Real Estate next steps

[TexasHusker]

I ate lunch with my banker yesterday to give him my overall financial picture and where I go from here.

Good lunch.

He added up all my real estate holdings that are investment properties - 4 total - and told me I had around $250K of funds that I could pull out of these properties in equity, and use toward down payments for other investment properties.

I think I'm going to do just that. My goal is to buy about $1.2 million in properties - about 6 more vacation rental cabins - using the $250K as down payments. I can pretty easily find $190K to $200K cabins that produce a minimum of $1000 per month profit after all debt service and expense, so by going through this process, I can be making another $6000 a month minimum in a year or so, and let other people pay off these houses.

I'll keep everyone posted! This all started from 1 single rent house back in 2003!

[bjl584]

Good Luck.

Any plans to scale out beyond 10 units?
I'm assuming that you have some form of a property manager being that these are long distance properties?

[TexasHusker]

Good Luck.

Any plans to scale out beyond 10 units?
I'm assuming that you have some form of a property manager being that these are long distance properties?

I'm going to keep accumulating properties as I am able. I own a property management company so I've got that base covered.

[Fishindude77]

Good luck with this, I like real estate too, but don't have the same appetite for debt. Do a good job managing things and it should work out great.
My next thing is going to be another hunk of farm ground. Guess it's all about what you understand and are comfortable with.

[TexasHusker]

Good luck with this, I like real estate too, but don't have the same appetite for debt. Do a good job managing things and it should work out great.
My next thing is going to be another hunk of farm ground. Guess it's all about what you understand and are comfortable with.

That is precisely correct. Invest in what you know best. Raw land can be a gold mine. Unfortunately I know nothing about it.

That was always my discomfort with buying stocks - I knew nothing about any of those businesses nor what was going on inside those boardrooms. Surprise! The CEO has been arrested for money laundering and embezzlement! Your $50 per share stock is now $20 a share!

[Fishindude77]

Looks like I just picked up another 69 acres of farm ground down the road. realtor gave me a verbal that we have an accepted offer. Having recently exited and sold a business, I am trying to put the proceeds into various investments that will preserve the money and provide some added income.

With crop prices down presently, this particular one will only pay back 2-3% right out of the gate, but that's as good as any CD and there is almost no way to lose money on it. The real payoff is normally the long term appreciation of the land value, should we choose to sell 10-20 years down the road.

I side benefit is we have another hunting patch 3/4 mile down the road.

[amarowsky]

I like your plan. Right now my brother and I are taking out HELOCS to pay off our jointly owned rental.

According to our calculations, my half of the financing for the property ~45k will be paid off in 1.5 years. Then we can either use the equity from the rental, and/or equity from our individual helocs, to buy another. It's not as sexy as leveraging a ton of equity, but i am very comfortable with leveraging 40-50k at a time and paying it off (accelerated by the debt free income from the rental property - (feeds + taxes)).

I'd like to have ownership equaling 8 properties total by 40. (or 1/2 ownership of 16).

Similar path to you TH, but mine is much slower growth (with less risk too though).

[TexasHusker]

I like your plan. Right now my brother and I are taking out HELOCS to pay off our jointly owned rental.

According to our calculations, my half of the financing for the property ~45k will be paid off in 1.5 years. Then we can either use the equity from the rental, and/or equity from our individual helocs, to buy another. It's not as sexy as leveraging a ton of equity, but i am very comfortable with leveraging 40-50k at a time and paying it off (accelerated by the debt free income from the rental property - (feeds + taxes)).

I'd like to have ownership equaling 8 properties total by 40. (or 1/2 ownership of 16).

Similar path to you TH, but mine is much slower growth (with less risk too though).

I think my risk is mostly mitigated by the underlying rental income.

Back in 2005, I overpaid for a cabin by $40-60K. Spent $240K on it. Then the market crashed it it was worth $180 tops.

But...the rents kept percolating - anywhere from $30K - $40K a year - $10K-15K of that net each year.

Had I needed to sell it right then, I would have had some hiney showing

[Atretes1]

I am looking for rental 2 and 3 just nothing available locally now. I would like to investigate vacation rentals in other areas just no time right now....