>>1170902
Being a landlord is shit though

every day you have to deal with faggot tenants wrecking the building and it's your responsibility to get it fixed.

And most small-scale rentals are shitholes with tenants that are less than punctual with payments

>>1170926
see that guy. he's doin' it wrong

>>1170926
Pay a fucking landlord then, it's not that hard.

But yeah, I don't care what they say about the real estate game since the crash. I tell people that I'm looking into holding real estate for investment purposes and they look at me like I'm a retard and mention muh 2008 subprime mortgage crisis.

You're not going to get incinerated like those playing the game then if you don't take out a second mortgage on the home you just bought to pay for the next one. There were people who played their credit games close to their chest, and when shit hit the fan and everybody was upside-down in their mortgages, they were able to renegotiate the loans. The people who weren't able to renegotiate were the jobless people and those who had too much home compared to their income, or those who had stabbed their credit to death riding the bubble to the top.

>>1170926
my mother is a property manager. her company's cut is laughably low. they subsist entirely on volume. economies of scale.

it seems worth it. someone like my mother deals with the hoodrats and the complainers and the retarded contractors for you. it becomes an even more passive form of income. i would go so far as to say that a good manager, with the capacity to find good renters and cheap skilled contractors increases the value of your investment.

i live in the sf bay area and the average property management fee is 7% of monthly rent.
the people who got fucked in 08 either took a 2nd mortgage to buy a boat/car/vacation or became over leveraged putting zero percent down.

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
-Franklin D. Roosevelt

Obviously paying in full is unrealistic. however a significant down payment will lead to an instant positive cash flow.

Yep - landlord here. Rentals are the ultimate lifehack.

>>1170989
Any tips?

>>1170902
so he bought the rental for 90k? what did he exchange for the duplex?

>>1171129
He made a profit of $90000 on the first property a single family home. Not sure what the total sales price was.
I'd look up a 1031 Exchange under the internal revenue code. You exchange one property for another deferring capital gains.

>>1170902
This only works in the right housing environment where prices continually rise.

When you consider
>interest payments
>transaction costs
>property taxes
>inflation
>capital gains taxes
>depreciation
>insurance

There isn't as much left from rent money as you think. I've done the math on buying a house and renting it in my area. Can't seem to find an annual return of much more than 10%.

If you're willing to borrow money to purchase an asset, why not equities instead?

If you use leverage to buy dividend paying stocks, you can just as easily get 10%. It's what Warren Buffet mostly does.

There's some big things for stocks. There's a much lower floor for transaction value. You don't have to sell all of your shares in a transaction. Try selling 1/5 of a house. You don't also have to buy 100k worth at a time. You can gain geographical diversity. Do you want to rent out a house in a town you don't live in? Commercial property is the best type of property to own, and the costs are too high for most individual investors. And everybody wants to buy property. There's more demand for it than for stocks, so prices are higher and returns are lower.

>>1171213
Actually I don't consider depreciation because it's a non-cash expense that lowers the taxable income.
Inflation? Great, I'll pay back my mortgage with ease since since the principal is worth less in "real terms".
Property taxes = another write off
Capital gains tax = 1031 exchange
Insurance = expense another write off
I could care less if the property appreciates. I want cash flow hence the reason why I said saving 50% of ones salary for a big down payment.

Warren advises heavily against leverage look up the quotes. Buying on Margin is what killed people in every the depression and every major down to date.

Your comment was long, but pretty misinformed.

I graduated top in my class in accounting. But I'm a lazy piece of shit.

>>1170902

Let me give you some great financial advice

>Don't take investment advice from boomers

I graduated top in my class in accounting. But I'm a lazy piece of shit.

graduated top in my class in accounting. But I'm a lazy piece of shit.

>>1171061
Just follow the formula. Go on to biggerpockets.com, it's a great resource for learning.

>>1171254
>it's great I have these expenses that are effectively only 70% instead of 100%

If the property doesn't appreciate, there's not much in yield. Just rent. Can you actually say what you think your ROE is?

What Buffet says, and what he does is completely different.
http://www.economist.com/node/21563735
All of his advice to investors is bullshit. Because no individual investor is going to actually buy a majority of a company and put in their own management.

You're just parroting Robert Kiyosaki, or some other financial scam artist.

Land might make a millionaire.
Equity might make a billionaire.

Well tell me this,
Would you rather buy a REIT or a rental property?

REIT, no question

>>1171825
Cash flows the most important piece of of the formula to financial independence. And I actually live in the Bay Area so appreciation will most likely not be an issue either. I'm actually parroting advice from a family friend.
Show me where warren Buffett buys stocks on margin?
I think ROIC is a better formula for determining a worthwhile investment. Buffett states the same thing.
There's plenty of billionaires from real estate investment.
Dan Gilbert, Sam Zell, Trump, off the top of my head.
http://www.forbes.com/pictures/emeg45efdfh/8-joseph-lau/

You're pretty misinformed. I'd re-read Buffetts letter to shareholders book. It's all there.
And I'm not advocating a portfolio concentrated solely on RE but it'll be my primary.

>>1171988
From the article linked
>Without leverage, however, Mr Buffett’s returns would have been unspectacular. The researchers estimate that Berkshire, on average, leveraged its capital by 60%, significantly boosting the company’s return. Better still, the firm has been able to borrow at a low cost; its debt was AAA-rated from 1989 to 2009.

And just a few weeks ago
http://www.bloomberg.com/news/articles/2016-03-08/buffett-s-berkshire-plans-bond-sale-to-repay-10-billion-loan
>Proceeds will help pay down a $10 billion loan used to finance its purchase of Precision Castparts Corp. Buffett had said earlier that Berkshire used about $23 billion of its cash for the deal and would borrow the rest.

You're pretty misinformed.

>>1172009
So Berkshire Hathaway borrows to acquisition whole company's. You're right. It's a billion dollar firm.
But initially you advocated for an individual investor to go out on margin to purchase stock. Buffett (I totally agree his advice is do as I say, not as I do) advocates individual investors steers clear of margin. Would Buffett advocate another major corporation to financing operations soley through equity? No! You're comparing apples to oranges.

"Land might make a millionaire.
Equity might make a billionaire."

More than one way to skin a cat. You're pretty misinformed about the concentration of real estate billionaires. Sure, there's people like Gates that hold the vast majority of their wealth in common stock after founding a company. How many made is solely through public/private equity vs. real estate billionaires?

And finally the math regarding you're interpretation of ROE is misinformed as well. First, measuring return on capital in terms of real estate investment is different than common stock purchases. Namely the use of the cap rate, among other ratios.
But let’s focus on return on equity and apply it to real estate that has a stagnated property value of $100K and rent per month of $500. Now shareholders’ equity let’s say would be worth $30K on a $70K mortgage. After expenses, like non-cash depreciation (another misinformed topic), property taxes, and mortgage payments, Net Income is $250 per month. 250*12= $3000/$30000 = 10%.
Is it hypothetical? Sure. Have I personally witnessed people retire of real estate? Yes. Do you have to believe me? No. Are you ignorant to real estate investing? Yes. Is Kiyosaki a scam artist? Yes. Is the idea behind his book doable? Yes. Is SF Bay property prime location? Yes. Have a inherited a significant network of contractors, brokers, and property managers? Yes. Am I a NEET? Yes.

you're, you, oops

>>1170926
>what is insurance
>what are rent collectors