Is 09 treating you well?

Question

I've posted here only a few times this year due to the fact that I had taken on a new business venture at the start that has been wildly profitable.

Never the less, I've been curious how everyone has done concerning their investments and deals.

As an Agent, I've seen a significantly lower number of people who have been investing in real estate on my local level, which would be a good thing for those wanting to get in.

Have many of you seen a increase in trashy tenants? I'm hearing from a few people that they are running into a higher number of bad tenants as of recently, so I'm curious about those who do quite a few.

Also ,are you still using the 2% rule ,or do you do more than that? I've been running into a pretty significant number of properties that on paper are offering a pretty great return (I saw a 30k duplex the other day with about $1100/mo in potential incomes).

Your thoughts?

Rich Weese · Answer

09 has been mixed.  My TX rentals(40 plus sfrs) are 100% full, AZ is also really strong. My 5 Cancun condos are down due to economy and swine flu nervousness. Lots of properties to choose from in the FL area where I am now. Overall, it is a time of acqisiton with the big profits showing up in a couple years, imo.  
     I don't buy properties that trashy tenants can afford to rent, so no problem with that. I buy MOSTLY for cash, so I don't have as many competitors. The difficulty with lenders does make it tougher on investors, as well as the new guidelines of no more than 4 liened properties. Rich.

Jon Klaus · Answer

"Jon- Are you buying these mobiles in TX? Just curious. Rich."

Yes, all within an hour of Dallas to the east. Quinlan , Terrell, Crandall, etc.

Most are a 30-60 drive for me, but I am looking for (and finding) tenants that are responsible for minor maintenance.

Jon Klaus · Answer

2009 is really my first year other than a couple one-offs in 2008 and some activity several years ago.  I have bought 6 mobile homes on 1-4 acres each, and one lake house since March.  3 are rehabbed and leased, 1 is getting rehabbed now, and 3 are waiting for rehab/updating.  That's the bottle neck.

I've been able to buy (all-in) at 40-50% of ARV, and able to rent for 2.5% on average.  I also have one sold (under contract) with the buyer using FHA, so I should be able to do a couple more cash buys when that closes.

I'm having fun and God wiling, I can keep it up for some time.

Brandon Schlichter · Answer

I'm curious about the MHs too , I've been seeing a few on land for around $10k in my area, I'd *Like* to buy a few, but since they're rural , it'd be a 30m trip to visit any of them if the need arose.

Brandon Schlichter · Answer

Interesting, seems like the resort type stuff isn't doing too well , but the bread n butter rental stuff is.

What i've been doing that's bringing in the bacon is buying & selling adspace online, and collecting the difference (Arbitrage). The returns are pretty significant, but it's unregulated and I figure Mr Obama and the powers that be will eventually crack down on it and decide it's too profitable or the like, so , i'm wanting to take as much income as I can from it and invest it in something else, I've already funded a startup which has been doing well , but the rest of it, i'd like to go back to real estate as it seems much more stable.

Rich Weese · Answer

Jon- Are you buying these mobiles in TX? Just curious. Rich.

Chris L. · Answer

I would say that 09 has been mixed for us as well.  
We own 4 vacation rentals near Gatlinburg TN and we have seen a substantial drop in total rent.  We are getting about the same number of rental nights but the resort has had to drop prices substantially to make that happen.  It also seems that the more they drop the prices, the more complaints that we receive.

Our SFH's in Ft Wayne are doing as expected.  We probably have the normal number of tenant issues.  We have one in the process of eviction due to non payment and one that just left without notice 2 months ago.

Brandon, what are you doing that is "wildly profitable?"

Mark Yuschak · Answer

So far, 2009 has been a record year for me.

As an agent I've been inundated with new buyers to the market - from new investors to first time home buyers to people who want to take advantage of the low prices and upgrade to a bigger home.

As an investor, flips are going very well.  I've completed a couple this year with great results.

As a landlord, it's pretty much status quo since I've been so busy as an agent and rehabber.  Although, I did just suffer a severe loss on a property.  This past week I picked up another property on a QCD for peanuts.

I want to know, too, what is so wildly profitable.

Michael Rossi · Answer

Hi Brandon,

Glad to hear that you've found a highly profitable business.  What is it?

Things are going well here.  Rental demand is very high and vacancies are low.  I haven't seen any downturn in the quality of tenants.  Rents are going up (a little).

Mike

Is 09 treating you well?

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