Quote:
Originally Posted by turbo6bar
Buying non-inflation protected 30 year treasury bonds is risky, but lots of folks do it. The primary difference is that I don't have access to a printing press. 
I see what you guys are saying. My perceptions are unrealistic. I know real estate inside and out. I'd rather have MY money in something I control, generating a stable return. That's me. Conversely, I'm expecting granny, who knows nothing about real estate to buy into my idea. I can see where she needs a high return, and all I can say is good luck to that. I'd buy a property for $95k, invest another $5k and 3 weeks worth of labor. That property would show a cap rate/return of around 11%. Then, I'm supposed to not only invest $30k of my own money, but also pay granny 8-12% for her money. I can quickly see I am not investing, but working for someone else.
Oh, well, back to the drawing board.  |
Maybe you're working a little too close. People I know are buying behind cost of build by a factor of half and the land is free. Problem is, if they were worth selling, they'd be sold.
So renting is the model. To get a good return at rental rates, you can't really afford to be working on borrowed money.
You'd be better off taking a commission for setting up these deals. And, you can make a little off the repairs. Plus you could become a property management company. The tax advantages go to the client which is a good sales tool rather than trying to hold title to all of the properties yourself.
Over time, you could pick off a few for yourself. I'm sure you will attract investors as you go about expanding the inventory if you do a good job for your clients.
That's how it works in CA these days.