Rental properties+investing plan

[Kedu]

The plan.
-buy 4 houses with interest only loans.
-120k purchase price each(600 per month mortgage payment)
-assume 100% occupancy and 1500 per month collected in rent.
-bulk payment for the house due in 15(10?) years
-put 700 per month, per house in the stock market.
-30k invested per year for 15 years x 7% interest=800k
-assuming the properties appreciate 2% per year the total profit would be around 1 mil.

Does this look feasible?

[blackasthma]

It looks like you're assuming a 6% mortgage interest rate...are you assuming a conventional loan? Even as an A+++ borrower, I don't think you can finance an investment property for less than 7-8% right now, and that's putting 20% down and going full docs. Possible exception is purchasing >30% below market. You do 10 year IO, so principal would be added to your payment for the remaining 5 years prior to the balloon. This means the rental income minus mortgage, insurance, taxes, maintenance, management, would leave you short of your estimate a few hundred bucks per month per house. I'm guessing you might need up to 10 homes to go this route.
Another option is to purchase a the properties subject-to or on a lease option basis and then sublease. This puts you at less risk and I'll bet you could exceed your goal much faster.

[RikaKazak]

Yes you can get loans under 7%...I did it 3 months ago. with 20% down.

[jaydub]

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Yes you can get loans under 7%...I did it 3 months ago. with 20% down.

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Rika,

As it is essential to you #1 RE baller business, you should know that there have been some current events that affect the loan market. What happened three months ago is well, what happened three months ago and means precisely dick right now. Just an FYI.

J

[haakee]

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Does this look feasible?

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No. You won't have 100% occupancy and you will have maintenance costs and taxes. As a rule of thumb you should consider that your income after costs (taxes, management, utilities, insurance, vacancies) will be 55% of the rent. reference

On the plus side you should be able to increase the rent from time to time.

[Kedu]

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Does this look feasible?

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No. You won't have 100% occupancy and you will have maintenance costs and taxes. As a rule of thumb you should consider that your income after costs (taxes, management, utilities, insurance, vacancies) will be 55% of the rent. reference

On the plus side you should be able to increase the rent from time to time.

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They will have 100% occupancy. I own rental property now, and it's a college town where demand is 10x the supply for rental housing. The 700 a month gives 150 per month per property for maintenance. In my experience that is more than enough. Utilities are paid by renters. Taxes would be around 400 a year per house. I just factored them out for simplicity.

[RikaKazak]

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Does this look feasible?

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No. You won't have 100% occupancy and you will have maintenance costs and taxes. As a rule of thumb you should consider that your income after costs (taxes, management, utilities, insurance, vacancies) will be 55% of the rent. reference

On the plus side you should be able to increase the rent from time to time.

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They will have 100% occupancy. I own rental property now, and it's a college town where demand is 10x the supply for rental housing. The 700 a month gives 150 per month per property for maintenance. In my experience that is more than enough. Utilities are paid by renters. Taxes would be around 400 a year per house. I just factored them out for simplicity.

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100% occupancy is SERIOUSLY LOL!!! That's like going to the poker strategy section and claiming you're a 18 ptbb/100 winner at 10/20 NL...anyone who knows anything about real estate is laughing behind your back.

What happens when a group of kids trash the place and it takes your workers 1 month to get it rerentable?

What about when you don't get reembursed COMPLETELY for all the costs of new carpet etc. due to a trashed place?

$150 a month? who's mowing the lawn? what about BIG repairs like roofs and painting and carpet?

And don't say it doesn't happen, 2 months ago I just had a unit cost me $2,800 because someone trashed it while moving out, I sued, won, but she basically has nothing to go after...aka...~80% chance I never see the money, cause there's nothing to go after. (ohh, and she was a college student)

[Kedu]

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Does this look feasible?

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No. You won't have 100% occupancy and you will have maintenance costs and taxes. As a rule of thumb you should consider that your income after costs (taxes, management, utilities, insurance, vacancies) will be 55% of the rent. reference

On the plus side you should be able to increase the rent from time to time.

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They will have 100% occupancy. I own rental property now, and it's a college town where demand is 10x the supply for rental housing. The 700 a month gives 150 per month per property for maintenance. In my experience that is more than enough. Utilities are paid by renters. Taxes would be around 400 a year per house. I just factored them out for simplicity.

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100% occupancy is SERIOUSLY LOL!!! That's like going to the poker strategy section and claiming you're a 18 ptbb/100 winner at 10/20 NL...anyone who knows anything about real estate is laughing behind your back.

What happens when a group of kids trash the place and it takes your workers 1 month to get it rerentable?

What about when you don't get reembursed COMPLETELY for all the costs of new carpet etc. due to a trashed place?

$150 a month? who's mowing the lawn? what about BIG repairs like roofs and painting and carpet?

And don't say it doesn't happen, 2 months ago I just had a unit cost me $2,800 because someone trashed it while moving out, I sued, won, but she basically has nothing to go after...aka...~80% chance I never see the money, cause there's nothing to go after. (ohh, and she was a college student)

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Thanks, maybe i need a reality check. Keep in mind that these could be 90-100k loans. The average purchase price will be about 120k and if needed I could put 20-30k down. A 90k loan would be about 520 per month payment. 700 invested would leave more than 250 per house per month for maintenance.

[pig4bill]

Minnesota also has no property taxes and insurance is free? The college kids rent all summer? Th kids' parents are so stupid they would let their kids pay that much rent instead of them buying a house there for the 4 years?

[RikaKazak]

I don't get it, you come on here asking if it's feasible, we say no, you say, ZOMG YES IT IS I already do it...

if so...why come on here and ask if it's feasible?