Buy and Hold??? - Posted by Gary O

Posted by GL(ON) on March 04, 2002 at 21:02:01:

A townhouse is the same as a row house. In other words, a row of houses each with its own private entrance and its own roof and front and rear walls but sharing the side walls with the adjoining houses.

A condo apartment is in an apartment house in which the tenants own their individual apartments.

Buy and Hold??? - Posted by Gary O

Posted by Gary O on March 04, 2002 at 10:14:11:

Hi Y’all,

I posted a message Friday about my current goal. I got some good responses and one that was not so good. However, I don’t think I explained my topic very well either. This post had two parts 1) my goal and what do you think and 2) Condo units as an investment.

First, my goal is to aquire enough rental property to where the income from the rentals out does my current JOB’s pay. I would like to do this within 3-5 years, however, like goals should be, this is flexible. The reason why I think rentals is a good idea is that it appears to be secure way to go. Correct me if I’m wrong, but I would think that in flipping you could have a good month and a bad month, but if you owned 40 units collecting rent then you have a pretty good idea of what you could expect month to month. I realize that you may have renters that don’t pay, but if you did your homework you would have calculated those situations as an expense and held money out for that. My goal is to not JUST own rentals, but to focus on that first so have that security of the monthly income (so I can feed my 3 kids) and THEN start rehabbing and flipping (icing on the cake if you will). With all that said, to get started, I have $140,000 in the bank (clear), and I have $150,000 easy in equity in my own home. What is your opinion on this approach. Remember I’m thinking long-term, NOT get rich quick. I’m looking for someone (renters) to pay for my net worth and monthly income over time. Rents usually always go up while your mortgage is getting paid down.

The second part is about the idea of investing in condos. Has anyone had good or bad experiences with them? No, I do not want to focus only on condos, I just ran across a few that seam to be good investments. They are in large complexes and have excellent HOA’s. I worked the numbers and they will cash flow just as well as some SFH’s. The only difference is, is that as an owner I’m only responsible for what’s inside the walls. I wouldn’t have to worry about roofs, plumbing, landscaping, ect. Just keeping the place rented. What are your thoughts on condos?

I know this is a long post but I hope to get a lot of different opinions on these topics, and yes I will check out the book by David Schumacher.

Thanks for your time CRE Online community!!!

“Landlording”… - Posted by David Krulac

Posted by David Krulac on March 05, 2002 at 18:42:54:

is a good book by Leigh Robinson, I think he up to the Ninth edition. It is the best book on landlording imho.

David Krulac

Re: Buy and Hold??? - Posted by Jim Rayner

Posted by Jim Rayner on March 04, 2002 at 12:40:48:


Your Goals are very reasonable and well with the realm of reality. I am a buy, rehab and hold investor. I started in condos in late 1995. I only did condos for my first three years. I was then and still do work a full time job. My goal at that time was to put together a portfolio of held properties that would through off enough cash flow for me to support my dad who was about to retire without benifit of a pension other than social security. By the time I had acquired the 11th condo we were generating approximately 6K per month positive gross cashflow.

Funny thing happened along the way I met Terry Vaughan and Ed Garcia. They made me open my eyes to other investment opportunities. Today I hold 45 Units in a mix of condos and apartments. I started out with 113K in cash, that has been rolled over 5 times now and my holdings exceed 4 million in just this short period of time. If I was not supporting two other full time partners I would have retired already.

As far as condos as a investment I say that in the right market carefully selected they’re great. I have sold a few off along the way and current only hold 8 of the original 11. Those that were sold were sold for 2 times what I paid for them and I currently have another on the market for 3 times what I paid for it.
Just do your homework when your buy them.

If you run an archives search on my name you will find more about my story. You will also find 2 success stories that I wrote.

Good Luck

Re: “Landlording”… - Posted by Richard

Posted by Richard on March 05, 2002 at 22:43:35:

As a fulltime landlord/investor for the last
16 years Landlording is the bible.
Except no other God.

Re: Buy and Hold??? - Posted by Gary O

Posted by Gary O on March 04, 2002 at 14:27:25:

Thanks for the follow up, your post was very encouraging. I have a couple of questions for you though, if you don’t mind. What books or materials on landlording did you study? Is there anything I could find at Barnes-n-Noble that you would recommend.

Also what type of net cash flow do you aim for in your rentals, after all expenses (PITI, vacancy, management, ect.).

Thanks again,

Re: Buy and Hold??? - Posted by Jim Rayner

Posted by Jim Rayner on March 04, 2002 at 17:06:45:


I have been a property manager in form or another for 26 years. I learned mostly from the school of hard knocks. I have very few books in my library on landlording. There is a great web site that you might want to spend considerable time reviewing. I have most everything that Jeffrey Taylor has out their for materials.

As far my target criteria for evaluating investment opportunities I guage each deal on severval criterion. Each investment must stand on its own and it must not be detrimental to the hold portfolio. To keep things on a simple level each property must produce on its own the following cash on cash return at each of the equity positions:

Hope this helps

Re: Buy and Hold??? - Posted by GL(ON)

Posted by GL(ON) on March 04, 2002 at 15:50:33:

What you describe is a very good way to accomplish what you desire. It is being done all the time. It may not be glamorous but it works, and in the long run it works very very well.

About the condos, they are very good for what you want to do. Some investors have done very well buying nothing but condo townhouses. Reason, they bring in almost the same rent as a house but they only cost about 3/4 as much to buy. Result, more positive cash flow. And the condo association takes care of a lot of the routine maintenance so you don’t have to. Watch out for the condo fees though. Some are badly managed but some are well managed. If you find a good one you can buy up several in the same complex, and make a habit of distributing flyers regularly.

By the way I must emphasize again that I am talking about condo townhouses which are quite different from condo apartments. Condo townhouses are excellent, while condo apartments are not a good investment as a rule.

Re: Buy and Hold??? - Posted by Jeff in MKE

Posted by Jeff in MKE on March 05, 2002 at 21:23:54:

Hi Jim,
Just a quick question.
Are your ROI numbers based on your Gross rental income or is it based on the positive cash flow,after p.i.t.i.
maintenance,managment,and vacancy?

Re: Buy and Hold??? - Posted by Gary O

Posted by Gary O on March 04, 2002 at 17:16:08:

What’s the difference between a condo townhouse and a condo apartment?
Thanks again,

Re: Buy and Hold??? - Posted by Jim Rayner

Posted by Jim Rayner on March 05, 2002 at 23:02:37:


the ROI’s are gross profit after all expenses(fixed and variable) and debt service. The roi represents the return my investment into the deal (either pledged equity or cash).