All Forum Posts by: Kate Horrell

Not sure where the body of this post went.  Sorry!

warning:  time suck ahead

http://terriblerealestateagentphotos.com

@Micheal Waldrup , I just noticed you are in Virginia Beach.  I don't see any reason to leave your backyard.  Norfolk/Virginia Beach is one of the areas where I am comfortable buying.  You will probably spend more than you would in a bargain area, but you can find some good deals on quality properties.  And I have a brilliant PM there, let me know if you want his contact details.

We became landlords for the first time nearly 20 years ago when we moved away from our house for a job transfer.  We went through four property managers in the first two years, and then luckily found a fabulous PM.  That house has done fabulously over the years, completely because of our PM.   This is one of two markets where I am considering expanding, but only because my PM tells me that he continues to be in the business forever.

We own properties in another area, as well.  We lived there, and hope to return.  We don't use a PM for those properties but I do have an absolutely amazing contractor who acts as our PM for everything except money.  I have purchased one property there since I left, with my contractor handling all the "look and see" parts of the purchase.  Again, I would not buy another property there if I didn't have him.

We've done well, but I have been very conservative in my purchases.  I only buy houses in areas that I know very well and that have very little risk.  We're talking superior location, Blue Ribbon schools, high rent and high occupancy areas.  And they're expensive.  We'd own a lot more properties if we bought in a lower-cost area, but I'm not comfortable with that.

I have considered experimenting with less expensive properties, but I wouldn't want to do it from a distance.  I just don't know those markets intimately, and I think that is an important part of making good choices.

You can definitely make money on long-distance properties, but you have to have a good team, and somehow know the area very well (like having lived there previously, or being able to spend a good bit of time there.)

That is awesome.  We are renovating our personal home, and I already know we'll run out of cash before we get to the end.  I'm going to try this in a few rooms and see what happens.  Worst case, we have a thin layer of paper between the plywood and the actual wood floors.  And if it works, we've saved a LOT of money.

It looks beautiful.  I'm curious - is there some way to vent the bathroom besides a fan?  I love glass block, but I am also nutso about having a window in my bath.

@David Taylor , the liens I've purchased were not sold for anything near their market value.  I don't have the exact details, but I'd say they were a 25%-50% discount.  The closer to fair market value you get, the more you've discounted the interest rate that you are receiving because you've put more of your own money into the deal.

I've actually been hoarding cash to buy my (relative) dream house.  Now that has been completed, and we're doing renovations, I'm planning my strategy for after I have money again.  (So far, purchase and renovations have been completely funded by profits from my SFR properties.  I know, I should be putting that money back into more properties, but a family needs a place to live :)

@Ned Carey, thank you for sharing that there are successes out there.  Do you remember what year(s) those were?  It seems the market has gotten a lot more competitive over the years, but that just could be because online auctions make it easier to see who is buying.

Anything left over at this point is definitely junk.  The owners aren't going redeem them, so you've put out money to participate in the auction and/or to purchase the property, and you're not going to get any money back out of them.  They haven't been sold at the auction because they have no market value.

I've purchased a few Maryland tax liens, and I've made decent money for the amount invested, but I do better elsewhere.  By the time you pay to register for the auction (in many counties), have the interest bid down at the auction, and then only have it invested for a few months, there are a lot of other ways to make money.

Very few houses actually end up being owned by the tax lien holder, because any mortgage company will pay off the lien in order to protect their interest.  Not that it can't be done, but statistically, you would have to buy a lot of good liens to end up owning a house.  You can increase your odds by buying liens on houses without mortgages, if you have the time and inclination to do that leg-work ahead of time on the 100s of houses you might possibly want to bid on.

Please feel free to correct me if I have anything wrong here.  I'm not an expert; I've only participated in 2 or 3 sales.  I just found it wasn't worth the hassle for me.

I'm a SFR owner (but only two) who has looked into multi-families. What has swayed me, so far, is that I am spoiled by how easy my SFR. There are literally months where I don't even THINK about my properties. I know that, even with a good property manager, many units means much more work.

I could still get into a multi-family, though.  Never say never!

Thanks for everyone's thoughts and information.  It is true that I have some aversion to risk - I can't imagine not being bothered by it at all.  However, we've been very successful with our current properties and I am looking forward to expanding further.

Frank, I'm curious what you would consider a healthy balance of rental real estate properties vs. overall net worth, and why having your net worth tied up in investment real estate would be a bad thing?  Granted, I only have two properties, but they are each provide a very healthy cash flow AND could be sold tomorrow at a handsome profit.  To me, that doesn't seem like a negative.  Of course, their equity represents less than half of our total net worth, so perhaps I am just not close enough to the line to feel the risk.  Heck, I feel like my primary residence is more of a liability because it isn't generating income :)

Rachel, you are absolutely right.  I am fortunate to have a fantastic property manager for one property, and a superb contractor who basically manages the other property.

Thank you again.