How do I start investing in real estate?

[Singuy]

I have a co-worker who is very successful in buying up properties around our university and renting them out to female students. We are about to partner up and pay him the management fee, while he produces us a return.

I have just invested into peerstreet, a crowdfunding way to invest into fixer upper houses. I have also signed up for the waitinglist at fundrise, which is direct REIT investing.

I frankly can care less about buying my own house and managing it. Done it before with only one house and it sucked. Too many people coming and leaving..not staying their full lease and etc.

[LivingAlmostLarge]

what rental rate of return are you getting singuy?

[Singuy]

what rental rate of return are you getting singuy?

Are you asking about my friend? He will produce about 18% rate of return after management fees. This includes equity of the houses we purchase PLUS extra profit left over. Renting to students=renting separate rooms so it is definitely more profitable than to rent to single families. Also with student loan money, defaulting on rent is extremely rare(never once for the past 4 years, renting to 70 plus different students now).

As for peerstreet, I am expecting a 8-10% rate of return.

Direct Reit investing, I should expect a 10-12% rate of return after fees (currently on the waitlist for approval).

[LivingAlmostLarge]

How much are the houses you are buying Singuy? What's the rent on those houses?

I think Rachel the woman doing 5 years retirement bought her rentals off market with a realtor's help and private financing from the selling landlords. Very risky and very cool.

I'm curious tom if you do get into it please post details. I'd love to follow along for the ride.

[corn18]

SO far, no progress. I talked to my wife and she wasn't big on the idea of buying a vacation home and renting it out. She wouldn't mind buying one and just using it for ourselves. She's very tidy and particular, and I understand that. So any vacation home would be a buy and hold.

She wasn't averse to becoming a landlord, which surprised me. We will be empty nesters this fall and she has always beed a stay at home mom. Spent 100% of her time volunteering for the school and kid's activities. Now she is looking for something to keep her excited. She thought this might fit the bill. So it's still on the table.

Tom

[Jluke]

Not sure if this is lender-specific or HOA-specific.

But when applying for a mortgage on a vacation home, I believe the lender wants to know if this is a second home just for you or whether it is an investment property that will be rented out. Rates may vary too??

In my minimal research on this I remember there being specific rules for rental properties such as if I am the owner I really can only stay at the place for maybe a week or I lose the tax benefit?

Again very little knowledge so if someone can speak about mortgaging a second property (as vacation only or rental) and what needs to be considered that would be greatly appreciated.

[disneysteve]

I have a co-worker who is very successful in buying up properties around our university and renting them out to female students.

How does he only rent to females? Seem to me that would be discriminatory.

[LivingAlmostLarge]

Tom would your wife go into property management over you being landlords? Maybe just managing properties for someone else? I wonder if that would pay enough?

[corn18]

Tom would your wife go into property management over you being landlords? Maybe just managing properties for someone else? I wonder if that would pay enough?

Not sure. I'm not excited about her getting a job because we're in the highest tax brackets.

[DaveInPgh]

SO far, no progress. I talked to my wife and she wasn't big on the idea of buying a vacation home and renting it out. She wouldn't mind buying one and just using it for ourselves. She's very tidy and particular, and I understand that. So any vacation home would be a buy and hold.

She wasn't averse to becoming a landlord, which surprised me. We will be empty nesters this fall and she has always beed a stay at home mom. Spent 100% of her time volunteering for the school and kid's activities. Now she is looking for something to keep her excited. She thought this might fit the bill. So it's still on the table.

Tom

Would this vacation home be within driving distance and a property you would be getting considerable use out of each year? Sounds like a big drag on the finances without rental income to offset the large expense.

Your thread re-sparked my interest in REI and surprising to me is that my DW is not totally against it. She is still not a big fan of being a landlord, but we did a drive by on a property on Thursday for a potential flip. Friday would have been the 5th day on the market, and it was updated that morning as under contract. And that was a rare MLS property that was below market enough for a profitable flip. In my area, most of those properties change hands off market.

[Singuy]

How does he only rent to females? Seem to me that would be discriminatory.

It's his house, he can rent it to whoever he wants. The train of thought is, females are less likely to use the house as a party central than renting it to a bunch of dudes. He gets a stack of applications, and only cherry pick people based on facebook photos/comments/lifestyle. So far, out of the 70+ students that have come and gone..he hasn't had any major problems (like using his house to grow weed, setting it on fire, holes in the wall, complete destruction of the house)

[Singuy]

How much are the houses you are buying Singuy? What's the rent on those houses?

I think Rachel the woman doing 5 years retirement bought her rentals off market with a realtor's help and private financing from the selling landlords. Very risky and very cool.

I'm curious tom if you do get into it please post details. I'd love to follow along for the ride.

Right now we are looking at houses that cost around 270-290k after closing with 4-5 bedrooms. He rents them out for 450-500/room depending on the amount of bathrooms.

[disneysteve]

It's his house, he can rent it to whoever he wants.

That doesn't mean it isn't discrimination. What if he decided he would only rent to white people. Would that be okay because "it's his house"?

[TexasHusker]

That doesn't mean it isn't discrimination. What if he decided he would only rent to white people. Would that be okay because "it's his house"?

I have rented to a lot of people, and unfortunately I found out there is a reason for certain stereotypes. I won't go into further detail on the forum.

[Singuy]

That doesn't mean it isn't discrimination. What if he decided he would only rent to white people. Would that be okay because "it's his house"?

His business, his practice. If he only wants to rent to only a certain type of people..that's his business..literally. He is not obligated to rent his house out to anyone..unlike a restaurant.