Thanks for sharing Todd.... And Carl!!
Real estate should be a part of everyones plans if they can swing it -- or have the stomach for property management. It's certainly a smart strategy for a real estate professional like Todd.
I don't want the potential hassles of the actual management - so choose to invest in LLC's with professional management. There are also real estate ETF's (exchange traded funds i.e., stocks) where an individual can invest - collect a dividend - and have the possible upside appreciation. Just google Real Estate ETF's and you should get all manor of hits for this type of investment.
The property I carry the mortgage on in Oregon --- has yet to find a tenant -- and this month marks the one year anniversary... EMPTY. So it's not all roses and perfection. When my brother in law bought the property -- I asked him point blank - "can you afford the mortgage with NO TENANT" for a year or more?" The answer was "EASY". While it's not my problem - I just collect the payments - I'd prefer to see the investment for Jay go the way it was "planned". Eventually he will get a tenant and things will be fine. Commercial buildings/tenants are a LOT different than "renters" in a house. He's had offers -- but the tenant improvements are baked in the offer and a couple have been over 100K before the tenant will move in. He's not interested in putting out that kind of cash up front but has taken a serious look at the proposals.
I tried for over a year - to buy a commercial building that I could lease out a portion -- and keep 2500 square feet for my own use. The numbers just don't work and the vacancy rates for light industrial are quite high and the prices have NOT come down in order to make them work. Any investment like this must have full consideration of the NEGATIVE CASH FLOW that can be a part of these purchases. They're not like stocks -- if things don't go the way you planned - they can be "white elephants" and you must be able to carry the costs out of pocket. If you're smart - and a little bit lucky - you can get a rental with a great tenant that stays for years... and if you're really lucky the value can double or triple -- all while paying a nice tax benefit (if the idiots in Washington DC don't ruin that).
