All Forum Posts by: Robert Clifford

Lan,

there may be people that don't have the credit to get into a home at $2000/mo so renting may be a good option but the number of people looking to get into a manufactured home is definitely a smaller group of people, making it harder for you to rent out that type of property. This is where a property manager can help you and advise you of what to get into. I would suggest that if you're willing to look at Anaheim while you're in SF, then why not look at a place outside of California for investment opportunities where the market is still not so high? 

Also, assuming that your calculations are correct, there are a number of other expenses that you have not accounted for. So in reality, I think that you're overestimating your ROI.

While stationed overseas in the US Military, I began to read bigger pockets and educate myself about real estate. While overseas, I built a real estate team in Georgia, a place I have never been, and I acquired my first house that cash flows at a rate of 26% cash on cash return. Thanks bigger pockets!

Cathy, the benefits of an apartment complex vs a SFR is diversified income. If one tenant leaves, you only lose a certain percentage of your cash flow. However you are still secure because you have a number of other tenants still paying for rent. With a SFR, if you lose your one tenant, you lose 100% of your cash flow and you will be stuck paying all expenses. So, owning apartments is inherently less risky. That all being said, you must be a more active property manager and there is more to manage as an apartment owner. Of course you can hire people to do that for you but that eats your profits and they may not do the job like you would want them to.

Nathan, you never want to take negative cash flow, ever. There are still rare deals to be found in LA/SoCal, but all indications are saying that the market has reach a peak again. If that is the case, it's likely appreciation will stall/reverse too. My suggestion is to look elsewhere.