Any plan to buy real estate this year...

[Splenda88]

Forgive me but you did ask what other’s plans were, correct? Were you wanting people to tell you what YOUR plans were?

Yes some people have $500k cash to buy a house, but $500k is arbitrary and not the minimum for a house.

True though... just wondering what people think about the housing market.

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[CDI]

I’ve bought one Class A property every year since 2016 (2nd yr of residency).

Still own all of them and all rented well.

Changed direction this year and rather than be a solo investor, which overtime becomes a nuisance to even remember all the HOAs, insurances, etc - I started up a RE fund to leverage and scale up.

Have a group of investor friends that I pulled together. Got a bank to give us a commercial loan to start off small but we’re now buying 2 properties in 2021.

Update:

Did a 1031 on one of my properties since this message. Has worked out well.

The fund ended up going all-in on a larger syndicate which will likely result in a return of capital (and wasted time). Rate hikes killed that opportunity.

 

[tartesos]

I wouldn't do it in 2021 UNLESS a massive crash happens, or UNLESS you find an amazing deal. RE waxes and wanes in 15-20 year cycles. 2008 was the last crash. Right now we are experiencing the peak IMO. Every street corner has 'Houses for Cash' signs. That's dumb money. NEVER compete with dumb money. Keep your powder dry, and wait for a crash. Remember that it may take years or even decades. Actually, depending on how much money you are getting from rentals, how much you expect the properties to appreciate and what your tax situation is, you could consider SELLING right now.

This aged like milk 😬

 

[tartesos]

There is a such thing as a bad time. Given the current uncertainties in the market, I wouldn't feel now is a good time. Houses are being bid up far higher than they're worth due to the temporary flood of cash from the stimulus. Once all that stimulus cash has worked its way through the economy and the supply/demand equations start to balance out again I'd be more inclined to buy. Otherwise I'm just leaving my cash in a fairly diverse stock portfolio.

🙃 it wasn’t that bad a time after all.

Still best time was yesterday. Second best time today

 

[CDI]

This aged like milk 😬

Yeah, fortunate for those holding residential 30 Yrs. Not so much for folks holding onto ARMs.

I’m bummed because my primary was bought using a physician home loan in 2020, but using an ARM. Would’ve been awesome to keep this long term as a rental, but will probably have to offload it since the cashflow won’t be worth the headache once the rates adjust upwards.

 

[CDI]

I would love to buy another property and have money sitting on the sideline. The market in my area is nuts but next yr I may think 2021 was a bargain.

My goal was eventually own 25 properties in the next 10 yrs but doubt I will make it but probably be able to hit 15 easily.

How close are we now?

 

[tartesos]

Yeah, fortunate for those holding residential 30 Yrs. Not so much for folks holding onto ARMs.

I’m bummed because my primary was bought using a physician home loan in 2020, but using an ARM. Would’ve been awesome to keep this long term as a rental, but will probably have to offload it since the cashflow won’t be worth the headache once the rates adjust upwards.

I had a 2.6 rate on my primary but sold it this year as I was downsizing, was fortunate to find a great deal at a great time.

I’m not buying anymore real estate this year unless a killer opportunity presents. Met my goal and sticking to it.

 

[emergentmd]

How close are we now?

Not close at all by choice. I have pivoted into higher valued properties, Syndications, and business RE. SFH/Duplex rentals started to become a headache eventhough I had property managers.

It was a good beginning when I first started in RE but now feel my time is more valuable and rather be in higher RE properties/vacation homes. Cash flow likely not as good but less Headaches.

 

[worthless]

I got up to 30 and have kept them. Owe about 50% on them, mostly at good interest rates. No plans on offloading them.

I too have now pivoted into buying clinics. I own 5 now and plan on more.

 

[CDI]

I got up to 30 and have kept them. Owe about 50% on them, mostly at good interest rates. No plans on offloading them.

I too have now pivoted into buying clinics. I own 5 now and plan on more.

Borrowed against your dead equity when scaling up, or did you accumulate 1-2 per year with discretionary capital from W2 gig?

The amount of capital needed to continue buying properties even with low LTV/rehab potential, and maintaining the reserves needed has been a challenge for me. (In a VHCOL area with 3 small kids…)

Envisioned myself getting to 10 SFRs while maxing out on traditional lending, but I stopped out at 4 properties and pivoted to alternative investments over the past few years.

Jury still out on if that was a good move or not…

 

[tartesos]

I got up to 30 and have kept them. Owe about 50% on them, mostly at good interest rates. No plans on offloading them.

I too have now pivoted into buying clinics. I own 5 now and plan on more.

Clínic buildings or the business? Absentee or actively participating ( I can’t because of my job).
Interesting and would love to hear more.

Congratulations!

 

[tartesos]

Borrowed against your dead equity when scaling up, or did you accumulate 1-2 per year with discretionary capital from W2 gig?

The amount of capital needed to continue buying properties even with low LTV/rehab potential, and maintaining the reserves needed has been a challenge for me. (In a VHCOL area with 3 small kids…)

Envisioned myself getting to 10 SFRs while maxing out on traditional lending, but I stopped out at 4 properties and pivoted to alternative investments over the past few years.

Jury still out on if that was a good move or not…

I wanted 20 doors in 10 years, started in 2018 so was lucky.

I am not a fan of sfh on a mortgage but I can be picky as my market is lcol and cheap.

I am so afraid of over leverage that I have a lot untapped equity.

 

[worthless]

Borrowed against your dead equity when scaling up, or did you accumulate 1-2 per year with discretionary capital from W2 gig?

The amount of capital needed to continue buying properties even with low LTV/rehab potential, and maintaining the reserves needed has been a challenge for me. (In a VHCOL area with 3 small kids…)

Envisioned myself getting to 10 SFRs while maxing out on traditional lending, but I stopped out at 4 properties and pivoted to alternative investments over the past few years.

Jury still out on if that was a good move or not…

I’ve done both. Initially leveraged with W2 and the equity grew from appreciation especially with this last spike in 2020-2022. Have borrowed against it for other houses. Have also refinanced to the low rates that were available and keep them rented them out.

 

[worthless]

Clínic buildings or the business? Absentee or actively participating ( I can’t because of my job).
Interesting and would love to hear more.

Congratulations!

The businesses themselves and in some cases the real estate as well. I’ve found the businesses have the most income potential.

 

[Chemist0157]

We bought a townhouse over the summer. First investment property. Lot of work but should be cruising now. We are doing midterm stays, 1 month minimum, hoping to just rent out to medical folks relocating or travel nurses. It is going okay so far. It is a couple hours away which is an issue, but where we are is not very friendly to RE investment (more expensive, more rules, etc). We do have people nearby (handymen and friends) to help with anything so it's good to have some community. My expectation is to have just an occasional bump in the road. Since the fall, we paid a guy to fix a very simple door issue and a very simple washing machine issue.

I would not have done this if it were just me, but my wife has wanted to do it for a long time 😅 I would rather just do stocks. I do think this is the right thing to do long term, and she has time to do the troubleshooting.

Do not do this if you are a busy doc and/or do not have any interest in RE. The returns are not SO great as to give up some quality of life.

 

[Mad Jack]

🙃 it wasn’t that bad a time after all.

Still best time was yesterday. Second best time today

Yeah this turned out to be unprecedented times in both the stock market and the housing market. Every indicator continues to blare and yet the economy continues along. Even my risk-averse self has become numb to the negative indicators

 

[worthless]

Just reached 35 doors (16 SFHs, 7 Duplexes, and a 5-plex), including primary. Cashflow isn't great mostly because of aggressive mortgage paydown (most at 10-15 year payoffs), but certainly net positive including my primary which of course pays me no rent. So essentially I'm living for free.

About $45k mortgage paydown per month. 3 properties worth over 1 million, 1 at 900-1M, and 1 over $2M. Up from 8 total properties 4 years ago, with the most expensive properties coming after that time. 2/3rds in HCOL area and 1/3 in MCOL area. Managed through an assistant and employ 3 laborers/maintenance and 1 direct assistant who more or less serves as manager of them.

We're anonymous so thought it fair game to post. It's interesting to look back on after becoming worthless (net zero) about 10 years ago.

 

[tartesos]

Just reached 35 doors (16 SFHs, 7 Duplexes, and a 5-plex), including primary. Cashflow isn't great mostly because of aggressive mortgage paydown (most at 10-15 year payoffs), but certainly net positive including my primary which of course pays me no rent. So essentially I'm living for free.

About $45k mortgage paydown per month. 3 properties worth over 1 million, 1 at 900-1M, and 1 over $2M. Up from 8 total properties 4 years ago, with the most expensive properties coming after that time. 2/3rds in HCOL area and 1/3 in MCOL area. Managed through an assistant and employ 3 laborers/maintenance and 1 direct assistant who more or less serves as manager of them.

We're anonymous so thought it fair game to post. It's interesting to look back on after becoming worthless (net zero) about 10 years ago.

Congratulations!
That’s impressive.

At that level I’ll tell you a story I learned recently, have no reason to doubt the guy.
You can’t sell yourself a property to put into an Ira and that includes family.
This guy paid off some of his houses then found another investor and they sold some properties among themselves to a self directed IRA ( at cheaper prices) , he was in his 40’s, so he had 20+ years of tax free rent and appreciation.

 

[worthless]

Congratulations!
That’s impressive.

At that level I’ll tell you a story I learned recently, have no reason to doubt the guy.
You can’t sell yourself a property to put into an Ira and that includes family.
This guy paid off some of his houses then found another investor and they sold some properties among themselves to a self directed IRA ( at cheaper prices) , he was in his 40’s, so he had 20+ years of tax free rent and appreciation.

No kidding? I'll have to look into this. I'm also in my 40s.

 

[emergentmd]

Just reached 35 doors (16 SFHs, 7 Duplexes, and a 5-plex), including primary. Cashflow isn't great mostly because of aggressive mortgage paydown (most at 10-15 year payoffs), but certainly net positive including my primary which of course pays me no rent. So essentially I'm living for free.

About $45k mortgage paydown per month. 3 properties worth over 1 million, 1 at 900-1M, and 1 over $2M. Up from 8 total properties 4 years ago, with the most expensive properties coming after that time. 2/3rds in HCOL area and 1/3 in MCOL area. Managed through an assistant and employ 3 laborers/maintenance and 1 direct assistant who more or less serves as manager of them.

We're anonymous so thought it fair game to post. It's interesting to look back on after becoming worthless (net zero) about 10 years ago.

Congrats. Once you pay it off, you are just living off passive income then have a great legacy to hand off to someone/kids.

I was about 45 when I started in RE. About 3 years ago, peeked at 6 duplexes, 1 SFH next to a major university, 3 STRs. Goal was to have 25 rental properties in 10 years which seemed reasonable with just purchasing 1 per year. Once I hit 10 homes, the juice was not worth it anymore for me b/c my business income dwarfed rental income. I divested and now own 1 duplex, 3 STRs, 1 home on 3 acres, university SFH, SFH that I don't rent. I moved from lower valued rentals to higher valued rentals. The Cap rate is less but got tired of renting to the lower income population.

I don't think I will buy any more real estate unless something special comes up which seems to always happens. As I got older, time becomes more valuable than money. I rather play golf than grind on more rentals.

 

[Splenda88]

Congrats. Once you pay it off, you are just living off passive income then have a great legacy to hand off to someone/kids.

I was about 45 when I started in RE. About 3 years ago, peeked at 6 duplexes, 1 SFH next to a major university, 3 STRs. Goal was to have 25 rental properties in 10 years which seemed reasonable with just purchasing 1 per year. Once I hit 10 homes, the juice was not worth it anymore for me b/c my business income dwarfed rental income. I divested and now own 1 duplex, 3 STRs, 1 home on 3 acres, university SFH, SFH that I don't rent. I moved from lower valued rentals to higher valued rentals. The Cap rate is less but got tired of renting to the lower income population.

I don't think I will buy any more real estate unless something special comes up which seems to always happens. As I got older, time becomes more valuable than money. I rather play golf than grind on more rentals.

What do you do with it?

 

[emergentmd]

What do you do with it?

Write off as my business office

 

[worthless]

Congrats. Once you pay it off, you are just living off passive income then have a great legacy to hand off to someone/kids.

I was about 45 when I started in RE. About 3 years ago, peeked at 6 duplexes, 1 SFH next to a major university, 3 STRs. Goal was to have 25 rental properties in 10 years which seemed reasonable with just purchasing 1 per year. Once I hit 10 homes, the juice was not worth it anymore for me b/c my business income dwarfed rental income. I divested and now own 1 duplex, 3 STRs, 1 home on 3 acres, university SFH, SFH that I don't rent. I moved from lower valued rentals to higher valued rentals. The Cap rate is less but got tired of renting to the lower income population.

I don't think I will buy any more real estate unless something special comes up which seems to always happens. As I got older, time becomes more valuable than money. I rather play golf than grind on more rentals.

I wonder when I’ll age out like that lol. I’m sure it’ll happen someday, although I’m pretty much entirely hands-off at this point.

What do you do with your money now? Pay down the properties? Invest in your businesses? Invest in the market?

 

[tartesos]

Congrats. Once you pay it off, you are just living off passive income then have a great legacy to hand off to someone/kids.

I was about 45 when I started in RE. About 3 years ago, peeked at 6 duplexes, 1 SFH next to a major university, 3 STRs. Goal was to have 25 rental properties in 10 years which seemed reasonable with just purchasing 1 per year. Once I hit 10 homes, the juice was not worth it anymore for me b/c my business income dwarfed rental income. I divested and now own 1 duplex, 3 STRs, 1 home on 3 acres, university SFH, SFH that I don't rent. I moved from lower valued rentals to higher valued rentals. The Cap rate is less but got tired of renting to the lower income population.

I don't think I will buy any more real estate unless something special comes up which seems to always happens. As I got older, time becomes more valuable than money. I rather play golf than grind on more rentals.

That’s nice! Good on you.
I love real estate. I don’t deal with the headaches.

 

[emergentmd]

I wonder when I’ll age out like that lol. I’m sure it’ll happen someday, although I’m pretty much entirely hands-off at this point.

What do you do with your money now? Pay down the properties? Invest in your businesses? Invest in the market?

When I was younger and hungrier, it was a worthwhile time vs money investment. I have sold off all of my low end duplex and put it into pricier properties. I have property managers for everything but it became a pain when someone left after 2-3 yrs and the place needed alot of deferred repairs. In the long run, the profit was not worth carrying it. I live in a high property tax area and profit came with appreciation and not cash flow.

Selling them for 3x what I paid then leveraging into a more valuable property was definitely worth it for me but keeping it was never profitable.

Working in the low priced rentals created years when a new HVAC or roof just wiped any profit.

My money now is looking for places to invest. Expanding my business if a good project comes up. Doing lots of syndications. Starting to look into cash benefit plans to defer more taxes. Goal is to diversify away from real estate which is about 50% of my net worth.

 

[finalpsychyear]

What do you do with it?

Ive had a few friends who had 1-2 properties then just realized more work than they intended and sold in late 2020. One invested evenly in mag 7 and the other in major cryptos. Both made out well.

For me the only real estate will be my future house though it has its role in anyones diversification strategy.

 

[tartesos]

Ive had a few friends who had 1-2 properties then just realized more work than they intended and sold in late 2020. One invested evenly in mag 7 and the other in major cryptos. Both made out well.

For me the only real estate will be my future house though it has its role in anyones diversification strategy.

You have to like it.
I grew up around it so I’m comfortable with it.
Most of my nw is in RE.