patrick.net

Nice work, Roberto. Sounds like you know what you are doing. What resources do you use to go about finding these properties?

id be doing the same thing if I had cash and lived in a housing crash ground zero cities.

With enough rental properties You could be setting yourself up for life right now.

good job rob. you seem to have a pretty level perspective of the real estate markets which makes me think you'll be even more successful than you already are.

Rob,

How did you get a house for only $26k? That is less than what I paid for my Honda.

WOW....my skin crawls and i look for my ak47 when i drove thru that area of town.....!...good luck man. i was staying at a motel just SE of that area..over in gilbert and superstition and i was working on my laptop looking at the mls and right outside my room 3 people were shot to death in a drug deal gone bad.

i am starting to see cheap foreclosures around the union hills dr./I17 area....

i was at w guadalupe rd and s country club dr....just a couple of miles from asu. there are some very nice areas but also some pretty rough areas...i'll stick to north phoenix along 101.

roberto - did you read your own description of the properties....? if you buy a house/condo that is torn to hell..that is also the people that you will eventually rent to...! the people that lived in the condo were trash and they were there because the neighborhood is trash. the people you rent to will be like 'why dont you paint the ceiling dark blue'....!

but i wish you good luck as renting to frat boys and section8 is a tough slog.....

Roberto those purchases you are making are about as safe as you can get based on the information you are giving. Congrats and thank you for sharing.

A 40k condo that rents for 800k has a gross cap rate around 25%! Even with high vacancy/expenses you should easily get 15% cap rate.

There is no way anything in coastal Cali can be bought anywhere near that cap rate even when buying at courthouse auction. (Might be a rare example here and there though but not the norm.)

The only investing in Coastal Cali I would be doing is flipping foreclosures bought at courthouse to FHA buyers - but there is tons of competition now - but some people are making money which is not easy anymore.

Right now I'm trying to decide which area is best to invest in cash flow rentals between Vegas, AZ, or Socal High dessert (palm springs, IE, palmdale are all down up to 80% like AZ). So far my conclusion is that they are all equally distressed areas and probably the biggest issue of where to 'buy a buncha rentals' would be where I decide to live and I'm thinking AZ is the nicest of all these areas.

Currently im in Los Angeles renting and sitting on a pile o cash that is earning 1%.... Im still very angry about low CD rates and don't want Ben Bernake to 'force me to spend my money' but I'm thinking about it seriously... Ben might be able to keep rates at zero longer than I can stand earning zero....

condos below 40K... damn, I wish I had that option :-)
Good for you Roberto!

now if you can post your CREDIT CARD number and SOCIAL SECURITY number here ... *grin*

Mark - have you considered what could happen to Vegas economy over time when slowly more and more state and local governments allow gambling due to being broke? Taxpayers are fed up with higher taxes - its much easier to pass a law to allow indian gaming off the reservation. They tried to pass this recently in CA i think but no luck yet.

Really the only reason Vegas exists is due to state laws restricting gaming - as these slowly go away Vegas might end up a ghost town with a million vacants like Baltimore/Detroit. Especially if gas is $5+ a gallon it will kill vegas.

PockyClipsNow says

Mark - have you considered what could happen to Vegas economy over time when slowly more and more state and local governments allow gambling due to being broke?

Very good point!

The thing is that Vegas has a 50 year head start on all the Indian gambling casinos and such. It's not just gambling anymore that attracts people to Vegas. The entertainment infrastructure is there to the point that it'll take decades for any other locality to become the destination that Vegas is for entertainment. You won't see $100 million Cirque Du Soleil theatres/stages built anytime soon in these up-and-coming locations. It took Vegas 40 years to get to that level of maturity (I was in awe when I went to see O! at the Bellagio the first month it opened).

By the time that happens, the price/rent ratio is so well tilted in the investor's favor in Las Vegas, that it won't matter that your property is worth 10% of what you bought it for, since you will have derived so much cash-flow income by then.

Mark: I would tend to agree it will take so long for this to be a factor it wont matter....

I'm planning on spending a lot more time in 'the dessert' checking out real estate this winter.

One plan I have is to spend 500k to buy 10 rentals. If they each net 500 a month profit average thats 5000 a month and I could 'semi retire' if i wanted to assuming I could pull this off.

It sure would suck to buy into a 'future ghost town' but you can protect yourself like Roberto has done buy buying near mass transit/colleges. Also maybe buying near the local HUD /welfare office/city hall/prison/jail/food4less/walmart might be a good tip. Avoid buying near gold or silver mines! hehe.