[Onto]

(12-23-2014 10:08 AM)Killface Wrote:  

(12-23-2014 10:03 AM)Onto Wrote:  

(12-23-2014 09:58 AM)Killface Wrote:  

(12-23-2014 09:51 AM)Onto Wrote:  

(12-23-2014 09:34 AM)Killface Wrote:  

Dividend stocks are cool. They're totally passive unlike real estate, which is just 95% passive.

You're in for a rude awakening. Especially if you really have 30 units.

Possibly, but I have a property manager who I give wide discretion to. They have treated me well and I trust them so far. I also have a network of friends and various real estate people back home to take care of anything they couldn't take care of themselves, though I don't know what that would be. I usually answer an email once every 2-3 days, or if shit is hitting the fan I will spend 2-3 hours taking care of it...this happens maybe once a month. As the portfolio grows and the total revenue increases, I will give my manager even more discretion since my living expenses are fixed.

Having a property manager that takes care of everything is very expensive and you have to really check up on them to make sure they are doing quality work, and not skimming from you.

How are you paying them? Do they get a percentage of the rent and are supposed to foot the bill for all maintenance in return?

Is it just one big property with 30 units?

Who picks your tenants?

How long have you been in the rental business?

Yes, it's hard to find a good property manager. I tested these guys out for a couple years to see how they perform. It's not that expensive...8% of the rent collected each month. This can scale down to 5% if you have a big enough portfolio and can throw your weight around. I foot the bill for all maintenance, but they are nice enough to take care of simple crap for free. Changing locks, etc. It is a mix of duplexes and SFRs. My tenants are screened by the manager and their applications are sent to me for final approval (credit check and public records search as well as income verification and initial deposit). I have acquired all this property this year, but I did have a small one for several years beforehand that I self managed to learn the ropes.

That's a lot of buildings. I only have one and it's time consuming, though the building is large and a 100 years old.

Whatever your future ex-pat plans are you should carve out at least a 4-6 week stretch each year being back in the US to look over and tighten up your rental properties for the coming year. Figure out the expense of that and include it into your P&L to see if it's worth keeping those units vs putting it somewhere's else.

[VolandoVengoVolandoVoy]

Bullshit.

[VolandoVengoVolandoVoy]

LOL @ getting approved for 30 mortgages at the same time.
Dude has never rented a property in his own name, let alone bought one.

[TheFinalEpic]

If you picked up 30 units that are single family dwellings and town homes for 500k, please tell me what part of the country you are in. I will quit my job, buy a one way ticket, and live on the streets while putting 20% down on properties to rent out. My partners and I look at condos around 100k and rent for about 1.1k a month, leverage is a beautiful thing.

[Travesty]

(12-23-2014 01:08 AM)Killface Wrote:  

Deploy it in whatever real estate market at the time has the highest rent to price ratio while remaining in an acceptable metropolitan area, preferably close to you. Leverage your money by using conventional mortgages and hire a competent property manager for a 5-8% monthly fee so you have more time to keep pumping in money actively. You should easily be able to achieve 20-70% cash on cash returns depending on how risky you feel like being. Here are some markets to look at: Kansas City, Atlanta, indianapolis, Vegas, parts of Texas and Florida, Memphis or Detroit if you are really ballsy. You will not pay more than 50 times the estimated monthly rent for a property, and preferably less. This is known as the 2% rule (gross rent must be no less than 2% of purchase price). You can even buy shitty ones and fix them up, but all mine were ready to go. Expect to net about 1/3 to 1/4 of your gross rent on a leveraged property. I would suggest going with duplexes or more instead of single family houses. Over time, your mortgage remains static and your rents rise. Do not invest for appreciation of the value of the house...just buy and hold and use for cash flow. If you want to speculate, go to a casino. To get more than 4 mortgages you need 720+ credit so hope that's in good order.

Now you are dropping something. If the Roosh email turns real... things like this can be a full data sheet that is laid out more.

It takes maybe what? 1 hour to make a more detailed data sheet.

Converting liquid funds into cashflow rental properties would be a big value here and going into greater details about property managers and personal stories about having a real estate portfolio like that.

(12-23-2014 10:08 AM)Killface Wrote:  

Yes, it's hard to find a good property manager. I tested these guys out for a couple years to see how they perform. It's not that expensive...8% of the rent collected each month. This can scale down to 5% if you have a big enough portfolio and can throw your weight around. I foot the bill for all maintenance, but they are nice enough to take care of simple crap for free. Changing locks, etc. It is a mix of duplexes and SFRs. My tenants are screened by the manager and their applications are sent to me for final approval (credit check and public records search as well as income verification and initial deposit). I have acquired all this property this year, but I did have a small one for several years beforehand that I self managed to learn the ropes.

Further details in a data sheet on what makes a good property manager etc... also very useful.

[Onto]

(12-23-2014 01:08 AM)Killface Wrote:  

You will not pay more than 50 times the estimated monthly rent for a property, and preferably less. This is known as the 2% rule (gross rent must be no less than 2% of purchase price). You can even buy shitty ones and fix them up, but all mine were ready to go.

I wouldn't follow that rule myself. For example, many properties I know of would sell for $300k in a heartbeat with a monthly gross of $4k per month. That's 1.3% and the property had better be in good shape.

You have to take property taxes, maintenance, and insurance and vacancies into account. Taxes can vary widely by location and the number of units in a building.

Most real estate investors are happy to get what is called a 10% capitalization rate and use that model. Many people are happy with a 7-8% return.

Attached is an example of how to determine what a property is worth, assuming it doesn't need any major work. Depending on the property, the maintenance value used in this example is quite low. My property insurance is about double what's in this example.

If you can buy a house in a good area that will appreciate over time then you will gain on that too.

[Killface]

(12-23-2014 12:26 PM)VolandoVengoVolandoVoy Wrote:  

LOL @ getting approved for 30 mortgages at the same time.
Dude has never rented a property in his own name, let alone bought one.

I have 7 mortgages. The rest were cash purchases. I also did not say 30 buildings, I said 30 units, which in real estate terminology basically means half of a duplex, a third of a triplex, or an entire single family house, etc.

You can also get approved for multiple mortgages simultaneously as long as you qualify based on reserves, DTI, and credit score.

[jake1720]

You can live in almost every city in the US comfortably for 5-7k. If I could have 5k guaranteed for the rest of my life I would be set.

[Kamikaze]

(12-22-2014 10:25 PM)Killface Wrote:  

$9/hour job... $500k after taxes ... rental real estate ... reduced bodyfat from 20%+ to 8% ... $200k/yr job in the oilfield with no experience.

[Killface]

Onto, I would consider 1% the absolute floor, and that is for a property in amazing shape in an area that is going to appreciate like crazy. Most of mine are in working class or lower middle class areas...not slums but not places I would be happy living. I have a couple in the 1.5% range and these are in desirable parts of town, so appreciation will be strong, while it will be nonexistent on the others. I do not buy for depreciation though, as it is deferred and uncertain. I consider it speculation. I buy for cashflow only. My mentality may shift when cashflow gets to the point where I can't spend it.

Your breakdown needs about 15% for vacancies and maintenance. I also do not pay for water or lawn care...the tenants take care of that...it's in their leases. Insurance looks good. Taxes look insane. I know this varies widely by geographic region, but on a $250k property here I would be paying probably a maximum of $3000/year. If you are not going to self manage, add 8% for property management, or probably 10% if you only have 1 property since that's more burdensome for the manager.

[Killface]

(12-23-2014 12:31 PM)TheFinalEpic Wrote:  

If you picked up 30 units that are single family dwellings and town homes for 500k, please tell me what part of the country you are in. I will quit my job, buy a one way ticket, and live on the streets while putting 20% down on properties to rent out. My partners and I look at condos around 100k and rent for about 1.1k a month, leverage is a beautiful thing.

Any of the areas I listed earlier will do. In some of them you can still find these deals on the MLS. In others, you need to network with wholesalers or turnkey companies. You can find bazillions of them on biggerpockets.com . I'm to the point where I get most of mine from my property manager now. They'll have clients wanting to sell some of their rentals, sometimes to free up cash to get something bigger, or sometimes because it has shitty tenants and is bleeding money. If their client sells to an outside investor, they lose the monthly management fee, so it's in their interest to let me know about the property so I can buy it and they can keep managing it. Usually all it takes to fix an unprofitable property is a new tenant.

You will need 25% for multifamily. You will need 25% for SFR and 30% for multifamily on mortgage 5 and above. Any commercial/private/portfolio money deal will require at least 30% as well.

Cheers to leverage.

I stay away from condos, personally. I don't like the HOA fee...it eats into profits enormously. They work for some people, it's just not in my skillset.

[Killface]

(12-23-2014 02:35 PM)Travesty444 Wrote:  

(12-23-2014 01:08 AM)Killface Wrote:  

Deploy it in whatever real estate market at the time has the highest rent to price ratio while remaining in an acceptable metropolitan area, preferably close to you. Leverage your money by using conventional mortgages and hire a competent property manager for a 5-8% monthly fee so you have more time to keep pumping in money actively. You should easily be able to achieve 20-70% cash on cash returns depending on how risky you feel like being. Here are some markets to look at: Kansas City, Atlanta, indianapolis, Vegas, parts of Texas and Florida, Memphis or Detroit if you are really ballsy. You will not pay more than 50 times the estimated monthly rent for a property, and preferably less. This is known as the 2% rule (gross rent must be no less than 2% of purchase price). You can even buy shitty ones and fix them up, but all mine were ready to go. Expect to net about 1/3 to 1/4 of your gross rent on a leveraged property. I would suggest going with duplexes or more instead of single family houses. Over time, your mortgage remains static and your rents rise. Do not invest for appreciation of the value of the house...just buy and hold and use for cash flow. If you want to speculate, go to a casino. To get more than 4 mortgages you need 720+ credit so hope that's in good order.

Now you are dropping something. If the Roosh email turns real... things like this can be a full data sheet that is laid out more.

It takes maybe what? 1 hour to make a more detailed data sheet.

Converting liquid funds into cashflow rental properties would be a big value here and going into greater details about property managers and personal stories about having a real estate portfolio like that.

(12-23-2014 10:08 AM)Killface Wrote:  

Yes, it's hard to find a good property manager. I tested these guys out for a couple years to see how they perform. It's not that expensive...8% of the rent collected each month. This can scale down to 5% if you have a big enough portfolio and can throw your weight around. I foot the bill for all maintenance, but they are nice enough to take care of simple crap for free. Changing locks, etc. It is a mix of duplexes and SFRs. My tenants are screened by the manager and their applications are sent to me for final approval (credit check and public records search as well as income verification and initial deposit). I have acquired all this property this year, but I did have a small one for several years beforehand that I self managed to learn the ropes.

Further details in a data sheet on what makes a good property manager etc... also very useful.

Hah, yeah I have some pretty crazy stories. Like the time I bought a property from a guy whose current tenants turned out to be 16 years old...ever try to evict a minor? It was interesting!

[Killface]

Back on the original topic though...

These 150k-175k figures "sound" good...

But I am still trying to figure out what an actual budget on that income would look like for someone who doesn't have a job.

A nice apartment in a top flight American/developed world city would be what, $1500-2000 per month max? Single bedroom. Obviously if you're not trying to live in NYC, just a nice city like, say, Denver, reduce that to $1000. And if you're looking internationally that will come down alot. And that's if I decide to move out of the RV, which I currently enjoy. It's free.

On to food...you can certainly shop at Aldi or Costco and buy chicken/rice/eggs for $300 a month or less. However, I really like food and I like to hit about 200g of protein per day...I would also prefer to buy game meat or organic stuff if possible. So let's say $600 to be eating really well.

Car...not interested. I would prefer to live in a city where it is not necessary, but if it is, I would just drop $10k on a used M3 or something and call it a day.

No consumer debt, so no debt payments going out.

So the rest of the fixed expenses would go to little stuff. MMA lessons, gym membership, cable TV if that's your thing, internet, some gas expense if you have a car or a train pass if not...this stuff can't possibly total more than $1000 per month.

So we're at $3600 per month at maximum right now, in a decent place in a world class, expensive city.

Let's save and invest half of the ~$12k per month to keep it growing, which will put us into stupidly high income brackets later in life.

So we have $2400/mo for bullshit. Festivals, concerts, nights out, performances, trips. That's approximately $600 a week. And if you really feel like splurging, fuck it, take 1 or 2 thousand away from the savings one month.

Does this sound about right? I am tired and may be forgetting some stuff, and I also am not accustomed to living in a large city.

[Travesty]

I would want $1k alone a month in airplane tickets and travelling costs so I feel like I always have options to get up and go without waiting for the best travel deals etc...

[kr4t0s]

(12-23-2014 04:22 PM)Killface Wrote:  

A nice apartment in a top flight American/developed world city would be what, $1500-2000 per month max? Single bedroom. Obviously if you're not trying to live in NYC, just a nice city like, say, Denver, reduce that to $1000. And if you're looking internationally that will come down alot. And that's if I decide to move out of the RV, which I currently enjoy. It's free.

It's pretty clear you have never been to NYC....

[heavy]

I got this far...

Quote:

1. Took a $9/hour job (security, so I could work on side projects or sleep) on top of my office slave job, effectively working 24 hours per day to fund an online affiliate marketing business.

2. Managed to crack the code, found a winning campaign, and banked about $500k...

...before I got really skeptical and/or felt this didn't apply to me. Maybe it's real, but I don't feel like taking that leap of faith.

[Onto]

(12-23-2014 04:02 PM)Killface Wrote:  

Onto, I would consider 1% the absolute floor, and that is for a property in amazing shape in an area that is going to appreciate like crazy. Most of mine are in working class or lower middle class areas...not slums but not places I would be happy living. I have a couple in the 1.5% range and these are in desirable parts of town, so appreciation will be strong, while it will be nonexistent on the others. I do not buy for depreciation though, as it is deferred and uncertain. I consider it speculation. I buy for cashflow only. My mentality may shift when cashflow gets to the point where I can't spend it.

Your breakdown needs about 15% for vacancies and maintenance. I also do not pay for water or lawn care...the tenants take care of that...it's in their leases. Insurance looks good. Taxes look insane. I know this varies widely by geographic region, but on a $250k property here I would be paying probably a maximum of $3000/year. If you are not going to self manage, add 8% for property management, or probably 10% if you only have 1 property since that's more burdensome for the manager.

Give me an address in the United States where the taxes on a $250k investment property with land are about $3,000. Any address of a property currently in the MLS will do.

I would not let the tenants be responsible for landscaping. In my experience, they won't do it very often if at all, and your property will look like shit and affect the value of the neighborhood, but it sounds like the kind of property you're buying the neighborhoods can't get any lower or there is no yard/bushes anyways

[VolandoVengoVolandoVoy]

This guy is full of shit and trolling for attention. Don't feed the troll.
He is basically cut and pasting the crapola they try and sell to people in the get rich quick info scam real estate investor courses.
Although he really hits all his bases. He adds in a MLM scam, dramatic weight loss, and travel!!!! in less than a year!!! by an ordinary guy who was making 9 bucks an hour!!! and you can do it too!!!
Gentleman, Tim Ferriss has joined RVF.

[Killface]

I have never taken a "real estate investor course." I assume you mean the bullshit event they lampoon in Pain & Gain? Robert Kiyosaki shit?

Did not mention any sort of MLM. I know people who were successful with that stuff but it turns my stomach.

Splitting hairs here, but weight is actually greater, as the FAT loss was coupled with muscle gain. This is possible if you don't half ass it by "dieting" but also drinking 5 nights a week like I know a lot of my fellow 20 something males do...be honest.

Travel...I already said it was just the US and nothing exotic.

I think you are attacking a character you're creating.

Also I am not looking for attention, since this is the crap I have to wade through whenever I open up, but simply seeking an opinion about passive income.

[WestIndianArchie]

redacted

[samsamsam]

(12-23-2014 05:27 PM)Killface Wrote:  

Also I am not looking for attention, since this is the crap I have to wade through whenever I open up, but simply seeking an opinion about passive income.

Just curious where else have you shared this and what feedback did they have? Just curious thanks. Links would be appreciated, if possible.

[Killface]

I appreciate your answer. It looks like NYC is probably out. 360k a year passive would just take too long. I could jump ship at 150k and if the savings rate is good, I could be at 360k 15 or so years later while enjoying life in the meantime. Especially if most of that time is spent overseas, so expenses are low. Then again, do I really need NYC to be happy? It doesn't even seem like my kind of place, but the thought of having the option is nice. I would say at those numbers, NYC is just way too far to the right of the effort/gain curve. The focus on status/money I always hear about associated with the place is totally at odds with the mentality of a guy who loves living in an RV.

[Killface]

Sam, if you have a specific question about how to do this or something like that, I would be happy to answer it.

[Killface]

I forgot to answer a few earlier questions.

Dumbfrombirth, I basically hated my life and was contemplating suicide, so instead I went balls to the wall because I felt I couldn't get any lower. I make it sound like I was a heroin addict or something awful, lol. I was an office drone making shit money, though I had the trappings of success like degrees and a house and other things that make people "respectable." This was the worst way to live, believe it or not.

I have not listened to Tony Robbins etc but have heard good things.

Speakeasy, I would not recommend affiliate marketing because you are at the mercy of too many people. Advertisers, networks, traffic sources...you're everyone's bitch and if there is any hiccup anywhere along the line it's over. The really profitable guys are doing cloaking/shady/blackhat stuff and I do not know how to do that shit, nor would I. Not for any moral reason but for business relationships. MJ Demarco touches on it in millionaire fastlane, which seems to be pretty popular here.

[Duke Castile]

I think there are ways to express skepticism without being downright assholes. He's right though, you guys are jumping all over him like feminists that don't hear something that fits their worldview. Right now I think what he's saying is possible.