haha, can one get super rich by investing RE? the answer is NO, there is only one Donal Trump, but can an average person be financially free by investing RE? the answer is difinitely yes.
compare to most people, I am not a smart person, I don't have an post graduate degree, just a average guy can easily get lost in mountain people mountain sea. but I can happily say, I am near the point of financial freedom, and for that, I think I am way better off than 95% of the people, will I get to 1%? maybe not, my goal is only 10 mil.
there is no secrets in RE investments, time consistency and scale. I believe scale is very important, it can further reduce per unit overhead, lower average management cost, increase occupancy rate, and achieve better cash flow.
today, I hold a porfolio of 9+ mil, own and manage 134 units, with 50% leverage rate, 3 full time workers, life so far, is beautiful.
I had been involve with RE since I got out of college, it is by far the best tool to accumulate wealth that I know.
My profession by trade is ex-day trader(10 years, did make some and did lose a lot, thanks to Amzon, Lu, Exds and some others), now Fulltime Super DAD( don't pay alot but the fun is priceless ), small business owner(pays good but getting up at 9 is hardest part), part time bill collector(goto court once a week minimum go after deadbeat tenants), and the rest of my spare time, RE.
I involve with many phase of RE, from land development to construction to we all know what - LandLord, Landlording is not the easiest task, most Landlord give up after a few units, because the time and money they had to spend on it, what they don't know is there is light at the end of the tunnel, the more unit you have, less headache you have because you can then hire out, basically yes, economic of scales.
Leverage is the a important tool, but it is also the biggest barrier, Fanny Mae used to limited 10 mortgage per SS#, and now I think they lower that to 4 mortgage, so we have to do some creative financing, there got to be 100s of book on this subject, you just have to learn it and convince people and make it work for you. I am not talking about unlimited leverage, I am talking about controlled leverage, a leverage you must comfortable with, off my 7.4 mil portfolio, I personally invested less than 100k in it, the rest of money are from refi, rehab, land sale and flipping.
1. my avg per unit value at apartments 50k, duplex to 4plex at 75k, SFH range from 80k to 200k. My cost are much less than that, because more than half of them are once bank own REO, I buy them less than 50% on market value, rehab then refi at 75% and I pocket the cash. (I know, this is sub-sub-prime, and this is how the banks lose all the money)
2. my avg mortgage is less than 40k per unit, but I carry a higher interest rate ( mostly at 6.75 but some are as high as 7.875 ), to me, even 10% is cheap money if there is money to be make.
3. Property tax rate is 1.6% (120/7400), yes
4. Monthly rent avg $550 - close, some 1 bedroom unit low as $375, some SFH is high is $1750.
5. my area has a few world class orthopedic company around, so the avg appreciation is better than other area in Indiana, house under $150k still appreciated 10% last year, while overall market here is 3% to 5%. so cheaper houses has its own advantages.
6. my avg net profit per unit is about $100 per month.
thanks everyone for reading
compare to most people, I am not a smart person, I don't have an post graduate degree, just a average guy can easily get lost in mountain people mountain sea. but I can happily say, I am near the point of financial freedom, and for that, I think I am way better off than 95% of the people, will I get to 1%? maybe not, my goal is only 10 mil.
there is no secrets in RE investments, time consistency and scale. I believe scale is very important, it can further reduce per unit overhead, lower average management cost, increase occupancy rate, and achieve better cash flow.
today, I hold a porfolio of 9+ mil, own and manage 134 units, with 50% leverage rate, 3 full time workers, life so far, is beautiful.
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My profession by trade is ex-day trader(10 years, did make some and did lose a lot, thanks to Amzon, Lu, Exds and some others), now Fulltime Super DAD( don't pay alot but the fun is priceless ), small business owner(pays good but getting up at 9 is hardest part), part time bill collector(goto court once a week minimum go after deadbeat tenants), and the rest of my spare time, RE.
I involve with many phase of RE, from land development to construction to we all know what - LandLord, Landlording is not the easiest task, most Landlord give up after a few units, because the time and money they had to spend on it, what they don't know is there is light at the end of the tunnel, the more unit you have, less headache you have because you can then hire out, basically yes, economic of scales.
Leverage is the a important tool, but it is also the biggest barrier, Fanny Mae used to limited 10 mortgage per SS#, and now I think they lower that to 4 mortgage, so we have to do some creative financing, there got to be 100s of book on this subject, you just have to learn it and convince people and make it work for you. I am not talking about unlimited leverage, I am talking about controlled leverage, a leverage you must comfortable with, off my 7.4 mil portfolio, I personally invested less than 100k in it, the rest of money are from refi, rehab, land sale and flipping.
1. my avg per unit value at apartments 50k, duplex to 4plex at 75k, SFH range from 80k to 200k. My cost are much less than that, because more than half of them are once bank own REO, I buy them less than 50% on market value, rehab then refi at 75% and I pocket the cash. (I know, this is sub-sub-prime, and this is how the banks lose all the money)
2. my avg mortgage is less than 40k per unit, but I carry a higher interest rate ( mostly at 6.75 but some are as high as 7.875 ), to me, even 10% is cheap money if there is money to be make.
3. Property tax rate is 1.6% (120/7400), yes
4. Monthly rent avg $550 - close, some 1 bedroom unit low as $375, some SFH is high is $1750.
5. my area has a few world class orthopedic company around, so the avg appreciation is better than other area in Indiana, house under $150k still appreciated 10% last year, while overall market here is 3% to 5%. so cheaper houses has its own advantages.
6. my avg net profit per unit is about $100 per month.
thanks everyone for reading
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