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Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by Lovehound
You're saying that $150K is 20% down? Your houses cost $750K???
If so, my advice is either get into another line of work or get into another geographic location for your business.
I'm putting 25% down on $225K houses and getting about $1400-$1500/month. 4.75% APR
The topic is about investing $150K. Who would spend the whole wad on one house?
I have no problem living in a $700k house, especially since I only paid $190k in 1993. My point is simply that $150k does not go very far as real estate investment money in some area. Even for a beat-up neglected foreclosure, if you can find one, flippers are paying $400-500k.
$250K bought me four fine rentals in Phoenix. In very nice neighborhoods.
Define some area. My definition of some area is an area where you can buy nice relatively new ('95-'00) properties 3BR 2BA nice master bedroom suite, open plan, kitchen appliances, pool, low fix-up ($2K-$3K) in a thriving nice PUD/HOA and rent it out in average 1-2 weeks.
My average $63K including closing and fixing costs bought me a very nice retirement income.
$250K bought me four fine rentals in Phoenix. In very nice neighborhoods.
Define some area. My definition of some area is an area where you can buy nice relatively new ('95-'00) properties 3BR 2BA nice master bedroom suite, open plan, kitchen appliances, pool, low fix-up ($2K-$3K) in a thriving nice PUD/HOA and rent it out in average 1-2 weeks.
My average $63K including closing and fixing costs bought me a very nice retirement income.
Lovehound, let's be clear to thevOP about what you bought. Don't you also have 70% mortgages on those rentals?
I always put down 25% on my rentals. I don't know why. The number popped into my head, it works for me, so I stuck with it. It shows my mortgage company that I am serious about keeping and maintaining my properties.
You're saying that $150K is 20% down? Your houses cost $750K???
If so, my advice is either get into another line of work or get into another geographic location for your business.
I'm putting 25% down on $225K houses and getting about $1400-$1500/month. 4.75% APR
The topic is about investing $150K. Who would spend the whole wad on one house?
Thats crazy in my part of the country I go by the 2% rule if I have 50K into a house I need to rent it for 1K a month. I have bought 5 in the last 2 years that I have been able to do that with the last one 45K 4-5 for clean up and it rents for 1100 a month.
Would you try for 2 houses 75K each
One that was entire amount?
Or several that were 15k or so?
In my part of the country you could pay cash for 3 houses and pull in 3K a month. In rounds numbers if you did not use that money for any expenses (like I did) for fixing and insurance and taxes. in just over a year you could by a 4th house and now you buy a house every year and so on. I am now able to live and buy a new rental every 2 months cash.
It really depends. If you are looking for appreciation in addition to cashflow and principal paydown, etc. then it makes sense to buy more expensive houses. They generally appreciate faster and hold their value better, while low end houses (such as Ohio, where you can buy a house for 10K) barely appreciate at all. Actually I think they lose value, lol.
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