FROM AN EMAIL EXCHANGE ABOUT A NEARBY HOUSE BEING SOLD
284k?
Always thought the way to wealth was to have 12 single family rental homes.
At 300, the opportunity cost is about 15k. If you financed 300k for 30 years at 5%, the PI is 1610. If you could rent it at say 2k, then at the end of 30 years, you have an asset that throws off 24k per year. Twelve of them is 240+48=288/year. An excellent retirement.
I first saw this proposed in the 70s by a discredited hustler named Sonny Bloch. (Later convicted on something unrelated to real estate.)
Shoulda, coulda, and woulda if I was smart.
You have to be meticulous with money. Diversify your risks. But, I can see how it is a guaranteed winner. Like when we rented the shore house. Rents edge up over time. You sign one year leases with your tenants. Hefty security deposits. A lot of headaches, but after 30 years, or 40 years, you have the equivalent of the family farm. Incorporated it as a family business to minimize tax and legal risks.
Sigh.
Too late, I get smart.
:-)
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Note: You have to bootstrap into 12. Optimistically, you get into one per year. Or per two year. You have to ruthlessly buy cheap quality houses. Modest improvements; diligent maintenance. Track the cash flow. Eventually the equity builds up. I think you title each one in its own corporate entity. Superior performing ones could be sold off at a premium. Hard work, but the road to riches imho.
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Reinke Faces Life 