| Author | Message | ||
| Robin Overcash (Robin)
Member Username: Robin Post Number: 299 Registered: 1-2003 |
Whoa! That's some weird stuff Telson.. Oddly enough, I rented a house a few years ago in which one of the previous occupants committed suicide in the house. It had brand new carpet, which made me wonder if he/she left a mess. I didn't get a break on rent though.. hmph. The topic of vacation condo rentals is one I need to look into though. It seems like you can rent beach properties for about as much per week as a monthly mortgage payment would be. It could be paid off pretty quickly so that it turns into pure cashflow.. I'm sure I'm missing a few BIG details here since this sounds too easy. Anyone have experience in this realm? -R | ||
| Telson (Pitbull_trader)
Junior Member Username: Pitbull_trader Post Number: 175 Registered: 8-2003 |
Jim, you might have to dish out for some specialized training first:  "Money.Cnn.com Real estate's scary side Three beds, two baths, one ghost. A haunting tale. October 23, 2003: 4:43 PM EDT By Les Christie, CNN/Money Contributing Writer New York (CNN/Money) - Any number of physical factors can complicate the sale of a home: shoddy upkeep, irreparable structural decay, proximity to a toxic waste site. But one kind of property that causes real nightmares is a house that carries a supernatural stigma. "Psychologically impacted" houses -- in which a murder, suicide, or illness took place -- are a tough sale. The reason: fear of ghosts. Two business professors at Wright State University, James Larsen and Joseph Coleman, studied more than 100 psychologically impacted houses. They found that they take 50 percent longer than comparable homes to sell, and price at an average of 2.4 percent less. Many buyers simply won't buy a house that might contain a ghost. Larsen says one broker told him about showing a couple a home where a murder had taken place. "The broker was walking ahead of them about thirty feet into the house when he started telling them about the murder," Larsen says. "When the broker turned around, the couple had disappeared." House BOO-tiful Joe Nickell, a self-described ghostbuster, says he's investigated scores of hauntings over the past 30 years without ever coming face to sheet with a ghost. Nevertheless, he agrees that supernatural notoriety nearly always lowers a home's selling price. The best-known example of a haunted house, says Nickell, is the one made famous in "Amityville Horror," a book by Jay Anson that became a popular movie. The six-bedroom house on Long Island's south shore was the scene of a grisly quadruple murder in the early 1970s. It was bought by the Lutz family in late 1975 for the bargain price of $80,000. The Lutzes lasted less than a month before spirits creeped them out. They left, but managed to cash in by collaborating on the book and movies, describing weird tales of cloven-hoofed footprints in snow, poltergeists, green slime, and more. Meanwhile, another couple, the Cromartys, moved in, then unaware of the stories circulated by the Lutzes, and they experienced no supernatural phenomena. Even so, the publicity brought a flood of curiosity seekers, dubbed "the Amityville horribles" by locals. These intruders, far more annoying than any phantom, rang the Cromartys' doorbell, wandered through their yard, and wouldn't leave. The Cromartys sued the Luztes, saying that their claims had resulted in sightseers destroying their privacy, and won a settlement. Exorcising at home Three years ago, a woman who wishes to remain anonymous bought a Napa Valley home for $125,000 and says she began noticing strange occurrences. She claims to have heard "growling, breathing, conversation in the living room that disappeared when you went in -- doors would open and close and things would knock around." The spooked homeowner attributes this to the previous occupant's teenage son who evidently had been experimenting with Satanism. When she tried to sell the home recently, it sat on the market for months, even as other houses in the area sold at higher prices. People would look, but they wouldn't buy. For help, she turned to Phantasm PSI, a psychic research organization that aims to help people plagued by apparitions. Phantasm's Dave Considine claims he rid the house of its demon by performing a suffumagation. "I went through each room, cleansing them with fumes of frankincense, myrrh, and other incenses." The property sold shortly afterward for $185,000. Some skeptical appraisers Not every expert agrees that a haunting lowers home values. Californian Randall Bell, is an appraiser sometimes called the "master of disaster," because he specializes in diminution-in-value issues (he consulted on the Nicole Brown Simpson house appraisal). Bell says a gruesome, well publicized murder generally lowers a selling price by 15 to 35 percent. But a ghost can even be a selling point. One haunted house in Las Vegas, Bell reports, sold several times at a premium to people looking forward to hosting phantoms. "The people who moved in were always disappointed," he says. Ghosts never appeared. Barry Lebow, Toronto-based author of "Selling the Haunted House, or the Impact of Stigma on Market Value," says that ghosts have the biggest impact on prices during down markets and in small towns where turnover is slow. "I myself had a house where there was a murder," says Lebow. When all else fails, according to Lebow, owners of small-town haunted houses have one sure way of getting rid of their house: "Sell it to someone from the city." http://money.cnn.com/2003/10/21/pf/ yourhome/househaunting/ ;-) Best, | ||
| Jim Schad (Jim_schad)
Intermediate Member Username: Jim_schad Post Number: 2025 Registered: 7-2002 |
True,I was thinking of buying 3 or 4 of them with plans for maybe 10. i dont plan to be the mgr per se, but rather a very involved owner. I dont mind something taking my time if it pays, but I can't have 1 property that pays me $500 a month taking up too much time. Agreed there are other things to put money in that return better so trying to evaluate my options. Thanks again. | ||
| Patrick (Patrick)
New member Username: Patrick Post Number: 36 Registered: 6-2003 |
Perhaps someone with a franchised business could chime in, but personally I'll stay away from them at least for the mean time. I could do many more things with my money that plunk down $50-100-200k+ just to buy a job as a manager. I mean sure, you could buy into some franchises and make some good $$$ but I think it all boils down to who manages the thing. You can't realistically expect to just have one and cash the checks monthly without problems. | ||
| Jim Schad (Jim_schad)
Intermediate Member Username: Jim_schad Post Number: 2024 Registered: 7-2002 |
another thing I am considering are some hair care franchises www.sportclips.com Pretty cool concept and fairly easy to run, but they don't make a ton of cash. Maybe $275K a year gross then between $20K to $70K depending on the store and debt load etc. Take about $50K each to get in then borrow the other ~$100K. Only issues I really have are I am going to have employees of course and in the end I really don't own anything. Sure I can sell the biz, but say it totally bombed I don't have anything to liquidate such as real property...just a leased spot with TV's and chairs. | ||
| Patrick (Patrick)
New member Username: Patrick Post Number: 35 Registered: 6-2003 |
Well, if your market is stale, you could use that as an advantage when you're purchasing. Highlight that point to the sellers and you might be able to secure a better purchase price. Remember what everyone tells you... don't look for a property, look for a motivated seller. ;) If you're not interested in the day-to-day activities of being a landlord, then you could try to charge slightly below-average rents to find tenants that won't bug you as much. They'll probably figure that if you're giving them a good rate, why should they call you about minor issues. This should also help deter vacancies. Or, you could add something to their lease which states that they take care of any repairs under $25, if your state allows it. As far as the vacancies go, just keep a list going of potential renters whenever you have a vacancy so that in the future you have something to fall back on. | ||
| Jim Schad (Jim_schad)
Intermediate Member Username: Jim_schad Post Number: 2023 Registered: 7-2002 |
Thanks! Yeah I do Lonnie deals and they are starting to wear on me with turnover etc. Still not a bad deal though just more hands on than I was hoping for. Here is my dilema. Just for example: I found a 8 unit complex south of Dallas...I live in North Dallas. Not big enough or make enough money for a on site mgr so that means me going there to do whatever..maintenance, collect rent, fix stuff, show vacant apartments etc. So maybe the location is a hinderance, but things more in town suddenly get more expensive as the area gets nicer of course. I don't really want to self run a bunch of duplexes. I will do that to get going, but in 15 years I don't want to be fixing toilets per se. I was also thinking that a place with 10 units is less affected by 1 vacancy than a duplex that is half empty or a SFR that is vacant for 2 months. Real estate is "down" somewhat in Dallas now or at least stale and not going through the roof so maybe a good time to buy, but also there are tons of FOR RENT signs so hate to buy an prop and then have it sit with high vacancy or empty. I can't afford that. | ||
| Patrick (Patrick)
New member Username: Patrick Post Number: 34 Registered: 6-2003 |
Hi Jim. I don't know the market in your area, but I could give you some info about mine. I'll go down your list of stuff and answer what I can... "if you had access to cash to buy whatever you wanted what would it be? I am interested in apartments at this time, but I dont want to bite off more than I can handle." I'd go for 11-15 unit apartment buildings in my area because they are still relatively cheap and can cash flow in certain areas. 16+ unit buildings around here require an on-site property manager. "Would you start with duplexes and progress up or start with a 4-plex or 8-plex etc? I would ultimately like to end up with a several hundred unit complex, but right now that is over my head in both cash requirements, manpower and knowledge." If you'd like, it would be easy to purchase a 4-plex since that would still be technically residential and you could easily get a loan on it. 5+ would be commercial which have different requirements. "I also know a guy who is buying small strip centers. I don't know the first thing about renting to retail clients or how to attract them etc. Current vacancy rates scare me. Any opinions on that?" Commercial centers are a whole different animal, and you should approach those after you've dealt with residential properties first considering you'd be mostly dealing with professionals and investors who have been doing this for quite some time. If you'd like to go this route though, try looking for triple net (NNN) leases. Companies such as Walgreens have these for their locations. They provide a solid income, as long as you choose the tenant wisely. "Was also told that small warehouse type properties are good. Suggestions? Lastly, what about self storage units?" If you were to look at self storage units, figure out what it takes to start them. If the barrier to entry of your market is simple, then I wouldn't do it if anyone with $$$ could. Also, you would be buying a job, not an investment. Figure on 24/7 involvement. "Looking for as few headaches as possible, as few employees as possible, high occupancy and good cashflow. I've been doing stuff with mobile homes, but the clientele is beating me down at this point. Thougth about buying a whole MH park, but just not just I want to go down that road." I've looked at mobile homes but I just think that it's not very productive as the type of people you would be dealing with is very unpredictable. The only thing I'd be interested in would be Lonnie deals where I'd be the bank. ;) You're doing that, right? Also... "anyone willing to disclose financial info on condos? how much total cost? How much down? how much financed? Rent generated? Cost of mgt company? Maint fees? ROI on invested money?" My girlfriend just purchased a condo and in Southern CA, they are appreciating at about the same rate as single family homes. If you were to purchase them though, you wouldn't cash flow because of the HOA fees. In her case, it's 1/3 of her monthly mortgage payment, which is just crazy. She did get a great deal on the purchase but it's just not worthwhile to purchase condos to rent them out. Let me give you an example: A condo was just listed at: 5403 NEWCASTLE ST #3 Encino, CA 91316 for $89.5k It's a studio unit and that price is very competitive. HOA fees monthly on that unit are $190 though. See what I mean? ;) Anyhow, sorry for the long post. | ||
| Telson (Pitbull_trader)
Junior Member Username: Pitbull_trader Post Number: 118 Registered: 8-2003 |
Not sure if any of you people here know about a book called "Market Wizards" by Jack D. Schwager, there is this well educated guy called Michael Marcus who was on a Ph.D fellowship in psychology before he quit that and instead went on to make a bundle trading futures for a firm called Commodity Corp that was later bought up by Goldman Sachs. Anyway, he made about USD 80 mill there for himself in the 80's, got a bit bored, and decided to diversify into some companies and also real estate even though his heart wasn't really in it. As far as the real estate goes, he says that: "Out of a fairly large number of real estate transactions - many in California - I lost money on all but one of them. I am probably the only person alive that can claim that dubious distinction." Now, methinks maybe he wasn't the only one. Sure you can make money with real estate, but probably only if that is what you REALLY want to do, feel comfortable with, and really really do your homework. Anyway, good luck with your real estate empire ! Best, | ||
| Jim Schad (Jim_schad)
Intermediate Member Username: Jim_schad Post Number: 2022 Registered: 7-2002 |
anyone willing to disclose financial info on condos? how much total cost? How much down? how much financed? Rent generated? Cost of mgt company? Maint fees? ROI on invested money? | ||
| Michael C. James (Mjames)
Junior Member Username: Mjames Post Number: 148 Registered: 6-2003 |
If apartment living suits you, don't rent - buy a good condo in a good neighborhood to build equity. Looking to invest? Buy condos in popular tourist locations - Myrtle Beach/Charleston/Hilton Head, etc (anywhere one can combine Beach + golf + fine dining activities). Many condo purchases come with a rental-booking service which handles vacation rental booking/finances for you when you're not using the property. | ||
| Jim Schad (Jim_schad)
Intermediate Member Username: Jim_schad Post Number: 2016 Registered: 7-2002 |
if you had access to cash to buy whatever you wanted what would it be? I am interested in apartments at this time, but I dont want to bite off more than I can handle. Would you start with duplexes and progress up or start with a 4-plex or 8-plex etc? I would ultimately like to end up with a several hundred unit complex, but right now that is over my head in both cash requirements, manpower and knowledge. I also know a guy who is buying small strip centers. I don't know the first thing about renting to retail clients or how to attract them etc. Current vacancy rates scare me. Any opinions on that? Was also told that small warehouse type properties are good. Suggestions? Lastly, what about self storage units? Looking for as few headaches as possible, as few employees as possible, high occupancy and good cashflow. I've been doing stuff with mobile homes, but the clientele is beating me down at this point. Thougth about buying a whole MH park, but just not just I want to go down that road. |