Originally posted by @Jim K.:
Originally posted by @Account Closed:
So are you saying that unless you are a skilled tradesman you have no business owning any rentals? How is it in anyway a scaleable business then? Self managing and self fixing rentals is just a job. And not a great one at that! Unless of course you just love walking around with a tool belt and its what brings joy and meaning to your life. In that case, go right ahead!
No...this is what I'm saying.
1. Throughout the Rust Belt but especially in a place like Pittsburgh, where the housing stock is more often than not seventy, eighty, ninety years old, where the population continues to shrink and the price of getting things fixed continues to rise, the self-managing buy-and-hold model is next to impossible to get off the ground without significant handyman skills.
2. The tradesman shortage of the Rust Belt has long been noted. Just how bad it has become in the last ten years is often underplayed here on Bigger Pockets and elsewhere.
3, Anyone with dreams of running a successful string of long-distance BRRRRs from their yacht on the coasts in a place like Pittsburgh is next to insane.
4. Sooner or later, with a small portfolio, you're going to get stuck and you can easily get into a catastrophic financial position if you are unwilling or unable to pick up tools in the name of a breezy idea about how incredibly valuable your time is and how vaunted and exceptional your "real estate skills" are next to other people's time and skills.
5. If you think property managers were born to save your precious and tender cheeks whenever they lands in a tight spot, think again.
6. It's incredibly difficult to make money in elderly housing stock if you don't know a great deal about how to maintain and renovate elderly housing stock. Much of this is also regional in nature Nobody would believe a port-a-crapper salesman who insisted you could successfully launch and run a port-a-crapper empire ten states over and never smell crap. How do the gurus continue to succeed in telling gullible people that there's money to be made in old, fragile crapshacks and they'll never need to know how to fix a crapshack?
7. Think less about meaning and joy when it comes to your investments and a lot more about security and the duty you have to your family and you'll be al lot less dissatisfied if you decide to get into real estate.
I partially agree with you. OOS investing in aged midwest property especially at todays prices is a dicey proposition. That is why I have sold almost all of my C class holdings (at a very nice profit I might add). However, many of us are much better with a spreadsheet than a hammer and if I even tried to fix things myself it would be an unmitigated disaster. Lack of skilled tradespeople is not just a midwest issue. I just paid $450 for what most would consider very minor handyman stuff in my San Jose, CA rental. Of course this was the only expense on that property all year and the rent is almost $4K per month so its much more palatable. In a midwest rental that's 50% of a months rent. That is why I try to educate the OOS people chasing $100/month phantom cashflows on the type of homes you are talking about.
I do think you should find joy in anything that is talking up most of your precious lifes time. And most investors get into this for the dream of passive income, which is definitely not what you are describing!
