All Forum Posts by: Callum K.

Like Jonathan said, it can get complicated. Placing the properties in an LLC is only useful if you are buying the property with cash. Purchasing a property with a mortgage under an LLC will subject you to commercial loan terms and are always substantially worse than if it were in your name.

Sorry to burst the bubble here, but I think Deren is correct.  There are a lot of holes in your thought process but I guess it might be nice to look at this as a dream or wish.  Below contains a few items that stuck out to me.

Financing - Getting 1000 mortgages is impossible.  Not only are you unable to get higher than 10, as your portfolio grows, you will likely need to go with a commercial loan.  With that, you can forget about the 30 amortization schedule and your interest rate is likely going to be much higher.  That will erode your post-financing cashflow substantially.

Maintenance - Assuming no maintenance over a 25 year period is not likely for one house, let alone 1000.  25 years is a long time and you are likely to experience several significant costs in that period.

Insurance - That cost of $1500/yr seems high to me.  I'd cut that in half

PM - If you really do have 1000 rentals, you will likely have your own staff of PM and maintenance, so 10% of rents is probably very high

Taxes - $2,500 for taxes (at least in Tulsa) seems high to me.  Maybe closer to $1800-$2000

Operational issues - With that many houses, you will need departments of people and infrastructure to operate.  This will become a significant cost as you grow

Finally, to help put this into perspective, assuming you will be looking for deals and not just buying at market price, it will be difficult to find so many properties.  Based on your model, you would need to close on 3.33 properties per month (1000 / (25x12)).

Sorry again to throw the wrench into your idea.  

Like @Rob Lane, most of my properties in Tulsa range from $1300 and up.  I have several dozen houses in the suburbs of Tulsa and I think my average is closer to $1,600/mo with $2,300 on the high end.  I don't offer all the other amenities, but my belief is that with lending requirements more difficult today than 10 years ago coupled with higher rates in major events that impact one's credit (including divorces, medical debt, student debt, job losses, foreclosures/short sales, etc), it only makes it harder.  I also have a lot of tenants doing shorter term job relocations (traveling nurses, department managers, etc that are on rotations for several years at a time).

Just sent you a PM.  Hopefully it worked.  Car business?  That is too smart for me, but I'd love to meet up and trade some stories sometime.  I love learning about different businesses and hearing about how others make ends meet.  Let me know if you want to grab lunch sometime.

I'm about to dive into erentpayments.com.  So far, setting up my houses and apartments have been relatively easy but we will see how it goes beginning Jan 1

Arvest worked with me to get to the 10 SFR properties and I am helping several friends and family do the same. I have a couple other lenders that i am doing commercial deals with that I know they offer decent terms for houses as well. PM if me if you would like their contact info.

@Damian Young congrats! Glad it worked out for you!

Not sure if posting other people's cell phone numbers and emails on public forums is the best idea.  you might want to remove the post and message the contact info

Hi there.  Brookside is a common location, but I think you are competing with lots of people as well as wealthy people just dumping cash into teardowns (especially with the Gathering Place opening soon).  Check out a bit farther south.  Houses and neighborhoods built in the 1960's and 1970's seem to be ripe for rehabs right now so probably no farther south than 71st and stay within the creek turnpike and Highway 75.  Hope that helps

@Jeff Santee, Yes, the returns I have been getting started around 25-30% in the midst of the financial crises and has come down to the 12-15% now.  The problem I am having is that it is a lot harder to find houses and I think the rental market has been saturated with builders dumping houses onto the rental market as well.  I am also meeting people running out of state owned portfolios that are in the $5M+ range which I think is impacting the Supply/Demand curve.