Asking for some relatives. What kind of financing is available for something like that?

Thank you in advance!

Prices are near record highs.

Look very, very carefully at the renter’s rights laws in the appropriate jurisdiction.

I wouldn’t want to be a landlord at this time.




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Don't rent to any kind of lawman.

My wife and I had rentals for 30 years, one of the happiest days of my life when we closed the sale of the last one. IMHO, there is NO good time to be buying a rental.

I have two rental properties. They are wrecking me.

Good renters are about 10% of the renters.

I'm in the eviction process now and will have to do a complete exterior and interior remodel and then will sell. The place is completely trashed.

One year from now, I aim to be out of the investment property business.

There's a real estate correction coming, but where I'm looking it's only started. Waiting for some deep reductions.

Gentlemen,

Thank you for your frank comments. TimberRunner, I agree with you as far as the whole housing market is concerned, but the prices on good property are going up almost 1% a month. The house next door to us sold at the same time we bought this house, seven years ago. The folks who lived there moved to Texas in July and sold that house before it was listed for 220% of what they paid for it. If there is a correction coming it will be a big one…

Are ya ready ta be your own electrician, plumber, roofer, and a/c tech, all in the middle of the night?

Whilst you're bein a lawyer durin the day, throwin families out inta the cold just because they couldn't pay the rent?

Are ya gonna throw people out, just cause they just missed one month rent?

We bought a 4 bedroom house this past May and are renting to my sister in law and her two kids.


She's a good person and I have zero worries about her not paying rent. The only reason we bought it is we have a fair amount of extra income(relatively speaking...) and needed to put some money into something. And the house she was renting from my parents was only a two bedroom. My mom and grandma have 10 rentals so I know all about the random chit that goes on.


It's sort of a piggy bank, it is NOT a money making deal as we are giving her a sweet deal on rent. It basically keeps me from spending money like an idiot...lol


And in our little town prices never really got crazy, sure we overpaid a little but we have an awesome location and I'm not worried about future resale.

It was $190k and we put 60k down.


That said, no way I would have been buying pretty much anywhere else in the state, things are cheap out here...lol


We have a 20 year loan at 5.25%, fixed for the first 10, variable for the last 10. Plan is to pay it off in 5-10 years so not concerned about getting hosed by the bank.

Wife and I rented a couple of houses we had; not "rentals" per se, we didn't get them to rent, they were just extra houses we had so we rented them out long term to the right people. It all worked out well for us, but it was a temporary thing. We came out ahead both times, but a taste was enough. I would not want to be in the landlord business long term.

Bad renters are usually due to bad landlords.
Due diligence, check references etc. Routine scheduled maintenance visits (“change the filters”) to keep an eye on your investment. Wife makes the rounds to collect rents on a set day every month. Stops all the “I mailed it” bullscheit excuses. We’ve had to evict one time in 15 years.

Best decision we ever made was buying/owning rentals. Passive income and an appreciating asset that someone else is paying for, for you.
Run it like a business (because it is) don’t get personally involved or attached with renters, NEVER rent to family or friends.

Last week I checked on financing for a duplex that was a reasonable deal. The interest rate on a commercial loan, 20year amortization, was cheaper than a 30yr FHA loan. Crazy times.

I'm planning on buying/building some multi family as prices come down. Yes, they are going to come down. Building will get cheap and that will put pressure on existing homes prices. Lumber has already pulled back, but everything else is still higher than Willie Nelson.

What was the rate?

Lumber has pulled back but other materials have not. I hope they follow .

5.1% and at that time a 30yr was close to 6%

Thanks, that's right in with the deal we got.

I'd advise they wait a year, or two, and see what happens.

Interest rates have a big effect on real estate values, but real estate takes time to find the new equilibrium.

Figure the real estate bottom will be 2 years after the stock market bottom. Don't know if stocks have bottomed, but I'd guess not.

Everyone has an opinion, that is mine. dvnv

Locally there is money to made on bare property. Even though housing is tough and rentals are doing well, I'll never do the rental deal. Were around a lot of renters during our early poor years and saw very few that I'd want as customers.

I’d remember one thing listening to advice on the internet from randomly placed strangers, every AO is different. Lots of factors that impact the housing market, it’s not like the stock market, commodity or bond markets etc. which exist with no regard to geographical location.
A rural, desirable area close to an urban hub with low inventory can’t be compared to thar same urban hub people are fleeing or the locales that have seen property values triple during the pandemic. There are isolated bubbles that WILL burst, but many more places that won’t and will at the worst plateau and at best still appreciate at a more reasonable level.

Wife and I are invested in the stock market only for tax benefits and the fact she worked for a company that offered 2:1 match up to 7% in a 401k for years.

If it weren’t out of necessity, I’d have put every dime into real estate without hesitation.
My uncle who was as close to a mentor as I ever had always told me stocks were nothing but a piece of paper, buy land. Even if it crashes in value, you can still take a piss or plant a potatoe on it.

Good luck. I was a landlord for a couple of years. Never again and no amount of money is worth it.

I’m closing on one this Friday in Kentucky.

Closing costs are a booger. Everything I thought was a ripoff gotcha fee 10 years ago is now double.

Shewww weee, Investment property. I gotta haul $27,000k Large to closing 😳


On the other end of these things. I got a tenant calling me this morning with a said story regarding his late rent. Tomorrow…hmm, we going on to the Fourth of the month cap’n.

Don't buy in any town that Starbucks is leaving.

This town has never had a Starbucks…

A very good friend and lodge brother of mine owns about 5 rental homes. He's been screwed over pretty bad by bad renters a few times but the worst was a girl in her late 20's a few years ago. She had 2 little ones and supposedly fell on hard times so he felt bad and cut her a break for about 3 months and she kept coming up with excuses to not pay so he finally went through the eviction process. It pissed her off bad enough that she went to the pet store and bought a bunch of cockroaches, released them in the house, cranked the heat up as high as it would go (in the summer btw,) AND poured sugar throughout the house. It got so hot that some of the paint started to peel from the walls and he had to get the place completely fumigated after having it sprayed a few times failed. People are [bleep].

You can buy cock roaches at a pet store? JFC…..
and this one time, my cousins brothers uncles mom had this rental and blah blah blah.

I had no idea that so many people found something this reasonably easy so hard.

Jackmountain, you have described the locale of this property to a “T”. A small, bedroom community with a major 4 lane into the largest city in the state. Thirty minute drive, tops. The house is a nice 1950’s bungalow style with lots of improvements but it is in need of some interior sprucing up.

Lots of good thoughts so far. Really appreciate the rates and term info. Kind of surprised that it’s still pretty reasonable.

Thanks again!

I seen that one.... bow chicka wow wow.... I'd be doin some trading with her fo sho. 😉

Place not too far from me sells them along with crickets and other bugs for lizards to eat, I guess. Ain't making that story up either. I remember when it happened and how pissed he was. He said he'd have been better off just letting her live there all year compared to what it cost him to recoup from that.

Regarding closing costs, I was actually surprised at how low it was.



Less than $1500, closer to 1k.

My rental is currently working out and my plan is to rent the place for three more years and bulldoze it and lit up a high end duplex. Sounds crazy but I think it will work long term.

I will say that the people who do really well with rentals in my area charge a ton in rent. They rent to nurses, doctors etc at prices I think are insane. But they have high end stuff.

There's more options for owning rentals real estate than retail residential. There are plenty of commercial options with a much lower hassle factor.

Father-in-law and mother-in-law had 3 rentals -- her's was the big farm house on her 55 acre farm (the acreage was rented to a local farmer) and his was two houses on the same lot in a small town - one, a small one bedroom cabin, he built himself after buying, remodeling and adding another bedroom to the main house.

They had their share of 'challenging' renters over the years with around 2 evictions that I can recall. One eviction was a mother and her grown daughter who had a mixed race baby rented the little cabin. After paying the rent for the first month or two they simply just quit paying rent altogether. After several failed attempts father-in-law insisted on payment or move out the mother threatened he and wife with racial discrimination charges claiming they were evicting her because her daughter had mixed race baby. Scared them so bad they never rented the cabin to anyone ever again - they just used it for storage from then on.

My wife inherited his rentals. Same family had been renting the main house for well over a decade. Mom - a beautician and school bus driver, dad - a carpenter, a couple of late teen boys and a daughter. Seemed to be okay average working folks, a little late with rent sometimes but always eventually payed.

Not much over a year after wife inherited her dad's rentals I happen to see on the local news a big meth lab bust and the live video showed yellow crime scene tape around wife's inherited property. Turns out the whole family was involved in making and selling meth. We immediately evicted them.

Cost us a few thousand to get property cleaned by hazmat certified professionals which is mandatory in this state.

I’ve not had anyone too difficult to get rid of, my thing has been with people leaving a big mess on the way out.
And not really tearing up anything.

Just dirty people, many times willing to forfeit whole deposit just because “they didnt feel like cleaning it up”

I tell them at move in, make it look like this when you leave and I’ve you your deposit back. That’s a TOUGH concept

We take pics at move in so they can remember.

Ole girl last month gave me a $1000 to mop/sweep and haul some nasty furniture away. Stove and fridge was nasty too. Oh well
She said she just didnt have time. lol

as was mentioned earlier......don't rent to family or friends.

Cash deals have lower closing cost and goes a lot quicker

The nicer the unit, the better you maintain it, the better tenant you get (if you do your work checking background/references). We got rid of the section 8/bad side of town [bleep]. Too many people don’t want to put I. The work.

Had a friend who’s family was in the rental business big in the 90s. If somebody didn’t pay after a month of hearing excuses, putting them 2 months overdue, they’d go knock on the door “hey look, I know you’re facing hard times, down on your luck. If you are moved out and leave this in good condition by the end of the day Sunday, we’ll give you $500 cash just to help you out and that way we don’t have to go through the eviction process.”

Said most of the time it worked. The delinquent renters would come by Sunday night and ask for the $500.

“Yeah, we are going to apply that to your back rent, just get us the rest when you can”

Said nobody ever burned their house down afterwards, but they kept up on insurance just in case.

Gotta weed out the riff-raff. The more you charge, the more you eliminate.

I bought a couple of rentals 8 or 9 years ago. They've gone up 3-3.5X since I bought them. I use a good property manager. He does a good job checking people out. He also has a deal that for $5.00 per month per house, if someone needs to be evicted, it's on him. He'll take care of it. Of course you don't want to live in a liberal state, where the owner has no rights.

So they've gone up in value, gotten rent virtually every month for all that time. Maybe missed 3 months due to short notice with people leaving and you aren't going to get it rented out again until almost the end of the month so they can move in on the first. You are going to have more maintenance in a rental but you have to plan for that. When you are ready to move up, which I plan on doing, a 1031 exchange and buy 2 duplexes or a 4 plex next year with the money from the rentals. That way you avoid capital gains. Basically in stead of 2 rents a month I'll get 4 of them. That works for me.

You need to be sharp with your money, and hold your property managers feet to the fire, and plan on replacing carpet or painting or what ever every so often. When they move out is the time to do that, and up the rent when the next folks move in. That's necessary even for personal homes. Virtually anyone that decides to sell their home, are going to have to do some maintenance on it. No difference. Paint and maybe flooring. Plan on it if you want top dollar.

Next I've got to go along with Dave Ramsey, you make money (especially in a market like this) when you buy the property, if you buy it right. Make have to make several offers before you get one. I paid cash on the first one and put 50% down on the second and paid it off quick. You also need to save some of the money for property taxes and insurance. I also have a large umbrella policy which is the cheapest insurance you can get.

Something to watch out for, is that there is going to be a flurry of foreclosures coming up, because the government have asked the bank to prevent foreclosures from happening. Keep in mine that, not every foreclosure is a good deal. Most will end up going for market rate. Don't hold your breath to buy when (because you think) the floor is going to drop out of the housing market. Make your best purchase, when interest rates come down, refinance. That's the plus to paying cash, you don't worry about interest rates. Don't forget, do your homework and due diligence. Good first question to ask is what's the vacancy rate in that area. Hopefully it's below 5%, I prefer even lower.

I am also thinking of buying but recent advice got me thinking otherwise.

Large corporations inflated the cost of a home by buying up properties which of course impacts the price.

Zillow was the first one that literally paid over cost to start driving up prices on things they already owned - it finally bit them in the tail and they had to write off the loss - but that’s it - they get to write it off… people do not…

Now you have million so of vacant homes owned by corporations with the price being too high…

Loan wise if you own under 8 you can get a regular loan vs. a higher rate business loan, but still things are way high price wise and starting to correct themselves, but given corporations can write it off and tolerate holding them … it’s going to be a while.

Local guy builds 2-300 unit complexes and flips them one just sold for $70 mil another $100 mil

Gentlemen,
Thank you again for some very good advice generously given!