All Forum Posts by: Johnny Lau

I just closed on a house last month, the numbers are good. 3/1 SFR, 76,000, 975 rent, around 650/mo cash flow after expenses. So about 10% ROI if my calculations are correct. EI bought it sight unseen with a very good all inclusive team, property management etc. I’m actively looking for the next property. The cash flow can’t be beat and the area is very promising. This was a turnkey house with an established tenant, so the cash flow was immediate. Lots of houses available in wide price ranges from 45k-200k on up.

Thanks all for all that valuable information. That was an eye opener! I will look at higher priced areas and work with a good property manager. So my next question is who buys these houses if locals won’t even touch them?

@Jay Hinrichs

The cap ex is something I need to consider, this is such a basic simple house, I don’t expect any big repairs. But I do see your point on how a big expense can wipe out your cash flow for the year. Have you ever bought at the lowest end of the market?

My experience in California is the 100-300k price point with most at the 180-200 range.

Josh, 

The house is in the 35211 zip code, I’m assuming it’s not a very desirable area, but I plan to make the house one of the nicer ones in the area, fresh paint, landscaping, etc.

House is in Birmingham, Alabama. It’s in decent condition with a tenant already living inside. Will not need much work, maybe cleaning and painting or nothing at all until the next tenant turnover. There are actually several houses to choose from in the same price range. I will have a property manager who’s experienced with houses like that do all the work. What are the pros/cons?

I am in the middle of a flip in the Bay Area and starting on the next. I am new to this so I partner with an experienced flipper. The numbers are really exciting, of course the more risk the more reward. My usual investing is buy and hold long term. I’ve done pretty good in that arena, but this flipping thing really opened my eyes wide. How many out there are doing great at the flipping biz? Especially in my local area, the South Bay?

“Everything is negotiable “. Someone said that once. I negotiated 2k off my turnkey from an established turnkey provider. Even though I considered the original asking price was fair. I would have bought it even if they didn’t go down at all. This was all done at the beginning of the purchase, with no appraisal done yet or rent projections. So, if they want your business it does not hurt to ask for a reduction.

@Zevi Arem It was purchased all cash, after expenses it returns about 650/mo Easiest purchase I ever did.

@Zevi Arem My last purchase was a turnkey and the asking price was fair. I still offered lower and got 2,000 off. It was a lower priced house that I’m used to so I was happy with a 2k discount. I doesn’t hurt to ask. I was actually surprised they went down a little. Listed at 78,000 Purchased at 76,000 Rents at 975.00

Happy wife happy life.

With that said, passive income makes me and my wife very happy!

Not being totally dependent on your W-2 income and being able to live off your rentals is security nothing can match. Making money while you sleep and wake up with more in the bank....so nice.