who here is making a living off of rentals? 23 posts by 9 users

Posted: 06/19/2008 at 07:18AM

Despite what the gurus tell you, this is NOT a get rich quick business. It took me from '78 to about '91 to start making any " real money" It took until '84 to realize that carrying debt was a fools game, and another 3 years of so to pay off my SMALLEST BALANCE mortgage.

Once that one was gone I took the incrased cash flow and started slamming that onto the next smallest, then the next etc. By '89 I had 4 of them free and clear IIRC. Since then I've never had a mortgage on any of the 16 SFHs that made up my " porffolio" .

During this time I was also doing a couple of flips, wraps etc. I also had the advantage of a well paid full time job. Starting in '96 I began selling them off on a seller financing program (lots of thread have this explained in detail). Since '99 everything I've acquired has been on a cash purchase, seller finance deal.

all cash

Posted: 06/19/2008 at 10:16AM

How do you eat an elephant?

You might say: What? You ARE kidding, right? I mean, come on, the thing is huge. It will take forever. I am a big guy and a bigger eater, and I can not see how I could EVER eat an elephant. Really, are you serious? How DO YOU eat an elephant?...

The answer is obvious: One bite at a time!

Do not get caught up in the emotion of it all. Take one step. Do not worry about the 20th mile of the race, a marathon runner will explain. Focus on getting out of the starting blocks. Then focus on getting to your comfortable pace. Then keep it up.

You are right. You will need a portfolio of 20 properties, probably many more, if you want this to be a full time job with a comfortable living. (BTW, good luck with $200 cash flow per month, it is more like $100.) How do you do it? Start with getting out of the starting blocks. Take your first bite. Buy your first.

Posted: 06/19/2008 at 02:23PM

It is a plan. It is not for me, but it is way better than most people have. It gets you to a level of success as you define it.

The important thing is to work out a plan NOW, and get started NOW. All of us with a degree of success wish we started this ealier.

Posted: 06/19/2008 at 02:49PM

I do not mean to sound as if I am knocking your plan - to each his own.

My plan is the one I have followed. Read the 'eat an elephant' post in this thread, check out my profile (click the 'profile' button to the bottom right corner of my picture), or go to " Meet the Investor" under " Investor's Focus" in the left hand column of your web page and look up my interview.

You are also welcome to do a search on my posts or ask me any specific questions.

I am a slow and steady wins the race kind of guy and have amassed $2M in properties as a regular Joe... the son of an electrician... the first to ever go to college in my family line... the grandson of 4 immigrants, well, you get the picture...

Posted: 06/20/2008 at 05:51AM

Mike, thanks for your answers - I must sound like a fish out of water here :)

Posted: 06/21/2008 at 05:58AM

Mouschi, I've noticed you've been posting a lot of questions here in the forums, that's a good thing. I recently started RE investing myself. The first house I bought was a nightmare, and still is. I paid too much, I put too much $$ in to it and when it wouldn't sell I was forced to rent it out for less than what it costs me a month. I made all the newbie mistakes. When it finally does sell, I will probably take it in the shorts. But, in the mean time, I've purchased another property. But this time I used MikeOH's advice and bought it dirt cheap. It is absolutely critical that you acquire properties at a huge discount! Do you see the " www" button at the bottom of MikeOH's posts? That is a link to his website. Go there and buy his book " 1 minute to rental property riches" . Read the book, and when you're done, read it again. If you use his formula you can't help but to make money. Fortunately because of the foreclosure crisis, there are many properties for sale that will meet his number requirements. Many of them are listed on the MLS. Oh, and one more thing, don't be afraid to ask questions. The advice you will get in these forums is priceless.

Good luck.

Bartstop

Posted: 06/21/2008 at 07:41AM

Lots of great advice for you here, mouschi.

I second bartstop's advice to buy and read MikeOH's book. If you follow his simple rules, you cannot fail.

HOWEVER... also go and read Mike's blog about his day to day 'adventures' in real estate to see what life as a landlord can be like. Man, it's a never-ending soap opera...

If I was a Hollywood producer I'd make it into a weekly television series.

(Hey Mike -- are you working on your script yet?)

Posted: 06/22/2008 at 05:12AM

Man, it's a never-ending soap opera...

You got that right! A person really needs to think about dealing with the drama if they're going to operate low income apartment buildings (SFHs and more expensive apartments aren't nearly as bad). To tell the truth, I kind of enjoy the day to day twists and turns. It adds a little excitement!

One thing I've learned is that you will never " see it all" . I can't tell you how many times I think I've " seen it all" where tenants are concerned. This past week, I was proven wrong again. I rented an apartment in the Pink Elephant (my ugly pink apartment building that I'm repainting) to a relatively nice and normal looking young woman who had two young children. She had a job; no history of eviction; and no criminal record. Before too long, her 14 year old brother moved in with her. His parents are drunks who live nearby and therefore I didn't say anything about him moving in because I thought he would be better off with his sister than his drunk parents (an uncharacteristicsally nice thing for me to do). In addition, he would babysit for the tenant's kids when she was working. The tenant had introduced me to her boyfriend who is the manager at a local retail store. All seemed to be going well.

Then, one evening last week, I got a call from one of the drunk parents of this tenant (and her 14 year old brother who moved in). He said he was calling to tell me that everyone in that apartment was acting " stupid" . I asked him what that meant, and after a lot of effort, got him to speak so that I could understand what he was trying to say. He said that the 14 year old brother had moved in an underage girlfriend; the tenant had moved in a boyfriend (not the store manager, but another one); and that the entire group was having group sex with the tenant's two little children present AND that the 14 year old was selling marijuana. In addition, they had all even decided that it would be a good idea to strip and run down the street naked in the rain.

I went straight down to the property. I found the tenant's mother (drunk as usual) and told her to knock on her daughter's apartment. I knew the tenant probably wouldn't answer the door for the landlord if something was going on. The mother knocked on the door and we both went in. Sure enough, they were all there and high as a kite: the tenant, her shack-up SECOND boyfriend; the 14 year old and his shack-up teeny bopper girlfriend; and the two small children who appeared to be unharmed.

At that point, I told everyone but the tenant to pack their bags and GET OUT! When they didn't IMMEDIATELY move - I yelled NOW! I entered into a very loud rant and told them that I wasn't going to allow any of this stupidity. I stood there as they all packed their bags and got out. I told them that if ANY of them were even seen on the property again (even once), I would immediately evict the tenant and her 2 children and they could live in the street for all I care. That was not a bluff, I evict people and they become homeless all the time.

Now, I've seen everything.....or have I? What can top a bunch of inbred, drunk and drug addicted child abusers who like to run naked in the rain down a busy city street? I don't know, but I'm sure I'll find out!

Mike

Mike

Posted: 07/03/2008 at 04:33AM

No, you can't just kick someone out, but you can evict the tenant is she doesn't follow the lease. I'm also in Ohio and it usually takes me about 5 weeks to complete the eviction and setout. In fact, I've got two setouts today, one at 10 am and one at 1pm. After the tenants have ripped me off for rent, I actually enjoy throwing their belongings out on the street! Very therapeutic (maybe I should start a clinic that allows people to relieve their stress by throwing deadbeats and their belongings out to the street!)

Mike

Posted: 07/03/2008 at 03:41PM

I can only speak for myself, but the last thing I want to do is be a full time property manager. I treat my RE like a 401k I just put $10k on the principle of one of my properties. I use a PM.

My goal is not to eat Alpo for retirement.