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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: yddeyma on July 28, 2016, 07:08:42 PM

Title: How to Grow the Business?
Post by: yddeyma on July 28, 2016, 07:08:42 PM
Hey guys, looking for opinions on how to accelerate my wealth accumulation so I can retire in 5 years.  I currently own 5 houses in an LLC.  I know you folks want to analyze numbers, but instead for this post I just want to focus on a more top level business strategy.  Seriously, just throw out ideas, I'm open to anything. 

Option One:  I owe on the rentals, but its a business loan and is scheduled to be paid off in 5 years.  My issue is that I only own 66% of the business and I hate debt.  I want to own fewer rentals outright because that's less work for me since I do all my own property management.  But realistically, I could restructure the debt into a 20 year commercial mortgage, buy a bunch more houses (I'd need about 25 going this route), and retire off the income.  I'm just not sure I can continue to work my 9-5 while buying more and more rentals.  I'm in a rural area and have not gotten any good rec's for property management companies either.

Option Two: If I try flipping, I can ditch my business partner and keep 100% of the profit.  I am not sure if this will work in my area, but its worth a shot.  I think I can flip 2 houses a year and hit my savings goal.  If I do it within the business, I'd need to do at least 3, maybe 4.  The idea would be I'd hit my lump savings goal and then be able to retire and live off the other 5 rentals since their debt would be paid off at that point.  This is a big risk.  I've never flipped a house.  I live in a rural area with low home prices (you can get a good rental for $60k), so profit margins for flipping are a lot smaller.

Option Three: Get another job.  Honestly I'm throwing this out here just to network a bit.  I had my dream consulting job as an instructional designer for engineering curriculum, awesome pay and I had a ton of fun....but it was consulting work and the contract dried up and I can't find anything similar.  I'd need to be able to telework flexible hours since I have small kids.  I'm not willing to pick-up a 2nd job I hate, but if the pay's good and its moderately interesting I'd give it go.  I've got a Master's in Mechanical Engineering but suck at CAD.  Ideas?

Option Four: House hacking.  I think this is an awesome idea but my spouse veto-ed it.  I didn't argue too much, because he gave up a lot without complaining when I started slashing our spending.  Happy medium and all that mumbo jumbo.

Any tips on how you'd grow your real estate business?
Title: Re: How to Grow the Business?
Post by: Blindsquirrel on July 29, 2016, 07:10:11 PM
   Hire someone to do the work and use flips to fund acquisitions.
Title: Re: How to Grow the Business?
Post by: waltworks on July 29, 2016, 09:18:07 PM
All of your ideas sound like long term jobs. I'd cash out and find some actual passive investments, or try harder to find a management company.

Title: Re: How to Grow the Business?
Post by: yddeyma on July 30, 2016, 11:27:33 AM
Such as.......
Title: Re: How to Grow the Business?
Post by: waltworks on July 30, 2016, 11:43:05 AM
Such as.......

Stocks, bonds, REITs, rentals you don't have to spend tons of time managing, gold bars and beanie babies, whatever.

Title: Re: How to Grow the Business?
Post by: yddeyma on July 30, 2016, 11:49:32 AM
Sounds really boring.  I really like fixing things, so the work part does not bother me.  It's the dealing with people part that can get old....I have a people limit. 

I'll think about it.  I get about 12% return with the rentals.  I'm not sure I can pick stocks good enough to beat that and my S&P500 index definitely does not consistently beat that.  I was thinking about trying out Betterment, maybe that would work.
Title: Re: How to Grow the Business?
Post by: Landlady on August 02, 2016, 12:57:07 PM
Another creative option would be to purchase a rental building in your nearest city so you can hopefully see appreciation in value and rents faster than in the country. The smaller the square footage, the better your return will be per square foot. You'll also find property management companies in cities a lot easier.
Yet another idea is to make one of your rural properties into a vacation home and reap the $$ from airbnb and vrbo... This all depends on if your location is awesome though.
Betterment is good, but I don't see it as game changing if you cash out of your business. It sounds like you have a good thing going already with the 12% return.