Am I Crazy Or What? Rental Props Strategy

[Redraidernurse]

I have to agree with Disneysteve, this sounds like a train wreck that could cause you to file for bankruptcy in some years time.

[disneysteve]

Originally Posted by unloopme

I personally have no landlord expirience

I figured as much.

I make 40+K, have 29K saved, only debt is my condo which was a short sale for 70K 15 months ago. I'm 38, not married. I also own a paid home valued at about 250K.

What is the status of the paid for home? Are you renting that out?

You earn 40K and want to borrow $300,000. Do you really think you are going to find a lender willing to make that loan? That's 7.5 times your income. No way that is going to happen.

I have to say, even though your a complete stranger, your doing a hell of a job of convincing me not to do this.

One of the things I love about this site is that sometimes the very best advice comes from strangers who are completely impartial. I've got no skin in the game. It doesn't matter to me if you become a millionaire or go bankrupt as a result of this deal. I'm just telling you the truth as I see it.

Originally Posted by bjl584

Think of a rental property as a stock that pays a monthly dividend(rent.) If you are not in the black after expenses, then you shouldn't pursue the investment.

I like the stock analogy. The bottom line is that it doesn't make any sense, no matter how you run the numbers, to purchase an "investment" that is guaranteed to lose money.

[unloopme]

I really appreciate everyone's input, I'm glad I sought some outside opinions.

OK, so let's approach this from another angle.
Hypothetically of course, if you had 150K cash, and could get a mortgage/loc on a paid prop(which is rented at $1500/mos) for another 100-150K at 4%...what would you do with it?
4-5 rental props doesn't seem like a good idea?

[disneysteve]

Originally Posted by unloopme

Hypothetically of course, if you had 150K cash, and could get a mortgage/loc on a paid prop(which is rented at $1500/mos) for another 100-150K at 4%...what would you do with it?
4-5 rental props doesn't seem like a good idea?

I would not take a mortgage on a paid off property in order to invest that money.

If I had 150K cash and wanted to buy a rental property, I would be looking for a property that cost something less than 150K to leave myself a cash cushion for repairs and to cover vacancy time.

[jteezie]

Given the terms of this "deal", it is horrible unless you want to lose money. I can't believe something so malicious like this is out there.

one other consideration is that the probability of everything going according to plan is zero.

[unloopme]

I'd like to thank everyone that replied for 'talking me off the ledge.' I'm going to look at making some more conservative decisions, and take a lot more time to determine the best strategy for my situation.

I'm also open to non-real estate investments ideas is someone wants to chime-in and give me some ideas...or is that some other section of the forum?
Thanks again

[disneysteve]

Originally Posted by unloopme

I'm also open to non-real estate investments ideas is someone wants to chime-in and give me some ideas...or is that some other section of the forum?
Thanks again

The investing & banking forum would be the place for those questions. Be prepared to tell us what the money being invested is for and what your time frame is as those two factors are very important in deciding what investments would be appropriate for you. People will also want to know what the rest of your portfolio looks like already.