Put it all on black 22

I was just passing though and thought I might give you a couple of things to think about.

3) The point of having 4 houses instead of one big one as you used as an example is that it minimizes your chances of losing. Say for example you had a vacancy rate of 5% for your sort of houses. With one house your chance of having NO income is 5%. But with 4 small houses, assuming same total cashflow overall, you have .05*.05*.05*.05 (0.000625%) chance of having NO income. Also another thing to think about is you’d expect maintenance on 50k properties to be a lot smaller than that on a 200k property, so at least you’re not hit with a big bill all at once [:0].

4) I know some people do end up in trouble with interest rate rises, but one thing to consider at least is that rents will rise with interest rates, due to supply/demand – ie. rates rise, so less people buy properties, so therefore they rent instead, meaning an increase in the rental demand, so rental prices go up.

Also I think I remember in Steve’s book, that in his calculations he always budgeted for a little expence called “maintenance and repairs”.
Anyway, buying houses for the $15-20/wk cashflow isn’t the strategy i’m going to use. I’m going to take the approach of creating value in houses, and then buying a big cashflow asset (not necessary property)

Sorry Pisces – don’t like what you said about needing a deposit (look at the nothing down posts in this forum), and when you used the word “job” – you just need some sorta income.

Anyway PenguinJr, you’re going to have a hard time just scouring the internet like all the other hopefuls looking for positive cashflow properties. That doesn’t sound like a good situation because you’re doing all the work – how about having the properties come to you? – ie. advertise to real estate offices, friends, in the newspaper, etc. that you’re an investor looking to buy properties of some description and you’ll consider any offers.

By the way, I hope you’re not restricting yourself to under 200k because you think that you don’t have the money for a deposit for a more expensive property. If you were to be creative with ideas like vendor fianancing, going into a deal with another investor, etc., you could open your options to a bigger market of properties for sale as you could afford more expensive properties.

Anyways, good luck.

Nothing is impossible, just implausible

Yeah, a friend of mine recently bought a property for his business with the clause “subject to his own due dilligence”

I don’t see anything wrong with auctions either. If you’re a shrewd investor and not swayed by the hysteria of auctions, they can’t be bad for you. If anything, auctions would show how much people would be willing to pay for the house – bad if it does get sold, but if it doesn’t – wouldn’t that mean that your offer a short while after the auction would be more readily accepted?

My point is I think auctions should be treated as merely sources of information on the demand and supply of properties.