Rokslide Real Estate Investing Thread

[arrow179]

Definitely.

Also related - Thoguht it'd be real easy to rent the Mrs townhome after she moved in with me and it was for a few years. Fast forward to the past year - we're short $26k in rent from a tenant that has been bending us over and the county is not at all land lord friendly.. Lots of success stories out there but plenty of pitfalls too.

Yeah bad tenants can really screw up a good ROI!

 

[ewade07]

I'll chime in. My wife and I bought our first house back in 06/20. It was set up as an up-down split, full kitchen and laundry downstairs. We lived there for 3 years and had the basement rented out the entire time we lived there. We bough our second home in 06/23 and turned the upstairs into a STR. That one house pays the mortgage for both houses and then some. Yes, the STR can be a pain but nothing to the extent that we have wanted to sell that house. We are looking at buying another house and keeping our second and renting that one out as well. Its getting tougher now to buy a house for the sole purpose of renting it out in my part of MT, but there are still deals to be had. Doing another STR is out of the question as the property taxes are set to skyrocket due to new tax laws.

 

[aq3]

Crying shame ain't it? You work hard, you take risks, you put your as* on the line to purchase RE, yet a tenant doesn't pay and YOU have to jump though hoops or wait a certain amount of time, or whatever, to correct he situation.

 

[NDGuy]

Real estate is too expensive to get into for me, I'd need it to cool off for me to seriously look at it.

 

[Huckelfin]

Crying shame ain't it? You work hard, you take risks, you put your as* on the line to purchase RE, yet a tenant doesn't pay and YOU have to jump though hoops or wait a certain amount of time, or whatever, to correct he situation.

Yep its a pain in the ass. I was really high on real estate right as I got out of college, bought a fixer upper duplex and have owned and rented that for about 7 years now. My wife and I spend a ton of time really digging into potential tenants because we have found it is very easy to hide big red flags these days. Most of the time people are offered deals to go away immediately, cash for keys, etc. because neither side wants to go through an eviction. For this reason, if there is any reason a tenant has an eviction, there should be absolutely ZERO consideration to be a prospective tenant. They are POS, end of story, at least IMO. Evictions prove they are unable to be reasonable in any way.

Anyway, RE has made me money and my house has appreciated a ton, but it is a pain in the butt to manage sometimes. Some months are fine, some are not. Sometimes I think about selling so I can take my money and run because its definitely not as passive as some people make you think it is. Neediness of tenants can influence this a lot though too.

 

[Hnthrdr]

Definitely.

Also related - Thoguht it'd be real easy to rent the Mrs townhome after she moved in with me and it was for a few years. Fast forward to the past year - we're short $26k in rent from a tenant that has been bending us over and the county is not at all land lord friendly.. Lots of success stories out there but plenty of pitfalls too.

That’s nightmare fuel man, I’m sorry!

 

[wind gypsy]

Crying shame ain't it? You work hard, you take risks, you put your as* on the line to purchase RE, yet a tenant doesn't pay and YOU have to jump though hoops or wait a certain amount of time, or whatever, to correct he situation.

.. and pay for lawyers that aren't particularly helpful and also miss the eviction court date because "it wasn't on their calendar" even though they were the one that communicated the date to us in the first place.

 

[Hnthrdr]

I'll chime in. My wife and I bought our first house back in 06/20. It was set up as an up-down split, full kitchen and laundry downstairs. We lived there for 3 years and had the basement rented out the entire time we lived there. We bough our second home in 06/23 and turned the upstairs into a STR. That one house pays the mortgage for both houses and then some. Yes, the STR can be a pain but nothing to the extent that we have wanted to sell that house. We are looking at buying another house and keeping our second and renting that one out as well. It’s getting tougher now to buy a house for the sole purpose of renting it out in my part of MT, but there are still deals to be had. Doing another STR is out of the question as the property taxes are set to skyrocket due to new tax laws.

STR’s were the golden goose really until everyone piled in, kind of wrecked it haha my BIL still runs a profitable one but I know plenty of people who came late to the party and got hosed. I think they can still do alright IF local zoning doesn’t crush them. Kind of funny how the hotel industry really lobbies for that while at the same time man of them own tons of STR’s themselves

 

[Habitat#1]

If you sold early this year and are going to 1031,you don't have much time left do you?I started with a triplex and tied my first 65 acres into same loan.Rent made all but maybe 1000.00 year out of pocket but kept triplex and bought more land and now up around 500 acres and almost paid off and sold triplex.Only have one rental farm house thats on my farm so works good.We have also bought a couple cheap little houses and fixed up and made good money on them.These were houses in the 10K-15K range sold one for 45,000 and my daughter just sold one for 103,000 after she lived in it for a couple years.Some smaller towns have good deals.No commercial close enough for me to watch.

 

[CorbLand]

STR’s were the golden goose really until everyone piled in, kind of wrecked it haha my BIL still runs a profitable one but I know plenty of people who came late to the party and got hosed. I think they can still do alright IF local zoning doesn’t crush them. Kind of funny how the hotel industry really lobbies for that while at the same time man of them own tons of STR’s themselves

The easiest and cheapest way to eliminate your competition is via legislation.

 

[Svivian]

.. and pay for lawyers that aren't particularly helpful and also miss the eviction court date because "it wasn't on their calendar" even though they were the one that communicated the date to us in the first place.

I dumped my only two rental properties towards the end of 2020. It was clear during COVID the GOV'T was not in favor of land lords.

CO passed even worst laws in 2024 that make owning rentals for residential purposes a non starter for me.

 

[Hnthrdr]

I dumped my only two rental properties towards the end of 2020. It was clear during COVID the GOV'T was not in favor of land lords.

CO passed even worst laws in 2024 that make owning rentals for residential purposes a non starter for me.

Yeah will likely cycle out of my res and hopefully get a commercial location for the wife’s business, maybe STR in grand county but like I said it’s become much much harder to crush it in that sector. Co makes vetting renters a must cause they are awful at the state capital

 

[Svivian]

Yeah will likely cycle out of my res and hopefully get a commercial location for the wife’s business, maybe STR in grand county but like I said it’s become much much harder to crush it in that sector. Co makes vetting renters a must cause they are awful at the state capital

I’m looking at building storage units.

Right now builders are building houses on smaller lots and smaller square footage. Plus I like the idea of spreading out my tenants so that I have constant stream of income. Problem is land prices are outrageous right now

 

[missjordan]

I manage a fairly large portfolio of commercial properties, and honestly, I wouldn’t personally rush out and buy commercial real estate today.

Warehousing has been the clear winner for us—it’s consistently the easiest product to rent and keep occupied. Office space goes through major ups and downs. Right now i have more vacancies than i have rentals but all office rentals in my area are like that too. Storage units ran really strong for us during the covid time. 100% occupancy with a wait list for 3 years. Got extremely soft and i lost a 1/3 of our rentals for various reasons. Now they’re picking back up now that’s its summer. I have no experience with retail space.

industrial warehousing has significantly outperformed the other categories for me personally.


Sent from my iPhone using Tapatalk

 

[peterk123]

Since there is a stock trading thread I thought it would be good to start a real estate investment thread. Let’s hear about what you savvy real estate investors are doing.

I’m looking at buying a commercial property with an absolute NNN lease in place with the current tenant having 14 years remaining on a 15 year lease with rent increase every 5 years of 10%. I’m aiming for a 7% cap rate for the purchase price. The seller wants a 6.25% cap rate price. Any advice as this would be my first commercial property with this type of lease agreement?

FYI - I’ve owned and do currently own other types of real estate investments.

Depends on who the tenant is. This sounds like a cvs, Walgreens, Napa auto parts, etc. Probably a build to suit scenario.

Cap rates are quite low these days, driven by aggressive buyers. Mortgage rates, 10 year treasuries and holding period are no longer a consideration. It's gotten so crazy that banks have to go out 25 and 30 years to make deals work these days.

Good news is you can get rates at 6% or less, so these stupid cap rates may start to work again, but probably not. The days of 2.5% commercial rates really f'd things up.

You said it's a 1031 from earlier in the year. Did you already close on the sale? You have limited time to identify up to three properties, I believe 90 days. Then close within 180, I think. And it has to be like kind. Don't believe you can go from residential to commercial for example. You also can't touch the cash so you need a fiduciary.

 

[Hnthrdr]

I’m looking at building storage units.

Right now builders are building houses on smaller lots and smaller square footage. Plus I like the idea of spreading out my tenants so that I have constant stream of income. Problem is land prices are outrageous right now

Seems like a solid idea, pretty crazy how they will shove more and more homes on less and less lots, definitely always a need for places for people to store their stuff

 

[SDHNTR]

Do you want a second job? Because that’s exactly what owning and managing investment real estate is.

 

[Hnthrdr]

Do you want a second job? Because that’s exactly what owning and managing investment real estate is.

Facts

 

[arrow179]

You said it's a 1031 from earlier in the year. Did you already close on the sale? You have limited time to identify up to three properties, I believe 90 days. Then close within 180, I think. And it has to be like kind. Don't believe you can go from residential to commercial for example. You also can't touch the cash so you need a fiduciary.

Yes, closed less than 30 days ago. You have 45 days to identify and 180 days to close on replacement property. Like kind can pretty much mean any income producing property so the options are very open ended. The funds are with a qualified intermediary so that had to be setup well before selling the property you are disposing of. This is my 8th or 9th 1031 so I’m pretty familiar with the process.

For every dollar I don’t do a 1031 exchange on I’ll pay a bunch of taxes which is what I’m trying to avoid. The original property I purchased back in 2002 so I have a super low basis.

I’m willing to take a little lower cap rate for potentially less headache as you would have with STRs. If I can end up with an 8+% cap rate avg over 10-15 years and an appreciating property I’m good with that!

 

[arrow179]

Do you want a second job? Because that’s exactly what owning and managing investment real estate is.

I’ve already got 2 full time jobs. I don’t need another hence the reason I’m looking for a somewhat hands off scenario.