All Forum Posts by: Lou M.

Joel:

I guess I don't know at this point how hands on I will be. I'm hoping to buy properties in a higher income area, therefore the quality of the renter should be better. Hopefully avoiding evictions, damage etc. I will certainly do the minor stuff myself, but plan to hire others to do repairs and such that is beyond my skills.

I guess I'm looking for income now, rather than down the road. Who knows what life holds for each of us. Might as well as enjoy it while we can.

Hey guys. I ran the numbers a couple of different ways based on your reply. If I borrow money, then yes I can buy more properties. But I will have to pay the lender 4-5%, and the property may only appreciate at 2% per year. Assuming I'm borrowing 70% of the value, I think the interest payments will wipe out any gain in value. So basically at the end of the ten years I own the property outright, but gave the gain to the lender. If I purchase the property all cash, then my money is earning the interest rather than someone else. I pocket the cash flow, the property still appreciates and I get to keep that too. It's a lower ROI, but may be better in my situation. Any thoughts?

Thanks you all! Many different outlooks. I currently have good passive income from another business, but may decide to sell to partners. I'm really looking to sort of be semi-retired. Investing the cash in rentals and reaping the benefits now would be nice. I think the property will appreciate and be worth more ten years down the road. I should get immediate benefits in income, depreciation etc. and if I decide to sell the property 10 years down the line I should recoup my principle + any gain. Does that make sense?

Thanks Justin. My situation is that I have cash parked and not working for me. I used to invest in the stock market, but not anymore. I'm 52 and just looking to produce income from the cash. I've looked at many deals, and when I work in financing, the numbers don't look good. Basically the rent will pay the mortgage and nothing left over. If I use my money I can get 8-10% return, rather than leave it sitting in the bank at .10% I can purchase many properties with the cash and have a nice portfolio, producing a nice income stream.

I've been told that having too much equity in rental properties is not good. But I have resources that are not working for me. We all know what banks are paying in interest these days. The stock market is too risky. So is it wrong to invest (pay all cash) money in rental properties that can produce a nice return?
Is there a down side that I'm not seeing?