What Would You Do With 250K?
In 2 weeks I will have 250K. My work is seasonal so I only have to work summmers. I want to invest all 250K in rentals with positive cash flow so I have year round income. How can I maximize my funds should I buy a dozen properties? Or should I buy 1 big building? I live in California but want to invest elsewhere. What do you pros think? I would like a minimum of 5k a month positive income.
I eagerly await you replies!
Thanks samedwin, I have been seeing places selling for under 50k with rental income of around 500 a month. I could leverage into enough of those to hit my goal of 5k a month I think unless I am missing something.
Thanks
yes, there are properties under 50k and renting for 500 a month. I own 2 that i bought for 30k each. one rents for 400 a month and the other 500 a month, both on year long leases. even after taxes, ins (which are very low) , vac rate, maint, and mgmt I still see a good cash flow. now multiply those 2 homes times 20 and you should have a good cash flow. plus I went stated income on my loans and the intrest rate is 7.75. with your leverage you should be able to get a much better rate. people will tell you that landlording is not a good way to make a lot of cash, but in your case it could work. good luck!
Dear Captain,
My idea is to look for the "chip and dent" properties. Sometimes the only real problem they have had is poor management.
Cordially,
Alice
I forgot to mention we have a management company that takes care of everything for us. they handle all problems under a 100 dollars without even asking us, anything over a 100 they ask. all I do is sit by the mailbox and wait for my check. it doesnt "drive me nuts".
Have you thought of possibly becoming the lender?
Hard Money lending @ 65% or less LTV on construction loans. You would have a safe position in the properties with 4-10 points up front and a high interest rate for a short term loan.
example:appraised @ $150k --loan amount up to $97,500 add your points plus interest rate. These loans only last for several months (3-5)and you
you could have several of these deals going at a time, you will be able to lend your money several times in a yr. and would reach your goal. If any of these deals go bad you have the opportunity to make even a larger profit. You control the draws to the contractor and only have to spend time when you or your inspector inspects for a draw down.
Good Luck,
Robert
Dlitedan, what you have said interests me the most. If it worked so well for you on one property, is there any reason not to do it on as many properties as you can?
I would love to know how and where you found your property. Are we looking in the same neck of the woods?
Thanks
I think you need a different lender, I see 50%DTI NOO all the time.
The answer to your question is yes, the amount of rental income that adds to your personal DTI will allow you to qualify for a larger loan amount.
Good Luck,
Robert
Depends what the program is... a lot of jumbo lenders will not allow for over 40-44%. Possibly conforming where ratios are 28/36 unles DU/LP accepted.
Each lender has different DTI requirements depending on borrower and program.
If you have a large enough net worth, with a large enough cash reserve, with a high enough credit score, the lender will probably ignore DTI ratios entirely.
John969,
Glad to meet you.
Advantages:
1. You can get more units under one roof.
2. Price per unit is usually cheaper
3. When you have a vacancy, you have not lost 100% of your income.
Disadvantages
1. Greater turnover, as most are in transition.
2. When selling, your market is smaller.
These are just a few. Hope this helps
Larry
Oh and just to make it clear this 100 cash flow per unit is also with getting 100% financing.