Properties right now is a viable model anywhere. I know for a fact is not viable in Florida.
My model has been to do these with none of my money in the deal. I would hard money enough$ to complete 4 L/H’s approx. 160K now and sell two for all cash to “free and clear” two for our portfolio to rent out.
The last time I did this we sold one for 74K all cash and another for 55K and a Note for 21K. I am selling the one above to clear up HM loan and get debt free. Not a bad return but there is a lot of work involved here.
Rentals are the only segment of our model that is really profitable right now. We are showing a 26% net net from rentals and are at 89% occupied last month (90% we consider full). We always have 5-6 moving in or out or evictions. The good old dayus of 95% are gone for now. We could increase profit dramatically if we risked doing highly leveraged deals…we opt not to. One thing that skews this number is we get 8K per month cash flow from a 1K investment (option consideration) on a 26 space Park. Our numbers would be much lower without this item.
One inherent benefit of rentals is “equity build” and in marion County florida last 2 years our real estate prices have fallen 26%. We have bought right mostly cash and this downturn has not affected us much. The highly leveraged/ refi flippers are dying. Their model depends on a rising market/ liberal refi credit scenario to be viable.
Tony is correct there will be fortunes made by savvy investors that can buy basement bargains in this cycle…there will also be fortunes lost and not just on paper. We have lost 688K in equity in two years but this is paper money. We live for cash flow…a friend quoted, “you can’t eat equity”. I love it.
Lonnie nailed it…there will always be a need for affordable housing. There will be huge demand for this in the coming few years. We are already seeing families downsizing into mobiles (and put the rest of the furnishings in storage) Hmmm Self storage maybe increasing?LOL
Fear is fueling this down cycle and the liberal media is fanning this fire.
They need to quit it…