All Forum Posts by: Bill Jacobsen

The numbers look good to me. I can't get close to the 2% rule in my state. I have invested elsewhere and usually get a 1.7% or better.

I usually just use a 50% of gross rents ratio to estimate expenses including taxes and utilities. After subtracting the debt payment I want at least $100 per door per month. Also, look at your cash on cash %. You probably want it above 10%.

Good Luck.

Bill

I think it has to do with scale. If he was going to flip these house how many individual people would he have to hire? If he was going to rent them out could he find a management company or individuals to manage them. Two thousand houses would be a very small investment for him but a lot of work.

He bought a real estate broker company so he is participating in this industry.

I think that flipping houses and rentals is a good business. You can flip houses anywhere but rentals are better in certain parts of the country. Managing your debt level is most important. If you can use all cash, all the better. If you are flipping you can always find houses. Finding good contractors is important. When buying consider what the property could sell for now, not three to six months in the future.

Good luck.

Bill

The question seems to be, "do I go into debt or downsize"?. The safest way is to downsize but you may not be willing to do that. We use our HELOC from time to time to buy investment properties. I like to earn at least 3 percentage points above my cost of money. My HELOC is about 4% so I need a return of at least 7%.