Peeps that manage properties, would it be a good idea to finish university and get this degree

[biophase]

I don't think that degree or courses are necessary. Most of the rental stuff that you need to know is basic math. You basically need to know the market rent, value of your home, be able to calculate mortgage payments and be able to estimate expenses.

The most important things are to be true to your numbers, don't inflate the rent to its maximum number to make the numbers work. Estimate expenses as if things will break.

Don't try to massage numbers to make the property you want work. You want the numbers to make the property work.

The rest of the stuff you will learn on the fly.

 

[SteveO]

I knew someone that owned a fourplex. He lived in one unit and survived off the income. No other job or income. Spent his life surfing and partying.

 

[SteveO]

The book @LightHouse suggested was written by vollucci. The complete guide to buying and selling apartment buildings by Steve Berges.

I read these 20 years ago and used concepts from each to make a plan.

Although old, the information is still useful. Cap rates and such have changed but the processes are valid.

 

[SteveO]

I’d consider it winning the lottery if I could make that happen. According to my math 3 units could potentially at least get rid of the mortgage then I could just part time in something simple, try to get my ventures going, and also paint and garden... I’m just after the free time first and foremost

This is where the books will come in handy. The income from three units would need to cover a multitude of items. This is only a partial list as there are always things that crop up.

Debt service
maintenance and repairs
utilities
legal and accounting
make readies (turnover)
Rent loss from vacancies
Loss to move-in specials
Lost rent from deadbeats
Capital improvements
landscaping
taxes (property and local)
insurance

Most people don't calculate enough of these expenses. These expenses are real and very dependent on location. People have rules of thumb that they use but I don't like them. An example would be using a percentage of income. A rule of thumb might be to use 30% of income for expenses.

Well, an apartment that collects $2000 per month vs. one that collects $800 would send that percentage all over the place.

In Arizona, I used $3500 per unit, per year for expenses. That was MY calculated number from experience.

Income will vary based on the rental market. In a low vacancy situation, people don't tend to move as much so rent losses may be lower. I would calculate based on the areas vacancy factor. If the rate was 5%, I would calculate 8% average rent loss. If the rate was 10%, I would calculate 20-22% rent loss

 

[biophase]

What is the meaning of "extremely leveraged"? Not enough cash reserves? Or something related to the value of the mortgage/property?

Basically leverage is when you have $50k and use it as 20% down on a $250k home. You've used $50k to control a $250k asset. When you pay cash, you spent $250k for a $250k asset, meaning you didn't leverage your money.

When you put down $5k to buy a $250k house, you are extremely leveraged. Your $5k is controlling a $250k asset. But with that comes larger payments and lower cash flow.

Usually the people who are highly leveraged are doing so because they have no money.

So let's say I have $250k in the bank, and buy a home for $250k. It's going to cashflow alot. Let's just assume it's $10k a year.

Scenario 2 is I only have $5k in the bank to buy this $250k home. Now, because of my mortgage it will cashflow less. Let's just assume it's now $500 a year.

What happens when I don't have a renter? Basically means I'm -$1500/mo
Scenario 1 - I only have to pay property taxes each month.
Scenario 2 - I have to pay property taxes each month and my mortgage.

Well the guy who paid cash for the home probably has some reserves and he was making $10k a year cashflow so he can easily handle 1-6 months of no tenant.

The guy who put down $10k, probably did it because he only has $10k. He can probably only go 1-2 months before missing payments. If this guy has 2-3 properties, it just becomes a domino effect.

 

[PizzaOnTheRoof]

A broker told me I can't do an FHA for something with more than 2 units so I'm looking at 2 units and hopefully a finished basement maybe I can low key rent to a friend or something to make it 3 rent incomes, so mortgage gets covered.

That’s not true. You can get an FHA loan for up to 4 units which is considered residential.

FHA Loan Limits Increased for 2020 | The Lenders Network

The FHA loan limits have increased effective Jan 1, 2020. The loan limit in low-cost areas increased to $331,760 and to $765,600 in high-cost areas.

thelendersnetwork.com

You can tell that broker to shove it.

 

[biophase]

I just wanted to jump in and say that there is no way that I'd ever run a property management company. The reason is that your income stream is so small and limited and doesn't really scale that well.

I pay my PM $100/mo. So they make $1200/yr gross from me. They manage 400 homes. So they gross $480,000 if every home they managed was $1000/mo rent. Now they do charge around $400 for a new lease up, so add another $80k to their bottom line.

While some of you may think that that's alot, I look at that gross number and think of how much work that $560k takes to manage.

If you assume that each tenant signs a 2 year lease, you have 200 new leases a year. 17 leases a month, 17 move outs and in. Not to mention the number of maintenance calls they must get each day. How big would your staff have to be to manage 400 units? At least 10 I'm guessing. So 10 salaries at $40k, and you aren't making alot of money.

Maybe my PM does too much. They pay my HOAs, water, sewer, electric bills, they get bids for repairs, manage all the repairs, pre-pay for them and then subtract them from my rent. I mean all of this for $100/mo? I am gladly paying them that.

 

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[BellaPippin]

Hi guys it's me again, my brain is all over the place this week as you can see.

Goal: Buy multifamily home to live in/collect rent. Build up on that: manage portfolio of properties, make a humble living from rent income to free time.

Question: Did you just wing all this (buying process, knowing what to pick, what's gonna give you cashflow etc.), self taught yourself everything? What do you think of this degree's courses? (Check the sample courses). Even the sustainable development, urban economics thing I find interesting for future ventures I'd like to start (very interested in sustainable solution projects for homeless people, self-sustainable communities/housing, etc).

Please note:

• I've already completed my associates out of pocket, it's just the other half not the whole degree.
• My GPA is 3.9, I'm hispanic, woman, bla bla I might get a few chances at scholarships or aid, maybe (hopefully)
• I WOULDN'T DO THIS BEFORE FALL 2020 OR BEFORE I BUY MY FIRST PROPERTY -- I want to be debt free (which I am) at time of applying for first mortgage.

What are your thoughts? I google courses but it's all for broker, being a real estate agent, this encompasses more of making and running a business of real estate and manage leasing/assets etc. Haven't checked Udemy yet I just thought of that.

Thanks~

 

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[LightHouse]

I agree with @biophase , There isn't anything schooling is really going to do for you besides suck time and create more debt which will hinder your ability to get a loan. It's fairly basic math and a good bit of research.

@SteveO used to recommend the book how to buy and sell apartment buildings (can't remember the author) I would be that has the additional info you are missing and probably costs less than $50.

Have you researched small multifamily properties in your area already? what have you found thus far?

 

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[biophase]

No problem!

Take everyone's advice with a grain of salt and do your own research.

3.5% down on 4 units to control almost $1M in real estate while someone else pays the bill? Hell yes!

There are soooo many opportunities, tax incentives and ways to game real estate...it shouldn't be legal! lol

Leverage seems great and all until you have 2 empty units and you can't pay the mortgage. I used to play this game and it sucked if you didn't have a tenant or 2 things broke at once. You just deal with it. But one AC unit going out will put you in the negative for 2-3 years when extremely leveraged.

 

[BellaPippin]

That’s not true. You can get an FHA loan for up to 4 units which is considered residential.

FHA Loan Limits Increased for 2020 | The Lenders Network

The FHA loan limits have increased effective Jan 1, 2020. The loan limit in low-cost areas increased to $331,760 and to $765,600 in high-cost areas.

thelendersnetwork.com

You can tell that broker to shove it.

Well that made my day. I like the 3 unit brick ones with bay windows.

Just need to start saving like a MF

Thanks for letting me know!

 

[DustinH]

Thanks, yeah no I stopped at Associates. I don't see the point of a degree I guess I was looking for confirmation. Is the real estate license necessary for buying/selling? Or what exactly is it for?

You don't need a license to sell any real estate that you personally own or to buy anything personally. You need a license to help any other person buy or sell real estate. Though, the advantages for investors to have their license is:

a) make a commission when you buy yourself a property off the multiple listing service
b) save a commission when you sell your own property on the multiple listing service
c) have the opportunity for more deals to come across your desk

 

[BellaPippin]

Sounds like you want to do a House Hack (buy a small multi-unit, rent out part and live rent-free or close to it). BiggerPockets has a book devoted on the subject ("The House Hacking Strategy") coming out in October. I just finished an advanced copy of it, and it's probably exactly what you're looking for. You can pre-order here:

The House Hacking Strategy

✓ FREE shipping ✓ FREE bonuses ✓ 30-day guarantee | The average American household spends close to 33% of their income on housing expenses. With this book, you'll learn to save that money or even earn a profit! Get it from the BiggerPockets Bookstore today.

www.biggerpockets.com

The author of the book (Craig Curelop) is an awesome guy, and recently did a great podcast episode about House Hacking here:

House Hacking (Your First Deal) & Life Hacking with Craig Curelop

Today, we sit down with Craig Curelop, a new investor in the expensive Denver market, as he shares his story of buying his very first “house hack.”

www.biggerpockets.com

The House Hacking book goes into good detail on how to analyze deals, but if you want to dig into the topic even more, I highly recommend Brandon Turner's rental property investing book (this thing has literally been in the Top 1000 books on Amazon for the past several years):

The Book on Rental Property Investing: How to Create Wealth With Intelligent Buy and Hold Real Estate Investing (BiggerPockets Rental Kit, 2): Turner, Brandon: 9780990711797: Amazon.com: Books

The Book on Rental Property Investing: How to Create Wealth With Intelligent Buy and Hold Real Estate Investing (BiggerPockets Rental Kit, 2) [Turner, Brandon] on Amazon.com. *FREE* shipping on qualifying offers. The Book on Rental Property Investing: How to Create Wealth With Intelligent Buy...

www.amazon.com

I need it to be Wednesday today so I can download this, ugh


Also I thought I'd give you guys some good news... I got a new job offer and I'm gonna be making an extra $1000 a month. LOL. Guess who's gonna be saving like crazy for the duplex AND going to the summit! woohooooo~

 

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[Real Deal Denver]

As the other posters said just have a baseline of knowledge and you should be good to go. No degree necessary.

If you're looking for a book to get you started I recommend The Book on Rental Property Investing by Brandon Turner of Bigger Pockets.

I haven't invested yet but plan to in the next year and it's what I used to get started.

Property mgmt is something I've studied in depth. It is in my top five list of easy ventures to pursue. No inventory - easy to beat competition - and I work according to my system (looking at YOU @Johnny boy!). There are some genius people here that could really run with this and make it work. Thinking about it now, I'm wondering WHY I'm not following through and doing it. But, but, but... yeah I have reasons. Or are they excuses?

Let me throw some numbers at you so you see beyond one bldg. Property mgmt co's get 10% of the rent for their services. If rent is $2,000 (which is low for my area), that's $200 a month you get for managing it. How much money do you want to make a month? Multiply that by 30, and your income could be $6,000.

I won't go into the work itself, as that is more complex than can be covered here. But there is a roadmap laid out for you to think about now.

I had a friend and his wife managing over 100 properties. They had related side gigs that brought in a lot more money beyond that. He eventually sold his biz - which I scolded him for, as I would have run it for him and made it work for all of us. It isn't a fun or easy biz - but that's relatively speaking. Doing what I do (it's almost midnight now, and I'm working) makes this a cakewalk. If you want a punch the clock job, this will definitely not be for you.

With that said - why would you want a degree? A degree is good for getting you a job. My friend that did this did not have a degree. In fact, he came here from a different country and started out beLOW zero - not even knowing the language. He did very well. For example, he bought his mother-in-law a million-dollar home to live in (he owned it, but she lived there - investment thing...)

As you can see, this can be very lucrative. You can hire much of the grunt work out, so you're not going to be fixing toilets, etc. I forgot to mention because it's obvious to me - but he certainly did not own all these properties. He managed them for other people.

If you're going to do something, do it right. Think big. The only one that can hold you back is you.

Now you have something to roll around and think about. See the big picture.

 

[SteveO]

That’s not true. You can get an FHA loan for up to 4 units which is considered residential.

Yep...

 

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[PizzaOnTheRoof]

Well that made my day. I like the 3 unit brick ones with bay windows.

Just need to start saving like a MF

Thanks for letting me know!

No problem!

Take everyone's advice with a grain of salt and do your own research.

3.5% down on 4 units to control almost $1M in real estate while someone else pays the bill? Hell yes!

There are soooo many opportunities, tax incentives and ways to game real estate...it shouldn't be legal! lol

 

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[Bertram]

Hi guys it's me again, my brain is all over the place this week as you can see.

Goal: Buy multifamily home to live in/collect rent. Build up on that: manage portfolio of properties, make a humble living from rent income to free time.

Question: Did you just wing all this (buying process, knowing what to pick, what's gonna give you cashflow etc.), self taught yourself everything? What do you think of this degree's courses? (Check the sample courses). Even the sustainable development, urban economics thing I find interesting for future ventures I'd like to start (very interested in sustainable solution projects for homeless people, self-sustainable communities/housing, etc).

Please note:

• I've already completed my associates out of pocket, it's just the other half not the whole degree.
• My GPA is 3.9, I'm hispanic, woman, bla bla I might get a few chances at scholarships or aid, maybe (hopefully)
• I WOULDN'T DO THIS BEFORE FALL 2020 OR BEFORE I BUY MY FIRST PROPERTY -- I want to be debt free (which I am) at time of applying for first mortgage.

What are your thoughts? I google courses but it's all for broker, being a real estate agent, this encompasses more of making and running a business of real estate and manage leasing/assets etc. Haven't checked Udemy yet I just thought of that.

Thanks~

Have fun, you 're starting a great adventure.
Not sure you need the advanced degrees, in fact you will set yourself up for conflict of interest if you get involved in any municipal planning and stand to make a profit.
Keep ears to the ground but don't be a board member or commissioner or officer.

I learned real estate brokerage, taking over two years, in order to invest in rentals and flips. I property managed from college to present day.
I followed and went to work for a family legacy real estate broker, not a national franchise. He was someone who knew about property transactions going back decades and decades. He would make fun of the fluff taught in the real estate schools.
I also chose him because pyramid-style agencies like Keller Williams offer systematized but limited instruction. KW will never, ever teach their agents about how to save a deal that turns dirty or looks very unusual.
I went to work as a side hustle with the broker who will do deals with the most ruthless, dirty, wildly successful investment brokers around. No one else will teach you for instance how to spot defects that the seller did not disclose in paperwork before you make an offer, and then how to use the inspector's discovery to renegotiate a lower offer at the end of the inspection period. Or that you as a buyer under contract can privately ask the town for a code variance prior to purchase, get it passed at the next public meeting, and get the sale before the area buyers have a clue. The right mentor will teach you all the dirty moves realtors use to keep their listings off the market while they bring their own buyers in to earn buyer and seller commissions. If you spot this you can play better defense.
So have fun, it does take guts to thrive, and spend some time asking agents about the various brokers around. Find the one independent broker who will teach you the entire game.

About 90% of the realtors I met were dishonest dealers, but they still did not know 90% of the moves. I did commercial and residential transactions as a side hustle. That was a blast, especially because I could win outlier deals, and with a good conscience.

The big boys with 1200 units sometimes plot transactions years ahead. They'll wait for
properties to change hands a few times before their turn comes. This savvy, the investor 's soul, cannot be taught in real estate school. Not one started with an MBA, more like hard knocks, doing construction, owning junk yards. I like grit, plan get back in in five years.
Have fun!
I hope the bug bites and you stay in it for the passion of the hunt. And don't forget about how you'll have to provide for Old BellaPippin.

 

[biophase]

Are you sure you want to buy in Chicago? The real estate market history there is just not very good and on top of that you've got super high taxes.

Most of my friends live in Chicago and so do my parents. So I keep looking at buying a place there to stay at whenever I go back there, but I just can't justify it. The numbers don't work and there's virtually no appreciation. The house I sold in 2003 for $358k just resold for $369k last summer.

I'm curious as to what historical prices you see on the 3 flats that you are looking at?

 

[BellaPippin]

Thanks for the tag!

Here are some resources that I think will help (and if you start an execution thread, I'm happy to jump in with my thoughts and advice, as this topic is pretty much right down my alley)...

First, BiggerPockets is a great place to start for anything real estate related:

www.biggerpockets.com

Sounds like you want to do a House Hack (buy a small multi-unit, rent out part and live rent-free or close to it). BiggerPockets has a book devoted on the subject ("The House Hacking Strategy") coming out in October. I just finished an advanced copy of it, and it's probably exactly what you're looking for. You can pre-order here:

The House Hacking Strategy

✓ FREE shipping ✓ FREE bonuses ✓ 30-day guarantee | The average American household spends close to 33% of their income on housing expenses. With this book, you'll learn to save that money or even earn a profit! Get it from the BiggerPockets Bookstore today.

www.biggerpockets.com

The author of the book (Craig Curelop) is an awesome guy, and recently did a great podcast episode about House Hacking here:

House Hacking (Your First Deal) & Life Hacking with Craig Curelop

Today, we sit down with Craig Curelop, a new investor in the expensive Denver market, as he shares his story of buying his very first “house hack.”

www.biggerpockets.com

The House Hacking book goes into good detail on how to analyze deals, but if you want to dig into the topic even more, I highly recommend Brandon Turner's rental property investing book (this thing has literally been in the Top 1000 books on Amazon for the past several years):

The Book on Rental Property Investing: How to Create Wealth With Intelligent Buy and Hold Real Estate Investing (BiggerPockets Rental Kit, 2): Turner, Brandon: 9780990711797: Amazon.com: Books

The Book on Rental Property Investing: How to Create Wealth With Intelligent Buy and Hold Real Estate Investing (BiggerPockets Rental Kit, 2) [Turner, Brandon] on Amazon.com. *FREE* shipping on qualifying offers. The Book on Rental Property Investing: How to Create Wealth With Intelligent Buy...

www.amazon.com

And if you want to dig into the analysis math really deep, I have a book coming out early next year on the topic...

Happy to answer any specific questions if I can!

EDIT: Someone mentioned the Vollucci book, "How to Buy and Sell Apartment Buildings" earlier in this thread. Just wanted to point out that @SteveO turned me on to this book over a decade ago, and it pretty much got me started down the path of real estate (forever grateful to Steve for his help when I was starting!). It was a decade before I started doing large value-add apartments, but this book was instrumental in helping me get my head around the power of capitalizing income to make lots of money in real estate.

Thank you 3000! Yes that is exactly what I want, at least for the first property. I’ll start reading, basically I’m just trying to learn as much as I can while I’m saving money. Much appreciated.

 

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[Strategery]

Sounds right up my alley, I’ve pre-ordered it and might check the other one in the mean time or after I finish the upcoming one, thank you so much!

I listened to The Book on Rental Property Investing, it was dope. I really want the house hacking strategy book to come out lol

 

[tpuffer]

@JScott and @biophase are dropping straight gems for you!

I got my start listening to bigger pockets and reading Brandon Turner's book and J.Scott's book on estimating rehab costs. These are a great place to start.

My recommendation is thread those and then start evaluating properties in the neighborhoods that you're interested in - even if you think you can't buy them right now! It's important to get to know the areas, rents, and pricing - the books can't teach you that unfortunately.

Getting your real estate license could be great for the reasons laid out by @JScott. If you do decide to represent others - become a badass real estate agent! There are a lot of not so great agents out there and if you become great at it you can make great money to use to help you purchase rental properties.

Buying your first duplex is only level one - there are more levels to get to and achievements to be had!

 

[Strategery]

I'm in the process of doing this now, I've got the money, just looking for a decent place. Not sure if you've seen this thread or not, but its right up your alley:

GOLD! - REAL ESTATE - STOP Paying Rent: Live For Free

Fastlane brothers and sisters, I am here to show you the light should you so accept to see it. I’d like to offer some advice from my experiences and to share the wealth of living rent free. This is not a revolutionary topic, and I am not a revolutionary human. Living rent free has been done by...

www.thefastlaneforum.com

 

[PizzaOnTheRoof]

Checkout Graham Stephan and Meet Kevin on YouTube. Very good real estate advice for newbies.

Also don’t discount single family homes either.

Multifamily is sexy but way more competitive and a lot fewer deals.

 

[Guest24480]

As the other posters said just have a baseline of knowledge and you should be good to go. No degree necessary.

If you're looking for a book to get you started I recommend The Book on Rental Property Investing by Brandon Turner of Bigger Pockets.

I haven't invested yet but plan to in the next year and it's what I used to get started.

 

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[Roli]

Hi guys it's me again, my brain is all over the place this week as you can see.

Goal: Buy multifamily home to live in/collect rent. Build up on that: manage portfolio of properties, make a humble living from rent income to free time.

Question: Did you just wing all this (buying process, knowing what to pick, what's gonna give you cashflow etc.), self taught yourself everything? What do you think of this degree's courses? (Check the sample courses). Even the sustainable development, urban economics thing I find interesting for future ventures I'd like to start (very interested in sustainable solution projects for homeless people, self-sustainable communities/housing, etc).

Please note:

• I've already completed my associates out of pocket, it's just the other half not the whole degree.
• My GPA is 3.9, I'm hispanic, woman, bla bla I might get a few chances at scholarships or aid, maybe (hopefully)
• I WOULDN'T DO THIS BEFORE FALL 2020 OR BEFORE I BUY MY FIRST PROPERTY -- I want to be debt free (which I am) at time of applying for first mortgage.

What are your thoughts? I google courses but it's all for broker, being a real estate agent, this encompasses more of making and running a business of real estate and manage leasing/assets etc. Haven't checked Udemy yet I just thought of that.

Thanks~

Usually I'm a big advocate of university education, however in this case I wouldn't advise a course on how to buy houses.

Instead buy a book that has been reviewed recently called Never Split The Difference by Chris Voss. This will give you valuable negotiating tips, which is a large component of purchasing property.

Then browse the forum and the internet at large for good places to search for property and then just go for it.

 

[MoneyHacker]

I read a lot about real estate in the past but what i love the most is biggerpockets.com. Their podcast and forum is full of useful information.

 

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[BellaPippin]

and then when you get an order on etsy order from her in a dropship relationship

I'm in the process of doing this now, I've got the money, just looking for a decent place. Not sure if you've seen this thread or not, but its right up your alley:

GOLD! - REAL ESTATE - STOP Paying Rent: Live For Free

Fastlane brothers and sisters, I am here to show you the light should you so accept to see it. I’d like to offer some advice from my experiences and to share the wealth of living rent free. This is not a revolutionary topic, and I am not a revolutionary human. Living rent free has been done by...

www.thefastlaneforum.com

I agree with @biophase , There isn't anything schooling is really going to do for you besides suck time and create more debt which will hinder your ability to get a loan. It's fairly basic math and a good bit of research.

@SteveO used to recommend the book how to buy and sell apartment buildings (can't remember the author) I would be that has the additional info you are missing and probably costs less than $50.

Have you researched small multifamily properties in your area already? what have you found thus far?

Checkout Graham Stephan and Meet Kevin on YouTube. Very good real estate advice for newbies.

Also don’t discount single family homes either.

Multifamily is sexy but way more competitive and a lot fewer deals.

The book @LightHouse suggested was written by vollucci. The complete guide to buying and selling apartment buildings by Steve Berges.

I read these 20 years ago and used concepts from each to make a plan.

Although old, the information is still useful. Cap rates and such have changed but the processes are valid.

As the other posters said just have a baseline of knowledge and you should be good to go. No degree necessary.

If you're looking for a book to get you started I recommend The Book on Rental Property Investing by Brandon Turner of Bigger Pockets.

I haven't invested yet but plan to in the next year and it's what I used to get started.

Property mgmt is something I've studied in depth. It is in my top five list of easy ventures to pursue. No inventory - easy to beat competition - and I work according to my system (looking at YOU @Johnny boy!). There are some genius people here that could really run with this and make it work. Thinking about it now, I'm wondering WHY I'm not following through and doing it. But, but, but... yeah I have reasons. Or are they excuses?

Let me throw some numbers at you so you see beyond one bldg. Property mgmt co's get 10% of the rent for their services. If rent is $2,000 (which is low for my area), that's $200 a month you get for managing it. How much money do you want to make a month? Multiply that by 30, and your income could be $6,000.

I won't go into the work itself, as that is more complex than can be covered here. But there is a roadmap laid out for you to think about now.

I had a friend and his wife managing over 100 properties. They had related side gigs that brought in a lot more money beyond that. He eventually sold his biz - which I scolded him for, as I would have run it for him and made it work for all of us. It isn't a fun or easy biz - but that's relatively speaking. Doing what I do (it's almost midnight now, and I'm working) makes this a cakewalk. If you want a punch the clock job, this will definitely not be for you.

With that said - why would you want a degree? A degree is good for getting you a job. My friend that did this did not have a degree. In fact, he came here from a different country and started out beLOW zero - not even knowing the language. He did very well. For example, he bought his mother-in-law a million-dollar home to live in (he owned it, but she lived there - investment thing...)

As you can see, this can be very lucrative. You can hire much of the grunt work out, so you're not going to be fixing toilets, etc. I forgot to mention because it's obvious to me - but he certainly did not own all these properties. He managed them for other people.

If you're going to do something, do it right. Think big. The only one that can hold you back is you.

Now you have something to roll around and think about. See the big picture.

Usually I'm a big advocate of university education, however in this case I wouldn't advise a course on how to buy houses.

Instead buy a book that has been reviewed recently called Never Split The Difference by Chris Voss. This will give you valuable negotiating tips, which is a large component of purchasing property.

Then browse the forum and the internet at large for good places to search for property and then just go for it.

I read a lot about real estate in the past but what i love the most is biggerpockets.com. Their podcast and forum is full of useful information.

Thank you everyone, I don't care about the degree but I did get seduced a bit by the courses-- however you've given me plenty of good sources to learn the basics on my own, I was already guessing most of the people doing it don't have a degree in "Landlording". I don't want student loans either.

For those who asked yes I've been taking a look within Chicagoland and I've seen stuff I like, also felt bad because they were really good/cozy/cute places and I don't have the downpayment money yet.. @Vigilante shared with me resources for when I'm ready some time ago and I have those handy as well

A broker told me I can't do an FHA for something with more than 2 units so I'm looking at 2 units and hopefully a finished basement maybe I can low key rent to a friend or something to make it 3 rent incomes, so mortgage gets covered.

So thanks everyone I've taken note of all these books/channels and will visit the library While I'm saving the money I wanna make sure I know what to do once I have it.

 

[BellaPippin]

And don't forget about how you'll have to provide for Old BellaPippin.

Thank you! I'm also thinking about BellaPippin parents as well. I'm an only child and I'm not even in the same country so I either make it out of the slowlane or my hands are gonna be tied for many things.

 

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[BellaPippin]

This is where the books will come in handy. The income from three units would need to cover a multitude of items. This is only a partial list as there are always things that crop up.

Debt service
maintenance and repairs
utilities
legal and accounting
make readies (turnover)
Rent loss from vacancies
Loss to move-in specials
Lost rent from deadbeats
Capital improvements
landscaping
taxes (property and local)
insurance

Most people don't calculate enough of these expenses. These expenses are real and very dependent on location. People have rules of thumb that they use but I don't like them. An example would be using a percentage of income. A rule of thumb might be to use 30% of income for expenses.

Well, an apartment that collects $2000 per month vs. one that collects $800 would send that percentage all over the place.

In Arizona, I used $3500 per unit, per year for expenses. That was MY calculated number from experience.

Income will vary based on the rental market. In a low vacancy situation, people don't tend to move as much so rent losses may be lower. I would calculate based on the areas vacancy factor. If the rate was 5%, I would calculate 8% average rent loss. If the rate was 10%, I would calculate 20-22% rent loss

There is indeed so much I don't know about, better start reading.

 

[Pink Sheep]

Just a little note. It can sometimes be really cheap to make a kitchen and bathroom that is good enough for rental. If you have a shithole appartment, you can sometimes make it 2 apparments with relativly little work. Learn how electric and plumbing basics work, and you can save a lot by using whats there in stead of making everything new.