Opinions - If you were buying investment property. . .

[khuntrevor]

good points. I read that 40% of curb appeal is derived from the roof. Might be a good place to spend some extra Dollars.

[swbell6]

Originally Posted by oldtrader

As someone that from 1972 till I retired not long ago, that spent their full time as a commercial real estate broker let me give you a few guidelines. I have bought, sold and managed a lot of single family homes, and apartments.

Give me the answers to following question, and I can give you a lot more help.

Take the projected income, and deduct: A--All expenses. B--Taxes and insurance. C--Deduct 5% to 10% for possible vacancy (especially when using a management firm). D--Mortgage payment (PI). E--Set aside 10% of income for future repairs and replacement and sprucing up before resale in the future. This is the one place a lot of investors get caught when these expenses come up and they will, and they have not set aside money to cover them. Do it so you do not set yourself up to have to take food off the table to cover these inevitable costs.

THE QUESTION: After deducting all of these, which investment gives you a positive cash flow. You will find some of the investments you look at will be taking money out of your pocket each month and others can have a positive cash flow. You want a positive cash flow, which depending on your needs may only be a small one, but it is positive.

Buying one home or four as you are considering should be evaluated this way. You may find 2, 3, or 4 homes will give you the safest positive cash flow investment.

Great advice - I would also urge you to consider a multi-family property, either a duplex or triplex. They're a little harder to find, especially if you're looking for a quality foreclosed property. BUT, we just bought a duplex and the projected income is double the mortgage, taxes, etc. We're putting a lot of sweat equity into it (landscaping, new kitchen and bath) and expect to hang on to it for awhile.

Good luck.

[Captain Bill]

Your initial cost of buying 4 $50k homes is going to be higher. You have the costs of obtaining 4 mortgages plus the escrow and title insurance costs of each.

However, you will have more gross rental income. OldTrader gave good advice on determining the Net income and cash flow.

I own a condo in a Mesa complex and am negotiating for another one. The condo prices have taken a beating, and my feeling is that they will come back some day. It's possible that you can get a decent cash flow from one of them.

Personally, I would not buy 4 $50k single family homes because they would probably be in an area that I don't want to be in, and you have the exterior maintenance. I would prefer to buy either three condo's in a complex, or two $100k single family homes in Gilbert or east Mesa because I believe the price appreciation over time will be greater.

Buying condo's has an advantage. The association takes care of the external maintenance. All you have to do is rent it and maintain the interior and you can do that yourself, without hiring a property management company.

It is not difficult. Find a good handyman that you can send over for internal unit issues. Read the landlord/tenant act, get some AAR lease forms. Get the Tenant Rights Handbook, and learn how to do the initial credit checks. Follow the guidelines in a strict manner and you won't have trouble with tenants.

I suggest to not use Craigs List and try to rent it yourself. That can be dangerous. Have a Realtor list the Rentals, or use a property management company. It will cost you maybe $700 but will take the stress out of showing it yourself.

Do a lot of research, and even if you use a property management company, you should study the landlord tenant laws.

[mdtscoates]

Don't buy one for $200k. Also depends on your long-term strategy, probably the 2 at $100k would be your best bet. you can buy in better areas and you would probably cash flow