Hi,
New to the forum. Long time reader of the blog.
MMM made a post awhile back that I can't seem to find. It was about being a landlord/rental real estate and quoted a forum post from here from a guy who was an expert on the subject. Where is that guy? Or any other real estate experts?
I have a $50k a year office job, but recently I have spent every waking non-working moment doing internet marketing and have seen some success. My best day was $6k profit...I probably average $1000 a day profit when you factor in the testing of new campaigns and the down days. That may be increasing to a consisten 3-4k soon but I don't want to get ahead of myself...I already did that on my 6k day, projecting that I could buy a new house every week or so.
My first priority in life right now is to use this money to purchase residential real estate to rent out. I live in Indiana, so I am blessed with a market where rents are reasonably high but real estate prices are insanely low. For instance, I can rent my house (purchased for $120k) for $1600/mo. I can rent a $70-80k house for $1000/mo. My goal is to reach 40-50k in GROSS passive income from real estate, at which point I plan to get the hell out of this otherwise miserable state.
My marketing income cannot be considered for mortgages right now, so we're using my job job DTI. This allows me about $100k more of mortgage debt using a max DTI of 45%, after factoring in property taxes and insurance. Since the minimum mortgage amount seems to be $50k, I plan to finance two properties with $50k mortgages and downpayments for the balance, and then buy the rest cash. I should only need to purchase 2 properties cash (in addition to the 2 that are financed and the home I currently live in) to achieve my goal.
I am using a property management company since I plan on moving thousands of miles away or even out of the country. They take the first month's rent plus 10% of the rest and handle everything so my income is truly passive.
Can anyone walk me through the best way to do this and get the most efficient bang for my buck so as to get out of here quickly? Should I buy "turn key" properties that need absolutely no work but are more expensive, or buy dirt cheap ones that need work? If so, what "work needed" should I absolutey avoid at all costs? What is considered a good ROI, as in, based on an expected rental rate, how much should I pay for the house/pay monthly?
Any guidance from you old vets would be great!
Thanks