appreciation

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You are here because you want to vent, so you searched “I hate my job.”

We all have that one job we hate. We might work at a place where the boss is mean, the workloads are too heavy, or maybe there’s been an issue with company culture for some time now and no amount of persuasion has worked to fix it.

If you’re reading this article right now, then you likely know exactly what I’m talking about; something just doesn’t feel as if it’s clicking anymore. The hours and days drag on trying to find your spark again and you’re just not getting anywhere.

You hate your job.

This is why it’s important to ask yourself if a career change might be the answer, or at least offer some insight into whether or not your job is worth keeping.

You hate answering the question, “what do you do for a living?”

While this may seem like an easy or daunting task, there are a few things that should help you figure out if the time has come for a change.

Are you at that moment that marked the end of any hope you may have to continue to work the job you have?

Is it normal to absolutely hate your job?

No, it’s not normal to absolutely hate your job.

Most people experience some level of dissatisfaction or unhappiness at some point in their careers.

What do you do when you hate your job but can’t quit?

You need to find a way to make this job work for you.

While it may be difficult to focus on anything other than how much you dislike your job, there are ways to make the job work for you and improve your situation.

Most importantly, you may need to adjust your expectations or find a way to deal with the negative aspects of the job.

If this is not possible or if it is not feasible, then it might be best to look for another job or transfer to a new boss.

How do you deal if you hate your job?

If you hate your job, it can be difficult to deal with. You may feel like you can’t escape or that your situation is hopeless.

However, there are things that you can do to cope and make the best of the situation:

  • You may find it helpful to talk to friends or family about what’s going on and see if they have any advice.
  • You can also try looking for other jobs or exploring options for transferring or quitting your job.
  • If all else fails, consider seeking professional help.

There are many ways to cope when you hate your job, and each person will react differently depending on their individual circumstances and personalities. However, most people find some way to get through tough times by proactively taking steps to find joy in their job.

How long should I stay in a job I hate?

Well, the answer depends on what your situation is and your personal options.

Staying in a job you hate pays the bills, but probably doesn’t help in the work-happiness balance.

You have probably run through all of the good excuses to miss work.

Below, you will find tips on how to cope, but more importantly, steps to change your situation for the better.

I Hate My Job – How You are Feeling in That Place

This is a difficult situation to be in.

You feel like you should love your career! You spent money on a college education, maybe this job is a transition for you, or possibly you took the job everyone expected from you.

Regardless of how you got here, you need to look for the right role and work environment for you going forward. Life stratification means something, right?

1. You’re Suffering from Workplace Burnout & It is a Problem

Workplace burnout is a condition in which an individual has reached the end of their rope. They’re no longer able to take the stress and demands of their job and are overwhelmed.

How You Feel: Workplace burnout can happen to anyone, but it’s particularly common among employees who are stressed out by demanding deadlines or unrealistic expectations from their boss. When you reach this point where you are no longer able to cope with the stress at work, you may experience symptoms such as mood swings, fatigue, and decreased productivity.

What to Do: If you feel like you’re struggling to keep up with your job and you’re starting to suffer from workplace burnout, there are some steps that you can take to get back on track. First, talk to your boss about what’s going on – explain that you feel overwhelmed by the demands of your position and ask for help adjusting your workload. If that doesn’t work, consider looking for another job – even if it means taking a pay cut in the short term.

Workplace burnout is a condition that can be debilitating, so don’t wait until it’s too late before trying anything else!

2. Your Work Is Overlooked and Undervalued

When people feel like their work is overlooked or undervalued, it can lead to a number of negative emotions. These emotions can include frustration, anger, and sadness. You want to hear “I appreciate you or get a letter.”

How You Feel: You feel like your work isn’t given the credit it deserves. This might be because the job is boring or mundane, or because you feel the work isn’t appreciated by others in the workplace. When this happens, it’s easy for these feelings to simmer down and fester.

What to Do: If you’re feeling frustrated at your job and don’t know what to do about it, consider talking to your boss. Discussing your concerns might help them see how important your work is and spark some ideas for how you could improve it. Additionally, contacting professional organizations that focus on career development can give you advice on where to go from here.

3. You’ve Been Stagnant for Some Time & Not Given Growth Opportunities

When you’ve been stagnant, you’re not moving forward or improving in any way – especially if you haven’t been offered a promotion. This could mean you’re stuck in a job you don’t like, haven’t taken any steps to improve your skills, or just aren’t making any real progress climbing the corporate ladder.

How You Feel: Stagnation can be frustrating and discouraging especially if you have been a loyal employee for a while. You are tired of being looked over for that promotion by a work colleague. You are wondering if you should dust off that resume and start drafting cover letters for a new job.

What to Do: There are many proactive things to do on your own when you feel stuck.

  1. Take stock of where you are right now. Sit down and make a list of all the accomplishments and successes that are linked to your current job. What does this say about how satisfied you are with your position?
  2. Evaluate what kind of skills you need to advance in your career. Do some research online or attend relevant training courses offered by your company or industry association.
  3. Think about what kinds of changes would make the biggest impact on both you and your company/organization that employs you. Are there new technologies available that could help streamline operations? Could new policies be put into place that would benefit the organization as a whole?
  4. Be proactive. Start reaching out to other professionals within your field and see if there’s anything you can learn from them. Networking is one of the best ways to grow your career, and it won’t take much effort on your part.
  5. Be patient. Things may not change overnight, but over time they will improve. Don’t get discouraged; stay positive and continue working hard towards your goals.

4. Your Workplace Is Toxic or Hostile

A workplace is considered toxic or hostile when employees feel uncomfortable, unsupported, or threatened. This can lead to decreased productivity and morale, which in turn can result in negative impacts on the business.

In fact, the toxic culture is driving the Great Resignation we are seeing right now (source).

How You Feel: When you don’t feel like you can open up about your concerns, it creates an environment of mistrust, tension, and poor communication between all of the employees and your managers. This type of environment is difficult to overcome, and will eventually lead to burnout.

What to Do: The best way to avoid a toxic workplace is by creating a culture of transparency and trust. By airing out any problems early on, you give yourself the opportunity to work together harmoniously towards common goals instead of against each other.

5. Be Careful About What You Say and to Whom

Be careful what you say to whomever you talk to online and in-person, as your words could potentially be taken out of context and used against you.

How You Feel: It can be tempting to share your frustrations with your job with friends or family. But before you do, make sure that they’re comfortable talking about work too. If they’re not comfortable discussing their jobs openly, it may not be the best idea to bring up yours either. And if someone does overhear you speaking negatively about your job, don’t worry – they probably won’t repeat what you said!

What to Do: When you talk to people, be careful about what you say and to whom. It’s important not to offend anyone, especially not your boss. You never know who might be listening in on your conversation – or recording it!

6. Take a break

Sometimes it’s tough to keep going when you’re feeling down about your job. But sometimes it’s important to take a break and focus on other things in life.

How You Feel: You feel like you are grinding and going in a million different directions. As soon as you feel like you get ahead, something knocks you down and you feel like you need to start over.

What to Do: Taking a break can be helpful in many ways. It can help you clear your head, refocus on your goals and come back with a new perspective.

Sometimes all we need is some time away from our job to get back on track.

If taking time off isn’t an option or you don’t think it will help, there are other things you can do to improve your situation once you feel a little more refreshed. Thus, why adult coloring books have become so popular.

7. Miserable in the Work Building

You want to feel happier and more productive at work, but that may happen by taking steps at home and with your family.

How You Feel: When you’re feeling miserable at work, it’s harder to focus on your job and perform at your best. You are counting down the seconds until your shift is over.

What to Do: Taking steps to improve your well-being outside of work can help you feel happier and more productive. This includes things like exercising, eating a healthy diet, getting enough sleep, etc. By improving one aspect of your life, you’ll be better equipped to handle stress in the workplace and achieve success.

8. Your Projects are Underappreciated

Many people believe that their work is just a necessary evil, something that they have to do in order to get by. But the truth is, your work is incredibly important – it’s what allows us to live our lives. Without a job, we would be unable to pay our bills or afford food.

How You Feel: According to a recent study, almost three-fourths of employees feel their job isn’t very important and receives little recognition from their employers. This is difficult when you pour your heart and soul into an assigned project at work.

What to Do: If you’re unhappy with your current situation and don’t think your work is receiving the recognition it deserves, there are probably some things you can do about it. Start by talking to your boss about what you’d like to see change – maybe there’s room for improvement in how your department is managed or prioritized. And finally, make sure you’re giving your best effort every day – if you’re putting in the extra effort but still aren’t satisfied with your career path, it might be time for a change.

9. Your Talents are Wasted and the Effects are Feeling Undervalued

When you feel like your skills and talents are not being appreciated or utilized to their fullest potential, this can lead to feelings of depression, stress, and burnout. Oftentimes, these negative emotions are compounded when we don’t have a clear idea of what we want in life.

How You Feel: Chronic undervaluedness can have serious consequences on our mental health. It can lead to feelings of low self-esteem and insecurity, which in turn can lead to problems such as depression and anxiety. Furthermore, undervalued employees are less likely to pursue career opportunities that may be better suited for them. This leaves businesses struggling to find qualified candidates and increases the chances that they’ll need to recruit externally in the future.

What to Do: The good news is that it’s possible to overcome feeling undervalued by focusing on celebrating yourself. In fact, I recently finished this book and realized I contribute to putting myself down more than others around me. Start by taking awareness of negative thoughts and make a swift change to change them to the positive.

10. There Has Been an Uncomfortable Change in Leadership

This tends to lead to the most job-hopping because of an uncomfortable change in leadership, which can lead to a number of different emotions.

How You Feel: More likely, you feel one of the most common reactions of sadness, confusion, and anger. When a leader is replaced or leaves a position of power, it can be confusing for the people who work under them. This can lead to feelings of sadness and loss, as well as confusion about what’s going on. You may also become angry because they feel like your position is threatened.

What to Do: It’s important for leaders to communicate with their employees about the changes so that everyone understands what’s happening and feels comfortable using the new leadership structure. This will help reduce the amount of confusion and chaos at work, which will ultimately improve morale. If this doesn’t happen, then try to sit down with your new and old boss for a discussion.

11. Your Values No Longer Align

This can happen when new management comes into the work environment or a personal shift in life notification for you. When your values no longer align with those of the job, it can be difficult to stay motivated.

How You Feel: When you first accepted the job offer, everything felt right. You were excited about the challenge and the new opportunities that this new position would bring. However, after a few months, you start to notice some discrepancies between your values and what is required of you in your current role.

For example, you may not feel comfortable using profanity at work or participating in unethical behavior. In fact, you may even feel morally opposed to these behaviors.

What to Do: If your values are no longer aligned with those of the job, it can be hard to stay at the job because you no longer see any value in what you’re doing. This can lead to feelings of frustration and dissatisfaction.

Additionally, consider job-hopping and start scheduling interviews for another job that better aligns with who you are as a person and what matters most to you. When you find a job that you love and feel passionate about, it will be much easier to stay motivated and happy in your work environment.

12. Your Confidence Is Dwindling

It is deflating when work is off sync and nothing seems to be working out how your hopes. You know their adjustments to be made, but you aren’t sure where to start

How You Feel: When you’re feeling down about your job, it can be hard to believe that anything could make things better. But the truth is, there are plenty of ways to get through a tough time.

What to Do: Here are four ways to boost your confidence and start thinking positively again:

  1. Talk to someone you trust. Talking out your problems with someone who will listen without judgment can help you feel more relieved and less stressed.
  2. Take some time for yourself. Whether that means taking a walk outside or indulging in a favorite hobby, spending time alone can help relax your mind and body and clear your head.
  3. Set goals for yourself and work towards them one step at a time. When you have something concrete to aim for, it becomes much easier to stay motivated during challenging times.
  4. Believe in yourself! Even if the world seems like it’s against you right now, remember that everything will eventually work out as long as you keep fighting for what’s important to you.”

13. I Really Hate My Job & Think It Is Time for a Job Search

There are a few different ways to quit your job and make the switch to a new career. You can search for job openings online, contact your local employment agency, or speak with an advisor at a career center.

How You Feel: Quitting your job is not always easy, but it’s worth it if you’re unhappy with the situation. There are many benefits to quitting your job, including increased income (yes, a raise!) and more time for yourself.

What to Do: Searching online is the fastest way to find jobs that match your skills and interests, but be sure to read all of the applicable links before applying. If you’re looking for advice on how to quit your job without ruining relationships or getting fired, speak with an advisor at a career center. They can provide guidance on how best to proceed and minimize potential damage.

15. When you Hate Workplace – Don’t Burn Bridges

Burning bridges can have serious consequences, both for yourself and your career. By staying neutral in confrontations, you may be able to salvage your reputation and future relationships.

How You Feel: When disagreements arise at work, it’s important not to take the bait and lash out. Doing so could lead to long-term damage that could complicate your job situation and future career prospects.

What to Do: Instead, try to remain calm and diplomatic – this will show that you have good judgment and aren’t easily provoked. If you need to speak up, do it constructively and with the goal of resolving the issue rather than hurting someone’s feelings or damaging their relationship.

16. Your interests & skillsets have changed

If you’ve been working at your job for a while and it’s not fulfilling you anymore, it might be time to consider a change. Maybe you have been learning a new skill set that you find more interesting.

How You Feel: Your interests may have changed since you first started working, or you may have outgrown your current position. It’s important to remember that there are plenty of other opportunities out there – even if they don’t involve a nine-to-five schedule.

What to Do: When we’re unhappy with our work, it can be tough to discuss the situation with our boss or coworkers. But if we’re not happy, they’ll eventually notice and it’ll create an uncomfortable work environment. Change can be difficult at first, but it can lead to greater satisfaction in the long run.

17. Know It’s Not Just You

There’s a lot of talk about the recession and how it’s affecting everyone, but what about the people who are just trying to survive? This is a common struggle people are facing at work.

How You Feel: Work can be challenging, especially during tough economic times. Many people are feeling stressed out and depressed at their jobs, and there doesn’t seem to be an end in sight.

What to Do: However, there are ways to cope with the stress and difficulties of work. You need to learn strategies to balance the work-life situation. Talking to friends or a trusted professional will help you get back on track.

I hate my Career – Ways to Cope

Everyone hates their jobs sometimes.

This is especially true when you are stuck in a career that doesn’t serve your values and goals, or one with very high-stress levels. If this sounds like the case for you, then it is time to evaluate your next move.

However, many people are reluctant to make such changes because of the risk involved and uncertainty about what comes next.

It is important to be aware of what is driving your internal hatred about your job, your boss, or your situation.

1. Assess Your Situation & the Industry

If you’re feeling depressed or lost in your career, it’s important to take some time to assess where you are and where you want to be. This is a process of looking at your current situation and making a plan for how to get there.

  • Are you unhappy with your current job because it is not fulfilling, or are you just bored?
  • Perhaps the work environment is too stressful for you to handle?
  • Do you believe you should be making more money?

The first step in coping with a negative career outlook is taking the time to reflect on where you are right now. You can use this assessment to figure out what needs to change in order to improve your situation. Once you have a good idea of what needs improvement, it’s easier to make the changes that will get you closer to your goals.

Also, look at the overall industry trends to you see industry-wide trends affecting job quality and life satisfaction. More often than not, it might be others in your field feeling the same.

2. Have the Tough Conversations

Tough conversations can be difficult, but they’re essential if you want to improve yourself and your career. Every time you have a tough conversation with yourself or someone else in your work life, you’ll learn something new and make progress.

There are three types of tough conversations you need to have:

  1. The “What If” Conversation – This is the conversation where you ask yourself what would happen if X happened. This helps you prepare for possible challenges and makes sure that everything is in order before taking action.
  2. The “Doing Better” Conversation – This is the conversation where you commit to doing better next time, regardless of the results so far.
  3. The “I’m Sorry” Conversation – This is the conversation where you apologize for how things turned out and vow to do better next time.

Tough conversations are not easy, but they are essential if you want to achieve your career goals. Be brave enough to have them and take advantage of all that they can offer!

3. Switch Your Perspective

If you’re feeling down about your career, take a step back and think about how you can see it from a different perspective.

When we’re upset or unhappy with something in our life, it’s easy to focus on the negative aspects. However, by switching our perspective, we can start to see the situation in a new light.

For example, if you hate your job but don’t want to change careers, try thinking about how you could see it as an opportunity for growth. Instead of focusing on what you don’t like about your job, consider all the ways you’ve learned and grown since starting work there.

We all have moments when things don’t go our way – by changing our perspective, we can start to feel better even when things are tough. In fact, this is why we stress mindset is everything.

4. Vent About It

When people feel frustrated or overwhelmed with their job, they may want to share their feelings with others. This behavior is often referred to as “venting.”

Venting can be helpful in relieving stress and tension. It can also help people process their thoughts and emotions, which can lead to positive changes in their lives.

Many people use social media to vent about their career frustrations. This is especially common among millennials, who are more likely than any other generation to use social media platforms for self-expression. One of the benefits of using social media for venting is that it allows you to connect with like-minded individuals who understand your situation. This network of support can be incredibly helpful in overcoming challenges in your career path.

5. Get Your Finances in Order

When you’re feeling down about your career, it can be tempting to think that you have no other choice but to continue to work at a job you hate. However, by getting your finances in order you can start to feel more optimistic about your future.

Especially for those in the, I don’t want to work anymore boat, this is the time to start saving money to invest for your future self.

Setting money aside will provide a cushion if you choose to leave your job unexpectedly or breathing room when changing jobs.

This is something we personally did when my husband wanted to change jobs due to being overlooked for promotion after promotion.

6. Do Your Best Work

Doing your best work means putting your all into whatever you’re doing. It means giving it your all, no matter what the task or situation. This may be hard, but it is essential!

When you do your best work, you put in the effort and energy that’s necessary to be successful.

You don’t half-ass things because you’re worried about how people will think of you. You go all out and give it 110%, no matter what. And that goes for everything in life – from your career to relationships to anything else that matters to you.

There are a lot of times when we don’t feel like doing our best work because we’re doubtful or scared. But if we keep pushing through those tough times, eventually we’ll reach a point where doing our best work becomes second nature. And then success will follow naturally as a result!

So don’t wait – start doing your best work today and see the amazing results for yourself!

7. Brainstorm Your Dream Job

Brainstorming your dream job is a great way to get inspired and motivated. It can also help you identify skills and interests that you may not have known you had.

When brainstorming your dream job, it’s important to be open-minded and think about any career possibilities that interest you. This could include fields that are completely new to you or areas of your current job that you don’t enjoy as much.

Once you’ve come up with a few ideas, it’s time to start thinking about what qualifications would be necessary for the job. Do some research into the specific requirements of the position and see if any of your skills or interests align with those requirements.

By brainstorming your dream job and taking these steps, you’ll be on your way to finding the perfect career fit and a happy you!

8. Start Making Connections & Build Relationships

Making connections is a key part of coping with a negative career situation. It can help you find comfort in the fact that you’re not alone and connect with people who have gone through similar experiences.

When things are tough, it’s often easy to feel like you’re all alone in your struggles. But by making connections with other people who are going through the same thing, you can start to feel less isolated and more supported. You’ll also be able to share your experiences and learn from others, which can help you overcome obstacles faster.

There are many ways to make connections online – through social media platforms, online communities like Reddit, or even just talking to friends or family members face-to-face. The important thing is to find an outlet that feels comfortable for you and allows you to express yourself freely.

Also, this avenue may lead to a new job opportunity for you.

9. Develop Other Sources of Income

Around here at Money Bliss, we stress the importance of having multiple streams of income.

While your 9-5 may pay your bills, you need to investigate other types of income to really improve your financial situation.

This can be done in a few ways:

  • Finding new (or returning) employment or 2nd job.
  • Starting a business.
  • Freelancing.
  • Make money with a gig economy job.

Each option has its own benefits and drawbacks, so it’s important to weigh them all carefully before making a decision.

When considering other forms of income, it’s important to keep in mind the following factors: how much time you have available, what you’re willing to sacrifice (including your free time), your skills and experience, and the marketability of your skill set.

I Hate my Boss – Resign With More Class

If you’re unhappy with your job, there’s no need to stay in a situation that is causing you distress. You can resign with class and maintain the respect of your coworkers and boss. Here are some tips on how to do it:

1. Address Your Issues Clearly

When you decide to leave, be clear about why you’re leaving and what your plans are for the future. It’ll help everyone involved understand the reasons behind your decision and avoid any misunderstandings or hurt feelings.

2. Be Polite When You Resign

Don’t make a scene or give anyone the impression that they were wronged in any way. Simply express your appreciation for all they’ve done for you over the past few months or years, thank them for their time, and let them know that you wish them all the best in future endeavors.

3. Most Importantly – Keep Your Work Adjustment Quiet

Your personal life doesn’t have to intersect with work-related decisions until after everything has been finalized – don’t announce your resignation at work or start bargaining terms before actually deciding if it’s what you want to do!

4. Make Sure You Have The Right Legal Documents At Hand

You’ll need documentation confirming your employment status, your dates of employment, and the terms of your separation. Make copies for yourself and store them in a safe place – you may need to refer to them during the negotiating process.

5. Give Yourself Time To Adjust to a Happier Well-Being

Don’t expect everything to fall into place overnight; give yourself plenty of time (perhaps several weeks or even months) to adjust before getting back into the workforce. During this time, it can be helpful to take some time away from work altogether, focus on relaxation techniques like yoga or meditation, or read about career options that interest you.

Which Step Are You Going to Focus on When you Hate Working?

In this article, we discussed some common struggles that people face at work and offer some advice on how to cope. We hope that by sharing our knowledge and experience, you’ll find relief or guidance in dealing with your own job problems.

There are many reasons for workplace unhappiness and changing careers may or may not be the solution to your issues.

When looking for another position, keep in mind that employers are always searching for talented individuals who will fit into their team and contribute positively.

Finally, don’t forget… Talking about your struggles openly can help ease them and give you some ideas for solutions.

Just keep moving forward and don’t give up on your dreams!

Do Your Job With Less Stress Job Ideas:

Maybe it is time for a shift change and moves to one of these careers.

Know someone else that needs this, too? Then, please share!!

Source: moneybliss.org

Apache is functioning normally

Save more, spend smarter, and make your money go further

As we ring in the New Year, financial resolutions top our to-do lists, from saving more to finding a new, better-paying job and getting out of debt once and for all.

As you map out your next money move, take heed of some of these top market and economic predictions for added guidance.

Higher Borrowing Costs

Looking to open a new credit card or apply for a mortgage this year? It may be wise to act sooner than later.

With the broader economy improving since the financial crisis (e.g. the national unemployment rate is hovering at 5%, down from nearly 10% in 2009), economists, including Janet Yellen, chairwoman of the Federal Reserve, believe it’s time for a tightening of monetary policy (translation: boost interest rates to curb inflation.)

Fortune Magazine’s “Crystal Ball,” says we can expect a three-quarter-point increase by next Thanksgiving to 1.25%.

When the Fed raises the overnight bank-lending rate (aka the Fed Funds rate) that typically has a domino effect on interest rates for other mainly short-term financial products like credit cards and car loans.

What this means for us? If you’re in the market to borrow money, I recommend reviewing your credit ahead of any applications to see what improvements (if any) are necessary. The higher your credit score, the better chances you have of achieving the lowest interest rates on the market.

If you’re seeking to refinance or buy a home this year, also aim to lock in a rate as soon as possible. While an increase in the Fed Funds rate isn’t necessarily a precursor to higher mortgage rates, we’re already seeing an uptick on 30-year home loans to above 4%. And Fannie Mae’s National Housing Survey shows that more than 50% of consumers think mortgage rates will continue to elevate over the next year.

Finally, for those of us with adjustable rate loans (e.g. some student loans and mortgages) we may want to pay off our debt more aggressively or refinance to a fixed-rate loan to put a lid on rising monthly payments down the road.

Less Sticker Shock in Housing

With home loan rates expected to track north, home values may see some cooling in 2017. That’s because when mortgage rates jump, demand for housing tends to slowdown, placing pressure on sale prices.

Not to mention, after riding a hot streak in recent years with prices across the country hitting near pre-recession levels, real estate experts at Zillow.com now predict a “normalizing” market with more moderate price growth of 3.6% across the country in 2017, compared to 4.8% last year.

Prepare for more affordability in areas that have experienced the steepest gains. In Los Angeles, for example, home prices have trended considerably higher in recent times (up 7.3% over the past year, alone). In 2017, though, the city can expect a tempering of home values to a growth of just 1.7%, according to real estate website Zillow.com.

As for rentals, after double-digit surges, rents in many large metro areas will also see slower growth in 2017, per Zillow. Rents across the country are expected to rise approximately 1.7 percent this year to about $1,429 per month, down from a 6% appreciation reported last year.

Partly to blame for the cool down in rent is a glut in inventory. Builders were very busy over the last few years, but the demand for new units in some hot neighborhoods like Brooklyn, N.Y. is failing short of supply.

As a result, some landlords at higher end luxury apartment buildings in that borough have been striking sweet deals with renters since last summer, The New York Times reports.  For example, at 7 DeKalb, a new high rise in Brooklyn, “the landlord is offering two months of free rent with a 14-month lease, and use of the building’s fitness center and other amenities for a year without charge.”

That’s a good reminder to prospective renters everywhere that it can never hurt to negotiate, especially this year!

Have a question for Farnoosh? You can submit your questions via Twitter @Farnoosh, Facebook or email at [email protected] (please note “Mint Blog” in the subject line).

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.

Save more, spend smarter, and make your money go further

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Apache is functioning normally

Last night, Kris and I had dinner with Craig and Lisa. Craig is an architect. Lisa is a technical writer who has spent the past few years as a stay-at-home mother. (Lisa contributed two GRS guest posts last year: How to find great deals on eBay and Career advice for the college graduate.)

Now that their children are a little older, Lisa has the itch to return to the workplace, to find some non-motherly pursuit to fulfill her. (She’s a great mom, by the way, but she does have other aspirations.) She’s now in her second term at a local university, studying to obtain a degree in graphic arts. She’s taking just one evening class per term, but she loves it. This is something she’s wanted to do for a long time, and she’s juggled her life to make it happen.

After Lisa finished telling us about her classes — art history and Photoshop — I mentioned that I’d been thinking about going back to school, too. “One thing about making my living as a writer,” I said, “is that it allows me freedom of hours. I can work when I want. I’m not sure I’m ready to take on another responsibility, but if I wanted to, I feel like I could pursue any degree I wanted: finance, computers, history.”

We talked about how different it is to go back to school as an adult. The four of us all attended the same small college (Willamette University) during the late eighties and early nineties, and we’ve each had some post-college education. Craig went to architecture school. Kris obtained a masters in teaching, and then took some additional science courses. A decade ago, I spent about a year studying computer programming. And now Lisa is pursuing art. College is much different as an adult than it is just after high school.

“I remember having non-trads in class and thinking they were strange,” Lisa said. “They seemed like they were from another world.”

“Yeah,” said Kris. “I always felt like they were out of touch, like they didn’t have any reference point for my life.”

“Right,” said Lisa. “But now I look at the students in my class and I realize it’s they who don’t have a reference point for my life. Now I realize that the non-traditional students did know what it was like to be young, but it’s impossible to know what it’s like to be older until you’ve lived it. I’m sure I just seem like a housewife to a lot of my classmates — they don’t understand everything that’s led to where I am now.”

“I never understood why non-trads actually went to college,” I said. “I looked down on them. But I was an idiot. Now when I see somebody our age going back to school, I think it’s awesome. I realize how difficult it is to do that, the sacrifices a person has to make for career, for family, for leisure. If you decide to go back to school as an adult, it’s a huge commitment.”

“I always wonder how they can afford it,” Craig said, and we laughed. It’s true that the financial commitment can be daunting. When you’ve been in the workplace for ten or twenty years, you have a greater appreciation for what it means to spend $5,000 or $10,000 or $20,000 on an education.

I’ve thought a lot about our conversation this morning. I realize that what I admire so much about non-traditional students is that they set goals and they pursue them. When most young adults go to college, they don’t have a clear conception of what they’re doing, what the alternatives are, and what sort of career they’d like to pursue. But when a 37-year-old mother goes back to school, she has an aim in mind. She has a purpose. Her goals keep her focused.

It’s this focus that I admire in Lisa’s return to college. Lisa’s situation reminds me of Donna Freedman, one of my editors at MSN’s Smart Spending blog. Donna is making a similar transition. She’s surviving (and thriving) on $12,000 a year while returning to school as a “mature student”. She writes:

How am I doing? Better than I ever have, thanks, despite grammar nightmares caused by the Spanish subjunctive in adverbial clauses of interdependence. I never knew life could be this busy, this overscheduled — or this rewarding.

[…] I already have everything I need and some of what I want. Some people call that “voluntary simplicity.” I think of it as living mindfully, i.e. deciding what’s really important and working toward it. For me that means finishing the degree, saving for a home and helping the people I love.

In other words, Donna has focus. She has goals, and these goals keep her happy.

I love to watch people pursue self-improvement, which is exactly what Lisa and Donna are doing. Perhaps it’s because I spent so long — fifteen years! — without goals of my own, but now when I see other people striving toward a destination, I cannot help but cheer them on.

Source: getrichslowly.org

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Margin is debt. You borrow capital from your broker to buy more assets, in most cases stocks.

This gives you leverage. You are making a bet that your returns on the investments you buy on margin are going to be greater than the interest rate you pay your broker for the privilege, net of commissions.

If they are, you pocket the difference. If not, then you have to make your broker whole.

Since the broker uses the assets you already own in your account as collateral to satisfy your margin, investing on a margin is very similar to buying a house on mortgage.

The only difference being that when you invest, you do not have to make monthly margin payments and the broker is generally not too worried if you ever make any effort to reduce your margin as long as there is sufficient value in your investments to cover for it.

The similarity does not end here. Taking on a mortgage to buy a house can be good, or bad. It depends a lot on who, how, why, and the level of financial savvy of the borrower. Investing on margin is the same way.

If you understand how it works, use it judiciously, and can manage your risk well, it can help you generate nicer returns. On the other hand, if you are not disciplined enough, or misuse it or get carried away chasing a hot stock, it can drain your account dry.

When to Not Use Margin?

In this case, I think it makes better sense to eliminate the situations where margin should not be used before we talk about the situations where it makes sense to use it. Sure, there are always exceptions, but these principles hold true for most common investing scenarios.

Principle #1: Do not use margin to buy interest-bearing assets that yield lower than your margin interest

Yes, you can buy bonds of all varieties, treasuries and many other assets that throw out reliable yield. Most of the time, because of the perceived safety of these instruments, the brokers will allow you to lever up more than 1x, which means that $1 of your collateral might allow you to buy $3 of municipal bonds (as an example).

Theoretically, if the yield on this muni is more than 1/3rd of the interest rate on your margin, you could possibly make a few basis points of supposedly “risk free” income.

The problem arises if the interest rates move and the slim window of profit can quickly flip into a cash flow drain. Besides, anything that complicates your investing so much for returns so small is not worth doing.

Principle #2: Do not use margin to buy stock in a utility company, REIT, MLP or other type of Trusts

Similar principle as above. Any stock that is mostly used to generate a current income in form of dividends is not a candidate to buy using margin. In most cases, the yield will be lower than your interest rate, and capital appreciation may not be enough to make up for it.

If you are buying stocks for income, you are likely a conservative investor and margin just adds more risk that you should not carry.  Dividend investing is not a bad thing; just not recommended on margin.

Principle #3: Do not use margin to make a down payment on a car, boat, or a house

Just because you can borrow money from your broker to make a down payment does not mean you should do it. In this case, you are borrowing money which will become a basis for more debt (car loan, mortgage, etc).

If you have to do it, that means you are not financially strong enough to buy or invest in these assets. Multiple levels of leverage are financial insanity and can come back to bite you much sooner than you think.

But using margin is not all bad if you know how.

When and How to Use Margin

Too much debt kills, but a little debt can go a long way towards giving you financial flexibility. However, it is important to use margin as a tool only when you have a good investment that you are not able to get in otherwise. Let’s take a few examples

Example #1: A great investment opportunity arises and you are temporarily short of capital

It often happens that your next contribution to your investment account is a few days or perhaps a week away, and it can easily cover the amount you are going to invest in this opportunity. Assuming this is not a hot tip stock, and you have satisfied yourself of the merit of the investment, go ahead and use margin to start your position. In a few days you will send in more cash and your margin will be covered.

Example #2: Using margin as an emergency fund

If you have a need for cash that cannot wait – for example, an unexpectedly large tax bill, where the consequences of not paying full taxes on time are greater than the interest on the margin, it is okay to go ahead and borrow on margin. In many cases, you may need time to figure out which investments to sell to cover the margin, or perhaps you can do it over time with your income.

Example #3: Year-end tax planning

Let’s say you have a few investments you want to sell so you can redeploy capital in other more attractive investments. If your current investments have significant capital gains, you may want to wait for the new year to sell them so as to not incur additional taxes in the current year.

However, due to traditional tax selling by investors and funds, many investments become quite attractive towards the year-end, which you may want to take advantage of.

Proper use of margin will allow you to bridge the temporary capital gap. For a disciplined investor, margin should always be used in moderation and only when necessary.

When possible, try not to use more than 10% of your asset value as a margin and draw a line at 30%. It is also a great idea to use brokers like TD Ameritrade that have cheap margin interest rates. Remember, the margin interest compounds as long as you keep the margin open.

About the Author: Shailesh Kumar writes about stocks and value investing at Value Stock Guide, where he offers individual stock picks and ideas to registered members. Subscribe to his free stock newsletter for investment ideas that you can use to research further.

No matter the type or amount of investment GoodFinancialCents.com is here to help. Whether it be investing $20,000 or how to invest $500000, we want to help you make the most of your investments!

Source: goodfinancialcents.com

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The United States is an amazing place to invest in real estate or buy real estate as an owner-occupant. The US has some of the best financing options, most choices, most secure real estate, and yes even some of the most affordable real estate in the world. While the US is a great place to be a landlord, not every state has the same laws or advantages. Some states are making it harder to be a landlord to the point where investors are looking to other states to invest in. This article goes over what the best states and worst states are for landlords based on a number of factors I put together and weighted based on how important they are. I have been a landlord, flipper, and real estate broker for many years and I see my local state of Colorado slowly becoming less landlord friendly. You can see Colorado’s ranking as well as every other state below.

Does Landlord-friendly mean tenant unfriendly?

Before I get into the rankings there is a lot of landlord hate in the world these days. Just because a state is landlord friendly does not mean it is bad for tenants. In fact, many of the states that are the most friendly to landlords, are the cheapest for tenants to live in. The problem with states that make it harder on landlords is that those restrictions make it more expensive to be a landlord. If it is harder and more expensive to be a landlord, landlords have to raise rents to make it worthwhile to do business in those areas or they may choose to sell. If there are fewer rental properties, that also means rents will rise higher thanks to supply and demand.

Landlords and tenants can work together and coexist without having to fight each other. One of the biggest misconceptions out there is that landlords are buying all the houses and making it impossible for first-time buyers to purchase. The facts, show landlords selling many more rental properties than they are buying and the owner occupancy rate is going up. This is decreasing the number of rentals and pushing rent prices up as well as purchase prices. If you want more affordable rent, you want more landlords!

What are the most landlord-friendly states?

I made this list based on a number of factors including:

  • Crime
  • Population change
  • Median house value
  • Time to evict
  • Property taxes
  • Insurance rates
  • Unemployment
  • Vacancy rates
  • Rent control

I used the most recent sources I could because the world has been changing fast in the last few years, and I weighted the categories differently based on the importance of each factor. I will be changing and updating this list to make it as accurate as possible. If you have suggestions please leave them below. I would love to hear about new laws being passed as I may not hear about them as soon as locals to those areas.

The lower the score the better for this ranking!

Rank State Score
1 Alabama 63
2 Wyoming 75
3 Kentucky 78
4 Florida 78
5 Iowa 81
6 Idaho 85
7 Montana 87
8 West Virginia 88
9 New Hampshire 90
10 Arkansas 92
11 Arizona 92
12 Oklahoma 92
13 South Carolina 92
14 Nebraska 95
15 Wisconsin 96
16 Delaware 96
17 Indiana 97
18 Maine 97
19 Tennessee 99
20 Utah 99
21 Georgia 102
22 North Carolina 102
23 North Dakota 102
24 Vermont 104
25 Mississippi 104
26 Ohio 106
27 South Dakota 106
28 Nevada 106
29 Louisiana 107
30 Kansas 110
31 New Mexico 110
32 Missouri 111
33 Virginia 112
34 Pennsylvania 114
35 Colorado 116
36 Connecticut 119
37 Michigan 120
38 Rhode Island 122
39 Alaska 124
40 Massachusetts 125
41 Hawaii 129
42 Minnesota 133
43 Texas 134
44 Washington 140
45 New Jersey 144
46 Maryland 147
47 Illinois 149
48 Oregon 157
49 New York 164
50 California 169
51 District of Columbia 182

How did I come up with a Landlord friendly list?

I have put a lot of thought into this list as there are many others online that I do not agree 100% with. Many lists include income taxes or other factors which do not impact investors unless they live in that state. This list is meant to show how friendly states are based solely on rental properties in that state, not the advantages of living there.

I have weighted the list based on the importance of these categories. The price of real estate is the number one weighted category where as insurance is important but not nearly as important. I thought about adding a category for appreciation but it is so hard to know what areas will appreciate and I think appreciation should be thought of as a bonus for rentals, not the end goal. Many of the categories like population gains will contribute to appreciation as well.

I will not post the entire data set here, but I will create a YouTube video going over all of the data soon on the InvestFourMore YouTube channel. Be sure to subscribe there so you are notified when that video is live! I will also post the sources for all my data below.

If you want to learn more about investing in rentals check out this article: How to Get Started Investing in Rentals.

Sources:

Build a Rental Property Empire

Categories Rental Properties

Source: investfourmore.com

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Last Updated on March 29, 2023 by Mark Ferguson

I am a big believer in making big goals and one of my goals is to purchase 100 rental properties by 2023. I have been a real estate agent and investor for more than 15 years, and I love the income my rental properties provide. Buying 100 rental properties will allow me to retire with more than enough money to reach my current dreams and goals. I do not want to buy 100 properties quickly without concern for the returns or risk. It takes a lot of money, time, and effort to buy 100 properties in the right way. I only buy houses that are well below market value and have great cash flow.

I first wrote this article in 2013, but have tried to update it frequently. I now have 20 rentals that make me over $10,000 a month after expenses. I am way behind on my goal, but many things happened that I could not have predicted like our housing market going crazy. I have bought commercial properties in the last few years instead of residential because they have been better money makers in my market.

Why I made a more challenging goal

In 2010, my original goal was to buy 30 rental properties in ten years. I based that goal on what I thought I could realistically achieve when I started buying rentals. A couple of years ago, I realized my goal was too easy because I knew I could buy 30 houses in ten years. I had given myself no room for improvement in my investing strategies or real estate business! At the start of 2013, I reworked all my goals including my rental property purchase schedule. My new goal was to buy 100 rental properties by January 2023 because it challenged me and would make me work hard. I had no idea when I first made this goal how I could buy 100 rental properties, but that is why we make big goals; to challenge us to do more and to change the way we do things.

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Why real estate?

I want to buy 100 rental properties because of the income and freedom that 100 houses will give me. I make over 15 percent cash on cash returns on my rentals because I purchase them below market value with great rent to value ratios. If I can buy 100 rental properties with the current cash flow requirements I have, I will make a lot of money. According to my calculations, I will be making over $900,000 a year in cash flow, have at least 60 houses paid off, and have over 11 million in equity in my rental properties. Those figures are not adjusted for inflation and assume no appreciation or rent increases. That kind of income should allow me to afford whatever my family and I want and allow us to do whatever we like. We only live once and I want to get everything that I can out of life.

The first part of this article discusses the philosophy behind buying 100 rental properties, why it is important to have big goals, and why it is important to think big. The second half of the article discusses the numbers and a detailed purchase schedule.

For more great tips, check out the InvestFourMore Instagram page.

Is it possible to purchase 100 rental properties?

To be completely honest, I do not know how I am going to buy 100 rental properties by January 2023. I do not make nearly enough money to buy 9 or 10 houses a year. I have barely been able to buy three houses a year. I bought my first rental property in December 2010, and I started my rental property purchase goal on that day. I should have had three by December 2011, six by December 2012, and nine by December 2013. I started out very slow buying only one rental in my first year. I have picked up speed and as of March 2016, I own 16 rentals, still behind where I had hoped to be. That does not mean I will not reach my goal. The reason I have not purchased as many rentals lately is they are much harder to find in our market. Our prices have increased significantly making it harder to cash flow. I have been buying many more fix and flips since I cannot find rentals.

Why do I think I can purchase 100 rental properties by January 2023 if I am so far away? After reading and listening to books on how to become wealthy I started reworking my life goals. A couple of ideas are repeated in books and audio tapes beginning with Think and Grow Rich by Napoleon Hill. Think and Grow Rich was published in the early 20th century after Napoleon Hill followed Andrew Carnegie for decades. Carnegie was one of the richest men in the history of the world and wanted someone to study rich people in the world and write a book about how and why they became rich. Because Carnegie was one of the richest people in the world, he was able to grant Hill access to most of the world’s wealthiest people. Think and Grow Rich is now known as one of the first self-help books, and many of its basic ideas are still taught today by the world’s most famous life coaches and teachers.

How will my attitude affect my success?

Being positive is a theme that is repeated in every self-help book and audio recording I have ever listened too. I am a strong believer that our attitude has a huge influence on our success in life. The books range from slightly crazy to extremely scientific reasons for how being positive can greatly affect the success we have in our lives. You may have heard of the law of attraction, which states that the universe will return to us whatever we put out. If we are positive and happy, we will get positive and happy things back. If we are negative and sad, negative and sad things will come our way. I am a very logical and scientific person and was not sold on this idea right away. I had to know why this would happen. How could being positive magically bring positive things into our lives?

I started doing research on the brain and on how the law of attraction theory worked. I found out that it is not all magic, there are scientific reasons why the law of attraction works. It is based on the subconscious part of our brain and on how it operates our bodies. We know that our conscious mind is only a fraction of what our brain is responsible for. Our subconscious mind is constantly working to keep us alive by telling our heart, lungs, muscles and the rest of our bodies what to do. Most of our movements and actions are performed by our subconscious, not our conscious mind. We do not have to think about walking, talking, driving, writing, or even most of our daily tasks. By doing those things repeatedly, we have programmed our minds on how to do them.

Tying this back into the positive thinking idea, if we are always thinking positively, our subconscious will think positively, too. If our subconscious thinks we are happy all the time, it will do what it can to make us happy. Why do we care what our subconscious thinks? It is much smarter than our conscious mind. The subconscious is responsible for handling millions of tasks at once, while our conscious mind can only handle a handful of ideas at once. If we let our subconscious know what we want it will help guide our lives and help us to get what we want. Whether it is love, happiness, money, or material items our subconscious has much more power than we think. The theory also states that you must think about what you want, not what you do not want because our subconscious cannot tell the difference. If you are constantly thinking about not having money, then your subconscious will do its best to make that come true as well. If you are constantly thinking of not getting sick, our subconscious will do its best to get you sick. Think of being healthy, think of being rich, and think of the good things, not the negatives.

Why such a big goal?

Almost every self-help book will tell you goals are extremely important. Without goals, we have no direction, no path, and no idea of what we really want in life. There are varying ideas of how our goals should be constructed. Some say we just need broad wide-open goals such as being as happy as possible all the time to make whatever is best for you to come to you. Others say to be as specific and detailed as possible with your goals, break your goals into smaller goals, and then have a period for when those goals will be accomplished. Eventually, you will have a detailed blueprint for how you will get to where you need to go.

Some people say you need realistic goals and others say you need outrageous goals. As you have probably guessed, I like outrageous goals! The reason I like outrageous goals is that they are challenging! If I know that I can reach a goal and if I know exactly how to reach it, where is the motivation for me to push myself? I want goals that make me think and reach for new ideas and systems. I have no idea what opportunities or challenges will face me in the future, so why should I limit my future goals to what I can do now? I may have a huge increase in income or find a new system that allows me to buy houses cheaper. I have such a lofty goal because I have no idea what could happen.

Who will I need help from?

Many of the self-help books also talk about how we all need friends, co-workers, or acquaintances to help us reach our potential. Some use the term mastermind to describe groups of like-minded people who meet to help each other succeed by offering advice and motivation. The idea is that the more people to brainstorm ideas, questions, problems, etc. the better the chance a great idea or solution to a problem will come about. I do not have a mastermind group (this has since changed), but I have recruited my best friend to work with me and learn the real estate business. He was a top-level manager in the corporate world and left his six-figure salary behind to learn real estate from me. I benefit by having a new mind to bounce ideas off and have more help in the office. He benefits by getting out of the corporate grind and learning how to be truly wealthy. He also has a flexible schedule and he is not stuck behind a desk all day.

Why focus is so important

The self-help teachers also say how important it is to focus on one task or goal. All the greats had something in their mind that they really wanted. They did not let anything stop them until they got what they wanted or died trying. I have always thought of myself as being able to multitask, a jack-of-all-trades type of person. So far, it had worked out well, but I know I can do better. I know there are things I can improve in my business to make it run better and make more money. I have always thought that I knew everything about finding good deals in real estate. After starting this blog, I have realized that there is a whole world I have been missing in direct marketing to off-market properties. Instead of trying to manage five different sources of income myself, I need to delegate less important tasks to my staff and focus on the real moneymakers. If I can focus intently on a couple different areas of my work instead of just skimming over 50, I know I can improve my numbers significantly.

Why visualizing the goal being achieved is important

Many great athletes will tell you how important visualization is to succeed in sports. Great golfers visualize exactly how their shot will look before they hit it. Basketball players repeatedly visualize hitting the game-winning shot. The wealth teachers are all huge supporters of visualization. They say visualization will give your subconscious a clear picture of what you want and then your subconscious will do its best to make it happen. If you want to change your life, start visualizing how it should be every day. Better yet, go see, touch, and smell the things you want. Test-drive the car you always wanted, look at your dream home, or immerse yourself with the things you want and your subconscious will get to work. I wrote a ten-year dream story on exactly how I wanted my life to be. I described a beautiful house and in three months, I bought that house. I was not even planning to move and in no way thought I could afford a house like the one I have now, but it became a reality.

Using all I have learned to reach my goals

Based on the ideas I have just discussed, I think I have a good chance of reaching 100 rental properties. I still do not know exactly how it will happen, but I know it will or I will find a better and more challenging goal. I have to train my subconscious to help me reach my goal. I have to be positive all the time. I have to think about my goals constantly and break it down into manageable pieces. I must have help and I have to focus more intently on my important goals. I also have to visualize myself already achieving my goals and having everything I want. Even if not all of this makes me rich, worst-case scenario, I am a positive, determined, focused person who knows exactly what he wants.

Breaking down big goals makes them more realistic

I have broken down other goals in my life, but I have yet to break down a goal this big! I am going to work through the goal while writing the blog and see where I end up in 9.5 years. I wanted to write this article to help convince myself that it is possible to buy 100 properties. The first part of this article was all about my mindset. Now, let us get down to the numbers. Here is a year-by-year breakdown of how I plan to purchase 100 rental properties.

My 11th rental

Year one

With my current income, I can purchase three rental properties a year and I have purchased that many in the last three years. I should be able to do a cash-out refinance on at least one rental property in 2014 and get enough money to buy another property. I am also counting on my new attitude and work ideas to create enough extra income to purchase one more rental property. I also just acquired a HELOC on my personal residence for $60,000. I think that will allow me to purchase one more rental. New goal for 2014 is to purchase six long-term rentals.

I will have 15 houses with about $9,400 in monthly cash flow. That is $112,800 a year all going toward paying off mortgages on my properties. I will have paid off one house at the beginning of 2014 and will pay off one and a half more in 2014.

Year two

In 2015, with income and savings, I should be able to purchase four properties. I should be able to do another cash-out refinance and buy another rental property as well. I also believe my continuous improvements will allow more increases in income, through either listing or flipping houses. The increased income will allow me to add another rental and HELOC another as well. I am hoping the addition of my friend beginning to work with me will bring in more income from his real estate activities, which will allow another purchase. My goal for 2015 is to purchase nine rentals. 

I will have 24 houses with about $15,200 in monthly cash flow. That is $182,400 a year all going toward paying off mortgages. I will pay off the other half of one property and two more rentals in year two and will have four properties paid off.

Year three

I believe I will increase my income and savings enough to be able to buy five rentals. I will have 24 rentals and I should be able to refinance at least two of those properties. That will allow two more purchases and the HELOC should add the flexibility to add another rental. I am still planning to add to my income every year with increased business. This year I see a big jump in income with my friend being around for his third year and our new marketing and listing techniques taking off. I see three more rental properties being purchased from new income. My goal for 2016 is to purchase 11 rentals.

I will have 35 houses with about with about $22,200 in monthly cash flow. That is $266,400 a year all going to pay off mortgages. I will pay off four and a half more properties for a total of eight and a half properties paid off.

Year four

From my current income, I will be able to buy eight rental properties. I will continue to refinance two properties a year, which will allow at least two more purchases. I am also going to use the HELOC to buy another, and I am still planning to increase my income. I am going to stay conservative and assume enough income to buy one more property this year. My goal for 2017 is to purchase 12 rental properties.

I will have 47 rental properties at this point with about $31,400 in monthly cash flow. That makes $376,800 a year all going to mortgage payoff! I will pay off the half of a mortgage left over from 2016 and five more properties in 2017, making 14 properties paid off.

Year five

From my current income, I will be able to purchase nine rental properties. I will refinance two more properties and use the proceeds to buy two more rentals. I may not have enough money in the HELOC this year so I will not count on that, but I will count on my income increasing enough to purchase one more rental. My goal for 2018 is to purchase 12 rental properties. Note: To buy this many properties I will need about $300,000 in cash for repairs and down payments.  

I will have 59 rental properties with a monthly cash flow of $41,000. That makes $492,000 a year all going to mortgage payoff. I will pay off seven and a half more properties in 2018 making 21.5 properties paid off.

Year six

From my current income, I will be able to purchase ten rental properties. I will refinance two more properties and use those proceeds to buy three more rentals. With inflation and appreciation, I should be able to refinance the properties for more money than in previous years. I will not use increased income to buy another property. If my income increases, I will use it for fun stuff such as vacations or cars! My goal for 2019 is to buy 13 rental properties.

I will have 72 rental properties with a monthly cash flow of $51,600. That is $619,200 going toward mortgage payoff. I will pay off the half mortgage from 2018 and nine more properties in 2019 making 31 properties paid off.

Year seven

From my current income, I will be able to buy ten rental properties. I will refinance two more properties and use that money to buy three more rentals. I will not count on any more raises in income since I do not need it at this point. My goal for 2020 is to purchase 13 rental properties.

I will have 85 rental properties with a monthly cash flow of $63,400. That is $760,800 a year going towards mortgage payoff. I will pay off 11 more properties in 2020 making 42 properties paid off.

Year eight

From my current income, I will be able to buy ten rental properties. I will refinance two more properties again and purchase three more rentals with that money. My goal for 2021 is to purchase 13 rental properties.

I will have 98 rental properties with a monthly cash flow of 75,600. I will have $907,200 a year going towards mortgage payoff. I will pay off 14 more properties in 2021 making 56 houses paid off.

Year nine

I only need to buy two more properties to reach my goal! I made it ahead of schedule and when I started writing this article, I was not sure how I would be able to reach 100 properties by 2023. I do not need to refinance any properties at this point and I can start using my income any way I want or I could retire!

I will have 100 rental properties with a monthly income of $82,400. I will have $988,800 a year going to whatever I want it to go to at this point. I can stop paying down mortgages if I want to or I could keep buying properties if I get bored. I came really close to the figures I estimated before writing this article. Falling just short of one million in income from my rental properties (which was more than I thought) and just shy of 60 properties paid off.

Assumptions in my plan to purchase 100 rental properties

You may be wondering how I came up with my figures. To be honest I used very basic figures to make things easy on myself.

  • I assumed $600 in monthly cash flow per property. I am making between $500 and $700 per property now.
  • I assumed each mortgage that I paid off would increase monthly cash flow by $400.
  • I do not assume any inflation because that would cause the numbers to be much more difficult to figure!
  • I assume my portfolio lender will continue to lend on as many properties as I want. I will have 43 houses financed at one time and then those will start to decrease as I pay them off.
  • I assume I can continue to do cash-out refinances with my portfolio lenders.
  • I assume interest rates will not increase significantly.
  • I assume rental rates will not go up.

Additional benefits of rental properties that my income projections did not account for

Rental properties have great tax advantages, which I discuss here. Every rental property can be depreciated, which will save me thousands in taxes each year. I assume my rental properties will not appreciate, but they have already seen huge appreciation in the last two years, increasing my net worth by $600,000. I assume rents will not increase, but my rents have increased as well over the last couple of years. I rented my first rental property for $1,050 a month in 2011 and it now rents for $1,300 a month. I will most likely be better off than my projections indicate if I can buy 100 rental properties.

Potential roadblocks

These are many assumptions and one or more of them may not work out as I plan. However, other factors may help me do even better than I planned or balance out any roadblocks I run into.

  • New ways to find properties: I am going to start direct marketing to off-market owners. This should allow me to buy properties even further below market, and I may even find a few owners who will finance down payments. I recently realized I could use my IRA to buy properties!
  • Private money: One of my goals is to find new sources of private money that will allow me to finance more repairs and down payments. This would allow me to put less money into properties and buy them faster.
  • New income sources: I have no idea what the future holds as far as opportunities and money. I may find a gold mine that will allow me to buy properties for cash and not have to worry about financing at all!
  • I assume I will not do anything with the houses I pay off free and clear, but if needed to I could easily get a line of credit or refinance one of these houses to bring in enough money to buy a few new properties.

What will I do in 2023 if I reach my goal?

My Lamborghini

I have many things I would love to do if I did not have to work. Here is a list of a few of the things I would love to do with one million dollars a year coming in and no job!

  • Start a pizza restaurant
  • Start a car dealership
  • Travel the world with my family
  • Donate time and money to those less fortunate
  • Play in the World Series of Poker
  • Attend a Super Bowl
  • Play golf all over the world
  • Buy a Lamborghini Diablo (done!)
  • Buy a beach house
  • Help teach others about real estate (doing my best now)

I have a much longer goal list than what is above and I hope to do many of these things before 2023. I know I will have time, money, and the freedom to do these things at that time.

Conclusion

I plan to purchase 100 rental properties by January 2023, but I realize that may not happen. If something better comes along to change my plan, I am ready to embrace fully any new opportunities.

Update on my plan 2014

I have already changed focus slightly in 2014 to fix and flipping over buying long-term rentals. I have done this for two reasons:

  1. There have been more fix and flip opportunities than rental opportunities in my market.
  2. The money from flipping will help me buy more rentals; rentals take a great deal of cash.

It seemed crazy to think I could increase my income enough to buy this many properties when I first made this goal in 2013. However now that it is late 2014, I can easily see myself making more than enough money to buy 100 rental properties and have plenty of money left over to do other fun activities. At some point, I may decide it is better to buy larger multifamily buildings than single-family homes, but for now, I see more opportunity in the single-family market in my area than multifamily.

Update on my plan 2016

The market has gotten even crazier in Colorado. Houses I was buying for $100,000 are now at least $160,000 or more. The rents have not increased nearly as much as house values have increased. It is very hard to find rentals and I have stopped buying them in Colorado. I have started to look at other states including Florida for a new market.

I also stopped paying off my mortgages early. I decided my money was better used to buy as many homes as I could. It has paid off buying 16 rentals in the last five years since our market has gone up so much. I have invested about $300,000 in buying my houses and my equity is close to $1.5 million. I have even decided to sell some of my rentals and re-invest that capital into more properties in another market.

I wrote this goal out in 2013 and updated it in 2014, and it is now 2016. I think goals are vitally important to achieving what you want in life. Will I reach this goal? I do not know. If I don’t reach it, will I be a failure? No! I am already way ahead of where I would have been without this goal. That is the point of goals, to motivate you to go farther than you think you can.

Update on my plan 2018

Right now it is the middle of 2018 and I have not come close to where I should be with my goal. Am I disappointed? No. Many things have happened that are out of my control; good and bad. The biggest challenge I have faced is the housing market in Colorado. Prices have almost tripled since I made this goal. Some of the rentals I bought for less than $100,000 7 years ago are worth close to or more than $300,000 today. I can no longer cash flow on residential rental properties in my market. I have thought about buying rentals in Florida, but in the end, decided to buy commercial properties here. I even bought a 68,000 square foot strip mall this year. I am buying rentals worth a lot of money, but not as many as my plan called for. Sometimes we have to change our plans based on changes in our lives or markets.

I have also focussed more on flips because I can make money with those in my market. I flipped 26 houses last year!

Build a Rental Property Empire

Categories Money

Source: investfourmore.com

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Last Updated on March 29, 2023 by Mark Ferguson

A cash-out refinance is one of the best tools an investor can use to take money out of their rental properties. A refinance is when you replace the current loan on your home with a new loan, and when you complete a cash-out refinance, you get cash back after getting the loan. One of the biggest roadblocks an investor runs into is finding the cash for down payments on new rental properties. A cash-out refinance is a great way to get cash to buy more properties. When I purchased my first long-term rental, I was able to buy the property from proceeds that came from a cash-out refinance on my personal residence. I was able to take out $40,000 in equity from my personal house, only one year after I bought the home. I have also refinanced multiple rental properties, which has allowed to buy more rentals and I now have 16 rental properties total.

How can you take a cash-out refinance?

Most people get loans on their homes when they buy them. At some point, you may want to consider refinancing that loan for a number of reasons:

Interest rates

If interest rates are much lower now than when you got the loan it may make sense to refinance your current loan into a mortgage with a lower interest rate.

Cash-out

There are many cases where you can get cashback after refinancing. A house could go up in value, you could get a different type of loan, you could make repairs, or make an improvement to a house to increase its value.

The video below goes over a refinance I did on one of my rentals.

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How much does a refinance cost?

The downside to refinancing your home is it costs money. You are getting a brand new loan that will cost about as much as the first loan you got on the home. That can be from 2% to 3% of the loan amount. You have to pay for an appraisal, origination fee, processing fees, flood certificate, and some other fees as well. The good news is that you will most likely skip a mortgage payment after the refinance, but don’t think you are getting an amazing deal because of that as the interest is still charged to you, just upfront in those loan costs.

How can houses increase in value?

Values are going up across the country, and that has created an opportunity for homeowners to do a cash-out refinance. Most banks are using stricter guidelines for qualifications and lower loan to value ratios than before the crash. However, if you bought your home at a great price or have owned it for a while, you still may be able to get cash out.

I do not like to depend on prices to go up. I buy all my properties below market value. I try to buy all my properties at least 20% below what they are currently worth. If they need work, I buy them for much less than 20% below market value. The BRRRR method is a great way to refinance properties and get cash back out by getting great deals and repairing them.

How much money can you take out?

Many banks will require an 80% or lower loan to value ratio when refinancing a rental property and they will use an appraisal to determine that value. It is imperative that you have a lot of equity in your property if you want to complete a cash-out refinance with an investment property. If you are refinancing an owner-occupied home, you may be able to refinance up to 95 percent or more of the value of the home. You must live in the house for a year after refinancing in most cases to get an owner-occupied loan.

What are the risks?

A cash-out refinance will increase the amount of the loan you have on your rental property. For some people who are averse to risk, paying off their home is a great option and they may not want more debt. However, I am not averse to risk and I want to maximize my returns. Debt can be a very bad thing if it is used for the wrong things, but if you use debt to buy cash producing investments it can be a great thing!

In my market, I can get a cash on cash return of 15 percent or higher on rental properties, while interest rates are below 5 percent. It makes more sense to me to refinance for 5 percent and use that money to buy properties that will give me over a 15 percent cash on cash return! That 15 percent return does not even include possible appreciation, tax benefits or mortgage pay down.

Yes, it is possible that values could go down and a cash-out refinance would reduce the equity in your home. If you don’t need to sell your home, then it will not matter how much equity you have in your home. However, if you are pushing how much you can afford with a monthly payment it may not be wise to refinance if it increases your payment. If you have a lot of cash flow and are comfortable with a higher payment, use that money to make more money.

If you increase your debt with a refinance, then you may be decreasing the amount you can qualify for on future homes. If you max out the amount of money a lender will loan to you with a refinance, then you won’t be able to get a loan on a new rental property. Before you refinance, make sure you know how much you will be able to qualify for.

How does a refi work on a rental property?

I recently did a cash-out refinance on one of my rental properties and I was able to pull out about $26,000 with my payment only increasing $136 a month. The terms are usually more restrictive and it can be difficult to refinance if you have more than four mortgaged properties. I was able to do a cash-out refinance with more than four mortgages because I used a portfolio lender. They are a local bank and are much more flexible than big banks.

When I did a cash out refinance on my investment property, the max they would lend was 75 percent of the value of the home. I also could only do a 5 or 7 year ARM or a 15 year fixed loan. I chose the 7 year ARM because I plan to pay off my homes quicker than the 7 year fixed term and the rates and payments are lower than the 15-year loan.

On the property, I paid $92,000 and put about $18,000 into it for repairs. I was able to turn it into a 5 bed, 2 bath and rented it for $1,100 (low because it is rented to my brother-in-law). I had to wait a year to do a cash-out refinance and the current value was determined by an appraisal. The appraisal came in at $140,000 which I thought was low, but I had to go with it. After all the lender fees, interest and miscellaneous costs of the cash out refinance, I was able to cash out over $26,000. My payment went up, but I am still able to cash flow every month and I took out more than enough money for a down payment on another rental property.

What about seasoning periods?

One restriction to completing a cash-out refinance is the seasoning period. Most banks, will not complete a cash-out refi right after you buy the home. They will complete a refinance but loan the lower of the appraised value or what you paid for the home in the last year or 6 months. If you bought the home for $100,000 three months ago, and it appraised for $150,000 last week, the bank will still only lend on the $100,000 purchase price if they have a seasoning period longer than three months.

If they will lend 75% of the value, that means they will only lend $75,00 on the home. Some banks have 6 month seasoning periods, some a year, and some will have none. Make sure you know what your bank will do before you make plans.

Is a HELOC better?

A HELOC (home equity line of credit) is much different from a refinance, because you may not have to pay off your current loan. If you have a $100,000 loan on your house, but your home is worth $200,000 you may be able to get an $80,000 line of credit and keep the $100,000 loan in place. When you take out a line of credit you do not have to use the money right away or ever. You can use as much of the money as you want and pay it back when you like. You can borrow the money again after you pay back the line. A refinance is a mortgage where once you pay off the loan or pay extra money into it, you cannot borrow it again.

A HELOC will have closing costs like a cash-out refinance, but many times they will be less. Depending on if you are getting a line on an investment property or a personal residence the terms and fees will differ. The term of the HELOC could be two years, five years or longer, but not 30 years like a refinance could be. The rates on a HELOC are also usually higher and can go up or down as interest rates go up or down.

It may be tough to get a line of credit on a rental as most banks only want to give lines of credit on primary residences.

Do you pay taxes?

One of the best things about a refinance is you do not pay taxes on it. You can buy a house for $100,000, and refinance it for $150,000 a few months later and the money you take out is almost always tax-free. You are not making any money, you are borrowing it so there is no income tax.

Conclusion

The more properties you can buy, the more cash flow builds up and the more wealth you can create. A cash-out refinance can help you purchase more properties and increase your wealth. Make sure the houses you purchase are bought below market value, and it will make a future cash-out refinance much easier. Make sure your payments are not so much that you are no longer seeing positive cash flow every month.

Build a Rental Property Empire

Categories Money

Source: investfourmore.com

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Last Updated on February 2, 2023 by Mark Ferguson

Turn-key rental properties can be a great option for investors looking to get cash flow without a lot of work. They are also a great option for investors who cannot find cash-flowing properties in their state and must invest in a different area. Turn-key rental properties are fully repaired, rented, and managed by a property manager. Buying a turn-key property allows a long-distance investor to buy a property that cash flows with minimal work. I own a lot of local to me real estate, and I have bought a turn-key rental as well out of my area. You must be very careful with the property you buy and the company you use. While turn-key rentals can help investors buy cash-flowing rentals in different markets, it can also be a risky investment.

What is a turn-key rental property?

Some consider a turnkey property to be a house that is remodeled and needs no repairs, but for this article, we are talking about rental properties that are set up to make money right away. I consider turn-key to mean the home needs no repairs and has a tenant and property management in place. Make sure you and whomever you are talking to about turnkey properties have the same definition of turn-key!

There are many companies that will sell turn-key rentals to real estate investors, but be very careful when using these companies. Some are great and some have caused investors huge losses. Make sure you vet whatever company you use.

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What are the advantages of turn-key rental properties?

One of the biggest problems for many investors is finding affordable properties that will make money. Turn-key rentals are often located in areas that have low prices and relatively high rents.

Here are a few advantages to buying turnkey rentals and why I bought a turn-key rental:

  1. Easy to find: You can buy a turn-key property very quickly from turnkey providers who have a stock of turn-key properties available to purchase. Turn-key companies can have a large inventory of turn-keys because the properties are providing cash flow and are making money while the company owns the properties. You do have to know the right turnkey companies to work with.
  2. Less work than a normal rental: Turn-key properties are already rented, managed, and repaired. You do not have to find contractors, property managers, or real estate agents.
  3. Provide cash flow from day one: The first day you buy a turn-key, it will have a tenant in place paying rent. You do not have to worry about how long the repairs will take or how long it will take to get a tenant.
  4. Provide a great return: Most turn-key rentals provide 10 to 15 percent returns. The return begins right away and takes little work to maintain because a property manager takes care of the house for you.
  5. Provide diversification: Buying turn-key rentals in different markets of the country gives you diversification.
  6. Can be bought for cash: Many foreign investors have trouble buying properties because they cannot get financing. Turn-key rentals can be as inexpensive as $30,000, making them easier to buy with cash.
  7. You can invest your retirement savings: You can invest a self-directed IRA or 401k into turn-key rentals.

What are the disadvantages of turn-key properties?

While there are many advantages to buying a turn-key rental property there are disadvantages as well:

  1. Turn-key rentals are usually priced at retail value or even above retail value. I like to get a great deal on my rentals and that is why I have not bought more turn-key rentals.
  2. It can be tough to know where to buy a long-distance rental or keep track of it. You must have a great property manager to make sure the home is maintained and managed right.
  3. Not all turn-key companies are reputable and many take advantage of long-distance buyers because they do not see the property.
  4. There may not be as much cash flow with a turn-key property than if you buy it yourself.

How can you find turn-key rental properties?

There are many turn-key rental property providers throughout the United States. Some companies are specific to local markets such as Memphis, Ohio, Missouri, Florida, Texas, Chicago, and Wisconsin while other companies have properties all over the country. The properties vary in price, rent, financing options, and returns, but a good turn-key property will cash flow. Even with cash flow, I would advise investors to spend time researching the property manager and the area they want to invest in before buying any turnkey property.

A Google search for turnkey rentals will get many results for property managers and houses for sale that are not rented. I have spent a lot of time researching turnkey companies and have met with turnkey companies in person. I have met a lot of turnkey company operators and only met a couple that I trust! Fill out the form below and I will refer a company to you I trust. Your information will not be given to anyone or used for anything except a turn-key rental property company to talk to you about turn-key rentals.

The company I used for my turn-key rental is not one I would recommend and is not selling turn-keys anymore. This is a different company and I have talked to many investors who used them with success.

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Do I invest in long-distance turn-key rental properties?

I had always bought my rental properties in Colorado until 2015. That was when prices became too expensive here to get good rentals. I bought one turn-key property in Ohio that has done okay for me. I have no plans to buy any more turn-key properties because I prefer to find deals on my own in my local market. If I can find the deals I can get a discount which is a huge advantage with real estate. I may buy in other states but I would buy with a real estate agent who is able to search for more houses, but just what the turn-key company owns. A good agent can also find property managers and even contractors. I have a few agents like this across the country in areas with good rent-to-value ratios.

How much do turn-key rental properties cost?

Every turn-key property is different and every location for turn-key properties is different. I have seen turn-key rentals that are repaired, rented, and managed that range from $35,000 to $150,000. I have not seen turn-key properties in higher price ranges because it is much harder to cash flow on a higher-priced rental property than on a lower-priced one. The lower-priced turn-key rental properties usually provide better cash flow and may be a good option for foreign investors who have a hard time getting a loan on properties in the United States.

Can you make money with a turn-key rental property?

I normally do not buy rental properties that are turn-key ready, because they usually cost more. I rarely buy homes that are fixed up, because they usually are not a great deal. Rental property number nine, which I just got under contract, is the closest thing to a fully repaired property that I have purchased (or that I will have purchased). It needed a bit of paint, but that was about it. In a perfect world, I would love for all the rentals I buy to be repaired and rented before I buy them, which is one advantage of turn-key properties.

When I buy my rentals, they usually need work and I get a discount for the money and time I have to put into repairing them. In fact, it is less helpful to buy a home that needs repairs than purchasing a home fixed up, unless you can get a great deal. It is harder to have built-in equity on a turnkey rental, but you do not have to spend time repairing the home, renting it out, or finding a property manager.

When would investing in a long-distance turn-key property be a good idea?

I have had many people reach out to me about investing in rental properties, but they do not know how to start because their market is too expensive. When starter homes are $300,000 or more in an area, it is almost impossible to cash flow on rental property unless you pay cash for it. When you pay cash, your returns are not nearly as good as if you can get a loan (as long as the property cash flows). Rents are almost never high enough on a $300,000 home to cash flow, no matter where you live.

The down payment on a $300,000 property is going to be at least $60,000 unless you use a technique to buy with less money down. Then you have to add closing costs, reserves, repairs, and other costs associated with buying a rental property. I can buy two or three cash-flowing rental properties in my market, where someone in a more expensive area would only be able to buy one that may not cash flow at all. I never invest for appreciation, which is what many people are forced to do in these areas.

If you are in an area with very expensive homes or very low rents compared to home prices, you may want to consider long-distance investing and possibly long-distance, turn-key investing.

Diversification with turn-key rental properties

Many people like to spread out their risk when investing and rental properties are no different. If all of your properties are in one place, it could be riskier if something were to happen to that area. I have all of my rental properties in one place; one reason I like the idea of an out-of-state property is that it would provide diversification.

What is the difference between long-distance investing and long-distance turn-key investing?

Long-distance investing is simply investing in real estate outside of your local market area. You are still in control of the purchase, the renovation, and finding a property manager. This can be a great way to invest if you have a great team that can handle all of these aspects for you or if you are able to travel to handle them yourself. However, it takes a lot of time and work to buy a rental property in another state; you have to control the entire process of finding the property, repairing it, renting it, and finding a property manager.

Why do you need to do due diligence on a turn-key rental property?

Turn-key rental properties are typical houses that have been purchased by a turn-key company, renovated, rented, and have a property manager put in place. An investor still has to perform due diligence when buying a turn-key to ensure the properties are as advertised. The turn-key companies know their clients are out-of-state and they may try to fudge their numbers a bit to make more money on a deal. It does not hurt to have an inspection done on any property you buy even if the turn-key company says the home is completely repaired.

How can an out-of-state investor determine the value of a home

I wrote an article here about how to determine value. Even if a property cash flows great, an investor still does not want to pay much more than market value for a home. It is not easy to determine market value from a long distance, but it is possible. The best way to find out what a home is worth is to get an opinion from a local real estate agent.  You can also use websites like Zillow or Trulia, but I would not count on them to be very accurate.

How can you find a real estate agent to provide a price opinion?

I wrote an article about how to find a great agent here, but many agents will be wary of providing values to an out-of-state investor. My advice is to be perfectly honest with the agent and tell them you are trying to verify if a price on a home is market value. Tell them your situation and see what they say. You should be able to find an agent or two who will give you ballpark values. You may even find an agent who knows of more turn-key properties in the area.

If you want a detailed value you can even order a BPO (broker price opinion) from a real estate agent. Most REO agents perform BPOs for banks on distressed properties. For $75 to $100 you should be able to find an agent who can complete a BPO report. Try looking on usreop.com, nrba.com or reonetwork.com for experienced REO agents. The agent should have their own BPO form they can use that provides three sales, three active comparables and they should know exactly what a BPO is.  If not, find another agent.

How can an out-of-state investor determine fair market rents?

Not only does an investor need to know that they aren’t overpaying for a turn-key property, but they also need to know that the rents are accurate. It is possible a property manager or turn-key company rented a home for more than market rents by charging a premium to an unqualified tenant. You don’t want to buy a turn-key, have the tenant stop paying and then find out the home was rented for more than it should have been.

The best way to determine rents is to call a few property managers in the area. Tell them you are an investor, are buying some homes, and need a property manager. This serves a few purposes; it gives you an idea of market rents, the property manager can let you know if a property will be difficult to rent, and you can interview property management companies in case you need a new one.

You can also check Zillow for rental rates, but again they may not be accurate. You can also look at Craigslist, the classifieds, or check out this article for more tips on determining rental rates.

How to determine if your property management company is good on a turn-key property

The most important piece of a long-distance rental property is the property manager. A bad property manager can cause thousands of dollars in losses through lost rent or damaged property. This article on how to find a great property manager can help you determine if the property manager the turn-key uses or referred you to is any good. Make sure you ask the property management company what kind of screening process they use to check tenants; background checks, credit checks, references, income, and job verification. It is best to let the company tell you what they do and not suggest these screening processes to them.

In some cases, it may be difficult to contact the property management companies. A lot of turn-key companies sell hundreds of properties a year and the property managers do not have time to talk to hundreds or even thousands of prospective buyers.

What can you do if the rents, values, or property management is off on a turn-key?

The first thing you want to do is make sure you discover any issues before you buy a turn-key property! It will be difficult to get any recourse after the fact, although some turn-keys offer rent guarantees and buyback programs.

If you discover a problem before you buy a property, talk to the turn-key. Tell them what the issues are and see what they offer. The more facts and information you can back up your numbers with the better. You may be able to negotiate a better price or have them help you find a new property manager.

This is a great time to see how customer service-oriented the turn-key company is as well. Will they work with you and try to come up with a solution or become defensive? If they won’t try to help at all, then you have a great idea of how good they will be to work with after you buy a property and there is a problem.

Are turn-key rental properties a good option for foreign investors?

Foreign investors can buy homes in the United States, but it is hard for many of them to get financing. Traveling to the U.S., researching markets, finding real estate agents, closing on properties, and then repairing and renting properties is very difficult when you live in another country. Turn-key rental properties make it much easier for foreign or any long-distance investor to invest in rental properties. If you buy a turnkey rental property, you might not make as much money as if you did all the work yourself, but the time and money saved may be worth the cost.

Are turn-key rental properties a good option for self-directed IRAs?

You can invest money from a self-directed IRA into real estate. When you use an IRA to buy real estate, the IRA is buying the property and all income and expenses must go through the IRA. Some turn-key rental properties specialize in self-directed IRA investing and can help investors invest from their IRA into rental properties.

Can you buy turn-key rental properties with less than 20 percent down?

Some turn-key rental property providers offer seller financing that can be used to buy turnkey proprieties for less than 20 percent down. The trade-off with putting less money down is a higher interest rate and loan costs. Rates may be as high as 9 or 10 percent on seller-financed turn-key properties.

Conclusion

Turn-key rental properties are a great way to invest for cash flow when cash flow is hard to find in your market. Turn-key rental properties are also a way to invest in rental properties without having to repair or rent out the house or having to find a property manager. However, it is hard to get a great deal on turnkey rentals because turn-key providers want compensation for all the work they do.

How can you get more detailed information on specific turn-key properties?

If you would like a custom report on turn-key rental properties and more information on turn-key rental property companies, please fill out the form below. Your contact information will not be given to anyone, except a turn-key rental property company.

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Build a Rental Property Empire

Categories Rental Properties

Source: investfourmore.com

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If you’re a little light on down payment funds, a company called FirstREX (now known as “Unison Home Ownership Investors”) might be able to help you out, for a cost.

Put simply, their “REX HomeBuyer” product (now called the “Unison HomeBuyer program”) will give you up to 50% of the down payment you make on a home in return for an “equity investment” on your property.

Unison Wants Shared Equity in Exchange for Down Payment Funds

  • If you’re unable to come up with a 20% down payment
  • Unison HomeBuyer can help you out in exchange for future home price appreciation
  • And they don’t require any monthly payments for their investment
  • This can reduce your mortgage payment and help you avoid PMI

For example, if you’d like to purchase a home for $500,000 and want to put down 20% to avoid mortgage insurance and obtain a more desirable interest rate, but only have 10% available, they’ll give you the other 10%.

So you’ll only need $50,000 in down payment funds and they’ll provide the additional $50,000, pushing the loan amount down to $400,000 at 80% LTV.

When it comes time to sell your property, Unison will get a share of the change in value. If the home sells for $550,000 in the future, their stake would increase to $67,500. That’s a profit of $17,500 for Unison based on a 65/35 split in your favor.

For a 25% down payment, the company typically takes 43.75% of the change in value.

Additionally, Unison gets a transaction fee at the time of purchase, though they don’t collect any monthly payments on the down payment or charge any interest. They are also strictly co-investors in your property, not co-owners with any occupancy rights.

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Unison HomeBuyer Benefits

  • Aside from allowing you to buy more house
  • You can enjoy a lower monthly housing payment
  • Keep more cash on hand for your own needs and expenses
  • And potentially make your offer stronger in a competitive housing market

The company lists a number of benefits to using their product, with the most prominent being the ability to purchase “just a little more house.”

They make the argument that you can get a more expensive home now while mortgage rates are still low, even if you haven’t saved up the necessary amount.

Or if you have the money saved, but simply don’t want to put all your eggs in one basket, you can use Unison HomeBuyer and keep the other half of your down payment funds in a different place, either in cash or some other investment like stocks, bonds, etc.

Double the down payment will also help you avoid private mortgage insurance because the maximum LTV is 80% with this product, so you can save three-fold on the monthly payment via a lower interest rate, no PMI, and a smaller loan amount.

Lastly, you may need some cash reserves to qualify for a mortgage and if they aren’t being used for the down payment, it could help with getting approved for a loan.

Unison HomeBuyer Guidelines

  • They’ll boost your down payment to bring the LTV down to 80%
  • So if you can put down 10% they’ll bring in another 10%
  • If you can only muster 5% they might be able to bring in 15%
  • Then they get a percentage share of the sales proceeds plus their original investment back

Unison will provide up to half of the required down payment, and as mentioned, the max LTV ratio is 80%. That means the minimum down payment is 20%, and Unison will provide up to 10% of the purchase price. You have to provide the other 10%.

If you wish you put down 25% on a home purchase, they’d provide 12.5%, and so on.

There is no minimum or maximum home purchase price, but the maximum amount Unison will provide is $500,000.

The property in question must be a single-family (some condos are permitted), and owner-occupied, though the company may consider some second homes under limited circumstances.

No rental properties are allowed and the subject property must be “typical” for the neighborhood. In other words, they don’t want anything unique or funky that could put their investment at risk.

Speaking of risk, they require a minimum FICO score of 680 from the primary wage earner (with some exceptions), and will typically approve you based on income as long as the corresponding lender does.

The Unison HomeBuyer down payment is meant to close concurrently with the home purchase, with the down payment provided directly to the escrow company at closing.

When it comes time to sell, they get their piece of the appreciation. There is a 30-year maximum term, so if you happen to still be in the home, you’ll need to pay the company out based on the value of your home at that time.

You can also buy out the homeownership investment in as early as three years by obtaining a third-party appraisal to assign a market value.

It’s important to note that if you happen to sell within three years of obtaining the down payment, “special provisions apply” that improve the company’s investment outcome. In other words, I think they charge you a higher rate of return.

Does Unison HomeBuyer Make Sense for You?

  • The product is meant to extend your purchasing power
  • But in doing so you will miss out on a potentially large amount of appreciation
  • So you might want to consider buying a little less house
  • Or exploring alternatives such as a low-down payment mortgage or gift funds from a relative instead

As noted, their investment return is higher if you don’t stay in the home for at least three years, so the product doesn’t make sense unless you plan on sticking around awhile.

Additionally, I believe the property needs to remain owner-occupied while their investment is in place, so that could be a limiting factor as well.

The transaction fee is something to consider – it is equal to 2% of the funding they provide in conjunction with a non-agency loan or 3% for an agency loan (it has since been lowered to 2.5%).

You also obviously forego some of your home price appreciation if and when you sell for a profit, though the upside is that you’re risking less of your own money. How much you forego depends on the size of the down payment.

If you wish to refinance your mortgage, you can do so at any time by subordinating the Unison HomeBuyer Agreement to your new mortgage but you must pay a small processing fee of $300 (they have eliminated the processing fee).

One bright spot is that if you remodel your home while their down payment is in place, you can get full credit for the renovation value so Unison doesn’t benefit from it too.

And if you can get your LTV down to 80% from 90%, you can ditch the PMI and the higher pricing adjustments associated with a higher LTV. That means a lower mortgage rate. A smaller loan amount also means the monthly payment will be less.

As with anything else, do the math to compare costs and benefits of both routes to determine if Unison HomeBuyer makes sense for you. Just be careful not to buy too much house just because you can.

Read more: Do you need down payment protection?

Source: thetruthaboutmortgage.com