All Forum Posts by: Trey Fletcher
Trey Fletcher has started 1 posts and replied 4 times.
Post: Smokies: The juice still isn't worth the squeeze
- Posts 4
- Votes 4
This!!! 1000x this!! You should never compare the cash on cash return of a real estate investment to another interest-bearing investment account. It is comparing an apple to an elephant.
appreciation, principle pay down and tax advantages all must be taken into account as part of the return for your “headache”
Quote from @Yitzchok Carmen:
Quote from @Collin Hays:
We are seeing asking prices at approximately 10-12X the trailing twelve months rents (only rents). That's too high. This is why there is so much inventory, and so few takers.
My measuring stick is "Would this be a good investment for a cash investor seeking income?" The answer is, not particularly. If I have $500,000 to invest and am looking for income, I can draw around 4 percent from a high yield money market brokerage account through Schwab or Fidelity. That's $20,000 a year without lifting a finger.
If I take my $500,000 and invest in a Smokies cabin earning $50,000 a year, I am buying a part time job and probably only netting $27,000 to $29,000 per year after the following expenses:
Insurance - $3500 per year
Taxes - $2000 per year
Utilities - $6000 per year
Repairs & Maintenace - $7500 per year
HOA fees - $2000-3000 per year.
Total expenses: $21,000-$23,000 per year
If I can earn $20,000 per year on my $500,000 with virtually no risk and no effort, versus another $6-8K for much more risk and headache, the juice isn't worth the squeeze.
This is also why generally in RE the game is played with OPM bc most real estate returns are pretty mediocre when all cash is used.
But another factor that is not included in your math is the fact that your property will probably be worth triple in 30 years while your money market account will not
Post: 7 SFH rental portfolio in Durham, NC - Available Seller Financing
- Posts 4
- Votes 4
Long story short my mom has brain cancer and I am her POA so I am beginning to look into simplifying her finances and estate.
She has 7 paid-for rental properties in Durham, NC that are worth probably around $200k each and brought in $72k after all expenses last year. Rents under market because mom never kept up with market rents as long as people were in the houses and paying on time.
I would be interested in talking with anyone who wants to put together a deal for this portfolio using seller financing so mom has some income to pay for her medical expenses moving forward without the hassle of replacing roofs, HVACs, etc. Basically, want to move mom from the investor position to the lender position if possible.
I am willing to do a pretty low down payment and good interest rate because this is about the monthly income to me. All terms are negotiable but just for example....
$1,400,000 ($200k x 7 houses) x 5.875% over 30 years with maybe $50k down would leave us somewhere right under $8k a month for P&I.
@Becca Lavin @Patrick Knapp I am from the area born and raised. My primary residence is in Youngsville but my rentals are in Fayetteville and Columbus, GA.
Post: Anyone buying real estate in Wake Forest, NC?
- Posts 4
- Votes 4
@Scott B. I am an investor in the Wake Forest area. It is still fairly affordable to get into no matter what your strategy is. I bought a house built in 1982 to house hack and updated everything (bathrooms, kitchen, flooring, and paint) then finished the basement. I am probably all in at 330k - 340k and could sell today for well north of 400k. There is enough here rental demand to do buy and hold or fix and flip if you wanted to sell it and keep moving.