All Forum Posts by: Tom R.

Im researching a couple of properties and the Zillow estimate for rent seems really low. There are now other houses currently available for rent in the area with the same number of beds and a similar sq footage. Almost everything is apartments in the bad part of town or large houses in the mid to high income areas. I checked craigs list and there are only apartments listed. Rentometer is comparing the homes only to apartments. The only idea I have left is to ask my realtor if she can provide me info off the MLS. Does anyone have any suggestions?

In a 1 square mile area of a region I am looking at investing in there are 5 houses listed between $100k and 130k. In the past 6 months there haven't been any homes sold in the area for much more than $85k. One such home has been on the market for 80 days and had the price dropped twice to $109k. I'm considering making a low ball offer. The owner appears to have purchased it wholesale in march and put a lot of work into it. I believe the home has a market value of around $100k.  I'm considering offering $75k or 80K. I know that I shouldn't fear making too low an offer and getting turned down I'm just not sure its a good way to start a relationship with my realtor.  I've already got one lined up and looking for the kind of deal I'm looking for. What are your thoughts?

@Ali Boone I understand what you are getting at. I was focused only on total cash flow. Paying off my loans give me a guaranteed $584 per month bump in cash flow for what would be the remainder of payback period (6-9 years depending on the loan) whereas the properties I've run the numbers on only give me $200-400 in cash flow if I can maintain a 8% vacancy rate and maintenance stays below 10% but that is for as long as I own the property. My interest payments on the loans are relatively low between 3 and 7%. I think I currently pay about $130 in interest every month. In the long run a rental property could be a better investment as long as I choose wisely.

Hello everyone. I'm Tom from California. I recently decided to get into real estate to produce some passive income.  My plan is to purchase single family homes priced up to $100k with at least a 12% cash on cash return. I've been saving for a down payment for about 5 months.  I got most of the way before I realized it might be better to pay off the remainder of my student loans first. My payments are $584 and I only owe about $37000.  That's pretty much the same amount of capitol Id need to buy a $100k house and get it renter ready. I seriously doubt I could find a place that would produce that much cash flow in my price range.  Until I have enough money to pay off my loans in full I will keep saving for a down payment just in case a golden deal shows up. I would consider using OPM to finance my investments but I don't know anyone who has that kind of money.