I don't think it can be with any degree of predictability or SAFETY. You'll get a lot of vague ideas about as useful as vaporware. But the reality is there will be a high degree of principal risk involved to get a 13%++ annual return on your money. And as everyone knows, the monthly returns on rental property can be highly variable.
Leverage is great for controlling lots of properties which will build big wealth over a decade or so but in the short term, high leverage usually means negative cash flow.
The one exception can be properties in bad neighborhoods, borderline slums where CAP rates can be 15% or more. If you don't mind collecting rent with a baseball bat, section 8, crack houses and the like, you can make pretty good money doing what few others care to.
Most people who tell you it's easy to make double digit returns on moderate sums of money like 225k are generally mathematically challenged and idealistic. When pressed for the bloody details behind their claims, they can't deliver anything an analytical mind can't shred to pieces.
If you live in an area where 70k homes easily rent for $1000/mo, then you are in business. Let me know where that is.
I will have to agree with spinwilly on this one, if you do find an area where a 70k home will rent for 1k let me know too. Here in Arizona you will be lucky to purchase a 200k home that would rent for 1k per month. Seems like every street corner here has a For Rent sign on it. Your best bet in Arizona is finding a Duplex or 4-plex.
Here in Texas you can buy foreclosed 3yr old double wide mobile homes on an acre of land for around $30k each. These will net over $500/mo after taxes, insurance, and maintenance.
These will appraise for $60k each. Only trouble is there is no financing available and that's the reason they sell for half price for cash. So if you decide to bail out, your cash is tied up indefinitely.
I have 31 units in very low to moderate income areas. Not only do I not require a bat to collect rent, my tenants respect me. I have never raised my voice or got too emotional in anyway. You don't pay? I follow the law and evict you. No drama. I run my numbers where if I am able to get 100% financing (which I haven't done yet, but still run my numbers at) that I would still cashflow $150 per unit minimum.
These people in low income areas are typically your service people. Treat them with respect and not like scumbags and they will respect you and your lease rules. Is this the fastest way to make a buck? No way but if cashflow is your goal, which mine is, they work quite well.
Reccomend reading Robert Shemins Book "Secrets of a millionaire landlord".
[addsig]
How about becoming a hard money lender? With points and a 12% interest rate, you should get to your monthly income goal if you can get all your money invested.
Leverage yourself as much as possible, put as little money down as possible. Buy low-moderate income areas and be strict on your numbers.
[addsig]
Purchase mortgages discounted to a 30% yield.
I don't think it can be with any degree of predictability or SAFETY. You'll get a lot of vague ideas about as useful as vaporware. But the reality is there will be a high degree of principal risk involved to get a 13%++ annual return on your money. And as everyone knows, the monthly returns on rental property can be highly variable.
Leverage is great for controlling lots of properties which will build big wealth over a decade or so but in the short term, high leverage usually means negative cash flow.
The one exception can be properties in bad neighborhoods, borderline slums where CAP rates can be 15% or more. If you don't mind collecting rent with a baseball bat, section 8, crack houses and the like, you can make pretty good money doing what few others care to.
Most people who tell you it's easy to make double digit returns on moderate sums of money like 225k are generally mathematically challenged and idealistic. When pressed for the bloody details behind their claims, they can't deliver anything an analytical mind can't shred to pieces.
If you live in an area where 70k homes easily rent for $1000/mo, then you are in business. Let me know where that is.
I will have to agree with spinwilly on this one, if you do find an area where a 70k home will rent for 1k let me know too. Here in Arizona you will be lucky to purchase a 200k home that would rent for 1k per month. Seems like every street corner here has a For Rent sign on it. Your best bet in Arizona is finding a Duplex or 4-plex.
Here in Texas you can buy foreclosed 3yr old double wide mobile homes on an acre of land for around $30k each. These will net over $500/mo after taxes, insurance, and maintenance.
These will appraise for $60k each. Only trouble is there is no financing available and that's the reason they sell for half price for cash. So if you decide to bail out, your cash is tied up indefinitely.
I have 31 units in very low to moderate income areas. Not only do I not require a bat to collect rent, my tenants respect me. I have never raised my voice or got too emotional in anyway. You don't pay? I follow the law and evict you. No drama. I run my numbers where if I am able to get 100% financing (which I haven't done yet, but still run my numbers at) that I would still cashflow $150 per unit minimum.
These people in low income areas are typically your service people. Treat them with respect and not like scumbags and they will respect you and your lease rules. Is this the fastest way to make a buck? No way but if cashflow is your goal, which mine is, they work quite well.
Reccomend reading Robert Shemins Book "Secrets of a millionaire landlord".
[addsig]
How about becoming a hard money lender? With points and a 12% interest rate, you should get to your monthly income goal if you can get all your money invested.