globetrotter wrote:
Except that few people have the constitution to handle the headaches and stress. I am perfectly capable of following your plan above as I have financial and construction and RRE experience in Socal. If everyone could do it everyone WOULD be doing it. Reality proves that everyone is incapable of doing as you proscribe and in fact fewer than 1% of people can do it. It is an existence proof.
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Then there is the bullshit of having to either pay a prop man firm or deal with the headaches yourself and of course you are tied to a piece of property that you are responsible and liable for.
It's a herd mentality. When the RE market is bad, people are afraid to invest and hold on to their money. When it goes up, people start buying. The losers are those who buy at the peak and sell low. Only a small % of the buyers are willing to buy straw hats in winter.
I've been a landlord for 10 years and never managed any of my own properties. I don't deal with the tenant BS, my property manager does that. I travel abroad several times a year and just leave everything to my property managers. . I have good property managers in OC, LA, Temecula, and Vegas if anyone is interested.
J.Adama wrote:I always thought about buying a fourplex, renting out 3 units and living in the lowest unit. I dont know what %down is now, but 5% would have done it. Unfortunately I never had the income to qualify for a mortgage like that, and the property taxes in this state are absurd. So are the prices sellers want.
Maybe in TX.
CA has Prop 13 which limits property taxes to 1% base. In some areas you have to pay mello roose and HOA fees on top. In Texas the properties are cheaper, but the property tax rate around San Antonio TX is 2.5% to 2.9% I think. Fortunately they have no state income tax, so that off-sets the higher property taxes.
I've known people who bought 4-plex, live in one and rent out the other 3. All of them end up complaining about dealing with tenant bullsh*t. If you're going to buy an investment property, I'd recommend leaving the management to someone else. Leave a nice big gap (or wall) between you and the tenant. Let your manager deal with 10pm phone calls about backed-up toilets.
Start with something small and build up from there. IMO the RE market will be hosed for at least 2-3 more years, so you have time to save and shop. One rule: positive cash flow only. If the property doesn't make money, don't buy it.