All Forum Posts by: Johnathan Alesso

Sturdy, spacious duplex for sale in Donora, PA, south of Pittsburgh.  The unit only needs a few cosmetic updates (less than $1,000 per unit) to be tenant ready.  The duplex has perfectly functional electricity, plumbing, and heating.  Pleasant, quiet area for a sound investment.  Tenants can pay all utilities. 

Sale price:  $17,500

Rent: $900 (both units)

Property Management:  $100/month

Insurance:  $40/month

Taxes:  $85/month

Maintenance/Repairs:  $100

CAPEX: $75

Cash flow:  $500/month

Contact me if you are interested.  Price negotiable. 

412-720-1607

Link: 143 Thompson

I'm a fellow Californian from the southland (San Diego).  We own all 30 of our properties in western Pennsylvania without much hassle.  We have two excellent property managers without whom our long distance investing would not be possible.  I do have a team in place to handle almost all issues, including local family in worst case scenarios.

You know, I am torn between investing in high price areas as opposed to cheaper inland areas.  I own 30 properties in western PA that produce cash flow, but no appreciation.  I owned a single condo in Washington, DC that appreciated $30K in six years.  I think the coastal purchases are more financially risky, but less hassle overall.  

You may want to consider middle ground.  Have you thought about a market like Sacramento, Portland, or Phoenix?  They are stable, above average in price, but still accessible.

I'm interested in how this works out for you!

Johnathan

Bienvenido!  I love Buenos Aires, but I understand why you'd prefer to invest in the US.  I hope you get a good exchange rate with the currency exchange. 

If you are tethered to a city-specific job and have flexibility, you may want to factor the investment climate of a location into your equation.  If you are looking for cashflow, look in the middle parts of the country (although you may in fact be bored after moving from BsAs!).  You can find good cash flow deals on the coasts, but you'd want to focus more on fix&flips in the expensive coastal markets.  Denver is a hot market, but you can still find deals in surrounding areas within driving distance.  As for Florida, I imagine it's much more affordable. 

BsAs es muy linda!  Where in the city do you live?  I spent time in Recoleta, where prices were surprisingly affordable. 

Hi Adrein,

Welcome to BP!  Yes, having lived in Europe myself, I understand your nostalgia and sentiment.  I lived in Germany for a while and appreciate the strong social safety net and lengthy vacation times.  I am also a California resident and, as it is, we are probably in the most European-like state for social programs and such.  Perhaps you can take some solace in that.

The trade-off, though, is that very few Europeans can retire early by way of financial independence.  The system, as I see it, is structured for long-term employment with generous benefits and retirement.  That's nice, but you'll still be working until your 55 or 60 at the earliest.  I believe the retirement age in France is around 60.

In the US, I find it far easier to achieve financial freedom for several primary reasons.  The cost of living is generally lower here, even in California, so that you can live more frugally and save more of your earnings.  There is also a more mature credit system that allows greater borrowing and leveraging for real estate investments.  In Germany, it was unheard of for people to invest in real estate given the general 50% down payment requirement.   The salaries are also much higher in the US, especially in coastal California and particularly in San Francisco, so that you have more earnings to save and invest in real estate.  Yes, I understand that medical and educational costs are far higher here, but you can structure your life to mitigate these expenses. 

You can save more of your earnings to invest in cheaper location, such as a regional state like Nevada or Arizona.  I know you've stated that you earn $14/hour, but with even this salary you can likely get a loan for a small rental in Tucson, AZ. 

Ultimately, I personally believe that financial independence is easier on this side of the Atlantic.  I would rather be free in the 30s so that all of my time is "vacation", rather than the 2-3 months per year with a job.   Of course, the European culture and ambience is mighty appealing as well and difficult to quantify! 

You may want to check our Mr. Money Mustache (www.mrmoneymustache.com).  He shows clear ways for anyone to achieve early retirement. You would probably need to relocate to a cheaper city since SF/OAK are so damn expensive. However, I live in sunnier, beautiful San Diego, and the costs are low enough to support financial independence ($1400/month rent versus $3500 in San Francisco). 

Send me a private message so we can chat more.  You have a compelling story!

Johnathan

Welcome, Krissa!  I live in San Diego, but have read a lot about the Seattle area.  It's quite expensive up there.  Are you looking to fix and flip?

I imagine New Castle is about as inexpensive a town as it gets.  The whole Detroit-Cleveland-Pittsburgh corridor (tour du rust as I call it) is about the cheapest in the country.  The benefit is that you can get inexpensive homes with moderate rents and reap positive cash flow. The downside is that you may not be able to readily sell the properties.  Also you may have trouble placing tenants in a small town like New Castle.  That being said, all areas have pros and cons.  If you buy really cheap and rent at market rates, you may do just fine.  I would caution against flips or immediate resale at the demand just isn't there.

I personally would invest in New Castle, if that helps.  The cash flow must be strong. 

I personally prefer cash flow, but I understand the question.  What is your primary goal?  My goal is to build enough monthly cash flow to meet my monthly expenses.  If your goal is to build capital you may want to consider the other option.  I personally never buy for appreciation, but I am also mindful of market trends.

I suspect you may incur less stress if you choose the cash flow route.  You also will have more control over your returns.  I would be careful not to invest in a downwardly mobile market, though.  Ideally, a cash flow market will be price-stable. 

You are not alone with PM frustrations.  In my ten years of investing, I have passed through many suboptimal, if not errantly awful, property managers until finding a great one.  You can give yourself a  break because most of us have immense difficulty in finding a good one.

That said, I find that the PM's responsiveness and "reachability" is a great indicator of their overall performance.  If they are on top of communications with you, all other factors tend to fall into place.

In California, there should be no shortage of PMs and PM companies.  If you want to chat, send me a message.  I live here in San Diego and can make a recommendation.

Good luck!

Welcome!  I live in San Diego and invest in Pennsylvania.  Where exactly is your East Coast property?

I use a trusted property manager to handle our rentals back in PA. 

Have you considered investing in SoCal?

Congratulations!  This is very inspiring as I am looking to start a flip sometime within the next year.  You've assured me that with a simple numerical breakdown the task is not overwhelming.