Quote:
Originally Posted by BimmerDimmer6
Highly unlikely you'd lose every tenant at the same time, but even if you did you should have enough cash to cover the mortgages for YEARS as you didn't pay for them in cash. You're "leveraging" your risk in that regard.
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"Years" sounds extreme but agree that emergency cash is a requirement and that uninvested cash drag is part of the "cost" of rentals.
Quote:
Originally Posted by BimmerDimmer6
I'm surprised you guys are so against leveraging, I get most of you guys have typical jobs and view your house as a place you live, but I just see them as boxes that pay me every month and appreciate over time.
I should also add I bought most of these units during the downturn from 08 - 2013 when the numbers made a lot more sense. I wouldn't touch anything with a ten foot pole right now as far as rentals go.
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Yes, it doesn't really make sense without the benefit of leverage. Although it seems like buying at normal prices (not 08-13 discounts) and getting "normal" 3%-5% appreciation is still enough to earn a pretty good premium over normal stock investments, no? Different story if you're thinking everything is so expensive right now they will
depreciate.
So, BimmerDimmer, if you literally had that $500k, would you buy one ~$2M multifamily unit ($400k down at 20%, $100k leftover for reserves) or would you "diversify" and buy, say, 5 different units for a total of ~$2M?