Buying single family homes with no work or hassle.

[WealthyDoc]

This is an intriguing option.  I have had rental houses.  They were profitable but a pain to select and manage.  I invest in REITS.  That is nice since it is hands off and diversified.  You lose some upside and some tax advantage that way though.  There are crowd source options and maybe MLPs to consider.

PIMD posted a blog post that is interesting.  He lives in CA but bought an investment house in IN.  What do you guys think of this option?

http://www.passiveincomemd.com/single-post/2016/11/15/How-I-Bought-an-Out-of-State-Investment-Property-From-My-Call-Room

[Lithium]

Sounds promising but too good to be true.  Ever since I read this post a few years ago, I've never considered buying investment properties.

https://www.whitecoatinvestor.com/best-practices-for-the-intelligent-real-estate-investor-a-review/

See the "Four Big Ideas."  Without more of a track record I wouldn't trust Homeunion to manage my property any more than I'd trust Edward Jones to manage my money.

 

[Zaphod]

Sounds like "turnkey" properties, which some people do and have heard good things...but agree seems crazy. Would have to dig into more to see if you can find some horror stories. However, it really feels like cheating to buy out of state properties with management when you're in Southern California and properties are just not that available with any cash flow whatsoever (I am as well).

[NJDoc]

WealthyDoc wrote:

I invest in REITS.  That is nice since it is hands off and diversified.

Click to expand...

WealthyDoc - you are a smart person, I've followed your posts. If you want real estate exposure why not connect up with one of the many well known syndicators in the US? REIT's have systemic market risk exposure and good commercial real estate has markedly less risk to market movements. Single family homes have massive rental risk exposure in my opinion, having "been there done that".

Lot's of options out there, connect with the pros and prosper. A well run commercial syndicator can often do 8% COC, and IRR's over 14%.

 

 

 

 

[WealthyDoc]

NJDoc wrote:

WealthyDoc wrote:

I invest in REITS.  That is nice since it is hands off and diversified. 

Click to expand…

WealthyDoc – you are a smart person, I’ve followed your posts. If you want real estate exposure why not connect up with one of the many well known syndicators in the US? REIT’s have systemic market risk exposure and good commercial real estate has markedly less risk to market movements. Single family homes have massive rental risk exposure in my opinion, having “been there done that”.

Lot’s of options out there, connect with the pros and prosper. A well run commercial syndicator can often do 8% COC, and IRR’s over 14%.

 

 

 

 

Click to expand...

Wow.  Thanks for the compliment and the great ideas.  I have some investments in domestic REITs, some in foreign REITs, but a much larger amount in commercial real estate.  I'm an investor in a medical office building and that has gone very well.  Prior investments in my own office building, ambulatory surgery centers, etc have been great. I would like more opportunities in commercial investment properties though.  Do you have a syndicator that you recommend?

[NJDoc]

Sounds like we have similar investments ( medical office, surgery center etc..). I am presently with Shopoff Realty, MLG Capital and Drever Capital. All good, but especially impressed with Drever.

 

 

[jfoxcpacfp]

The diversification of REITS more than offsets any possible upside of direct investment in real estate. Owning property directly is similar to buying stocks instead of mutual funds. You may make more over the long term but you are blind to outside factors that may impact the future returns. Buying a single property puts a lot of costly eggs in one basket.

Otoh, the risk of loss is lower than that of stocks, since you stil have a piece of property you can sell in the event that you buy in at the wrong time/place. However, stocks don't call you at 3am with a leaky roof.

Unless you make a specialty in real estate, which few people have the time and talent to do, I vote for REITs.

[The White Coat Investor]

I've got a post coming up on the subject (also a guest post from a homeunion guy, he must be making the rounds)- turnkey properties. It's not for me, but it has a significant advantage over syndicated (which I think is my preference on the continuum between the Vanguard REIT Index Fund and fixing toilets.) That advantage is you get to decide when to sell and it's easier for you to exchange. The real tax advantage of real estate investing is to exchange, exchange, exchange, die, get step-up in basis. Much harder to do that with syndicated shares.

Also, having owned an out of state income property, I'm not sure I want to have that experience again in any form.

[Passive Income MD]

Hi WealthyDoc, my post is only one person's experience and so far it's been good, not perfect. This is by no means the last post on this investment, and I'll keep you updated. Your experience could vary however if you get unlucky with your tenant, the rental market in that particular area tanks, or a whole host of other factors.

There are endless debates about Real estate vs Stocks, REITs vs Direct Investment, Multi vs Single Family Residences (SFR), Debt vs Equity investments. It's hard to argue with any of these folks if they're actually doing it and are successful. I believe you can do well with any of these methods, so I'm just trying out most of them to see what fits best with my lifestyle, goals, interest, and ambition. So far, I've most enjoyed direct ownership (combination of SFRs and Multifamily) and it seems to give me the clearest path to financial freedom. Again, I'll keep you updated  8-)