All Forum Posts by: Ian Fiske

Thanks, everyone!  I appreciate all the perspectives.

@Ben Zimmerman, that makes sense to me.  Equity builds, cash flow eventually catches, up, etc.  But lots of posters basically said the idea was bullocks in another thread (https://www.biggerpockets.com/forums/88/topics/437073-advice-appreciated---negative-cashflow-but-positive-equity?page=1), and that appreciation is pure speculation.  @Thomas S. would probably agree with this, and maybe @Andrew Ware.  It seems like a serious concern, though the counter may be that estimating returns in the stock market (or even most businesses) is also just speculation with educated and/or rose-colored guesses.  

But clearly too the investment firm must be seeing something, right?  I mean, even assuming economies of scale would allow them to manage it cheaper, more efficiently, etc., these numbers still seem to be fall short of market returns.  They must be seeing something...

Interesting, thank you! So then if SFH's are a losing proposition, especially compared to the stock market, what areas of REI should I be looking to invest in?

edit

Thanks very much both of you!

I'm trying to see the numbers in real-life, so I used the SFH spreadsheet from J. Scott and a SFH for rent by a REI company. I still can't seem to get the numbers to look very good:

So, assuming this company is managing the property themselves, they're making less than 1% ROI? Even assuming the property appreciates moderately and the home is paid-off in 30 years, this beats the market?

Thank you again, and Merry Christmas/Happy Holidays!

Hi all,

This is my first post, so apologies in advance if this is in the wrong forum.  Thanks in advance for the guidance.

I'm in my education phase of REI, having reviewed different forums off and on for the past 6 months. I've been impressed with Bigger Pockets, and reviewed "The Ultimate Beginners Guide to REI." However, I have somewhat of a threshold question...

I'm pretty comfortable in stocks, and expect a long-term return of 7-8%. In reviewing the forum, Guide, some limited RE experience and other educational sources, if I invest in RE directly it will likely be in SFH and/or condos. I've come to realize, for a variety of personal reasons (busy job, young family, some health issues, and other personal reasons) that I will very likely need a property manager. If property managers take 10% off the top (plus an extra month's rent) this means I need to clear a minimum of 18% ROI just to break even with my stock portfolio. But just by virtue of taking on more risk by investing in a single property (and as a novice!), I'd need to aim for even more to make the risk worthwhile (probably 22-25% before the manager, meaning 12-15% after a manager). This seems unlikely IMO. But you guys are the experts, not me. :)

Can you really expect to clear 12-15% after a manager by investing in SFH/condos?

Again, thank you!