Re: Did you pay $210K cash for 12 units? Time to talk to Ed Garcia! - Posted by Millie I.
Posted by Millie I. on April 09, 2000 at 24:12:33:
How did you know this was a good deal? What state are you in? What is the fair market value for each 4-unit before upgrades? How much do you have to spend to upgrage per unit? and how much can you sell them for after the upgrades, holding costs, and rental & selling expenses. Personally, I won’t pay out that kind of cash, or flip so quickly unless I can make at least $100K profit right away, otherwise you may be throwing away a gold mine.
If the properties can bring in sufficient positive cashflow, you should try to refinance to get most of your money out, let the rents pay the mortgage and give you a monthly profit for the next 15 years or more. Using OPM (Other People’s Money) like a mortgage loan is the best way to minimize your out-of-pocket costs, and maximize your ROI (Return on Investment). You should always try to use as little of your money as possible to create as much income as possible. There are landlords in this group that nets over $100K profit a year from rents, do you think they worry about tenant problems?
If you don’t want to deal with tenants, you can hire a property management company to handle it for you. There are a lot of professional landlords here that started just like you, scared of tenant problems, but as years go by, and experiences build confidence and expertise, they don’t see them as problems anymore, just day-to-day operations. You don’t see veteran landlords complaining much, just budding landlords, why? because the longer they deal with tenants, the more control they have over the business, and less and less tenant problems they will have. Check with MR. LANDLORD to learn about Landlording.
When you see the money pouring in month after month, a few hours of customer service a week is gonna be well worth the trouble, but you must be smart enough to learn from the winners, not from the cry babies or weak hearted wanabes that always have a reason not to do anything.