk AND better cash flow in those areas. I believe I can mitigate that risk through careful choices, as have many others before me.
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I also don’t think it’s that easy for an inexperienced investor (even with good credit) to get repeated non-owner occupied mortgages … at acceptable terms, anyway.
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Then you thought wrong. I’ve talked to several lenders, a few financial advisors, and our CPA about it. All my calculations assume 75% of rent counted as income, seasoned for one year (one property purchased per year, even though we can afford more). Slightly higher rates are expected. Requirements and rates will change beyond 5 properties, then again beyond 10. Taking this into account, we’ll pay off many of them early, just prior to retirement. Considering LLC, but there are good reasons not to. Again, not ignorant here.
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I’ve never had any problems here telling it like it is.[/quote]
But you’re not telling it like it is. You’re ignoring the enormous number of people who have been successful at rental investments, including those I know personally who did so in a variety of markets over the past 40 years. So they all just got lucky, and there’s no level of intelligence, knowledge, or income available that can give an advantage? That’s essentially what you’re saying, right? It’s a good thing we have you here to stop us from trying.
