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Looking for some insight on purchasing and running a ground route
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<blockquote data-quote="FedGT" data-source="post: 2099668" data-attributes="member: 58838"><p>No it is not! Real estate investment is for people that have a lot of money to diversify. You are banking on appreciation not liveable income. Anyone that suggests rental income as a great investment does not have any business in discussing these topics way too far out of date. What you suggest is rents that pay for the loan, that can happen problem is most don't account for the age of the home, the maintenance (all out of pocket from your day job which adds up a ton when you rents are only possibly cash flowing the loan), property taxes, income taxes, vacancy- will happen. So basically if you want to drop $500,000-$2,000,000+ In a loan and have no ROI for 20-30 years you better be content working that day job cause you are not going to be making any money on that and heaven help you when we hit another recession. Now you can run the numbers on no loan- $600,000 for a run down 4 plex, rent at $1,500 a month best case scenario gross $72,000 a year, plan for taxes, vacancies, evictions, maintenance and you may clear $35,000-41,000 a year (7ish% ROI). May get your money back in 15-20 years.</p><p></p><p>I give you that it is classified for the most part a safe investment but I guarantee you that for every contractor that has "lost a route" (which is due to their own incompetence) there has been 10,000 people who have lost their a@& in real estate 80's, mid 90's, 2007-2010. Rental market is so over built right now that you are competing with that it is by no means a sure thing.</p><p></p><p>In your last post you reference leveraging home on home on home. Banks will not do that anymore and if you are dumb enough to after what history shows us, you deserve what you get from it.</p><p></p><p>SBA loans will loan on FedeRx routes so I don't know where that information comes from, relatively dated info again.</p></blockquote><p></p>
[QUOTE="FedGT, post: 2099668, member: 58838"] No it is not! Real estate investment is for people that have a lot of money to diversify. You are banking on appreciation not liveable income. Anyone that suggests rental income as a great investment does not have any business in discussing these topics way too far out of date. What you suggest is rents that pay for the loan, that can happen problem is most don't account for the age of the home, the maintenance (all out of pocket from your day job which adds up a ton when you rents are only possibly cash flowing the loan), property taxes, income taxes, vacancy- will happen. So basically if you want to drop $500,000-$2,000,000+ In a loan and have no ROI for 20-30 years you better be content working that day job cause you are not going to be making any money on that and heaven help you when we hit another recession. Now you can run the numbers on no loan- $600,000 for a run down 4 plex, rent at $1,500 a month best case scenario gross $72,000 a year, plan for taxes, vacancies, evictions, maintenance and you may clear $35,000-41,000 a year (7ish% ROI). May get your money back in 15-20 years. I give you that it is classified for the most part a safe investment but I guarantee you that for every contractor that has "lost a route" (which is due to their own incompetence) there has been 10,000 people who have lost their a@& in real estate 80's, mid 90's, 2007-2010. Rental market is so over built right now that you are competing with that it is by no means a sure thing. In your last post you reference leveraging home on home on home. Banks will not do that anymore and if you are dumb enough to after what history shows us, you deserve what you get from it. SBA loans will loan on FedeRx routes so I don't know where that information comes from, relatively dated info again. [/QUOTE]
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