Comments on: How to Make $5 Million From Your Rental http://truthfullending.com/invest-in-real-estate-get-rich-off-your-rental-property/ Mortgage, Equity And Refinance Help From An Industry Insider Sat, 04 Sep 2010 05:43:30 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Chaz Hernandez http://truthfullending.com/invest-in-real-estate-get-rich-off-your-rental-property/comment-page-1/#comment-1352 Chaz Hernandez Sat, 14 Feb 2009 20:29:57 +0000 http://truthfullending.com/2007/04/13/invest-in-real-estate-get-rich-off-your-rental-property/#comment-1352 Hi John, What investing are you recommending in this down market of real estate? Thank you. Hi John,
What investing are you recommending in this down market of real estate? Thank you.

]]> By: Tony Nguyen http://truthfullending.com/invest-in-real-estate-get-rich-off-your-rental-property/comment-page-1/#comment-145 Tony Nguyen Wed, 09 May 2007 23:40:09 +0000 http://truthfullending.com/2007/04/13/invest-in-real-estate-get-rich-off-your-rental-property/#comment-145 Although all these sound okay and make sense, it's not practical for everybody. If I keep making $120,000/year, I will never be able to make the mortgage for the millions dollars house if the tenant move out and I can't find another person to lease the house. The property management will not guarantee the house to be lease at all time. I have to be making million dollars/year to afford to do this without the risk of fore-closure. My question to you is are you doing it and how is it working out if you are? Although all these sound okay and make sense, it’s not practical for everybody. If I keep making $120,000/year, I will never be able to make the mortgage for the millions dollars house if the tenant move out and I can’t find another person to lease the house. The property management will not guarantee the house to be lease at all time. I have to be making million dollars/year to afford to do this without the risk of fore-closure. My question to you is are you doing it and how is it working out if you are?

]]> By: John http://truthfullending.com/invest-in-real-estate-get-rich-off-your-rental-property/comment-page-1/#comment-147 John Wed, 09 May 2007 23:20:27 +0000 http://truthfullending.com/2007/04/13/invest-in-real-estate-get-rich-off-your-rental-property/#comment-147 That's a good point. When I first wrote this article it was about 3 times the size and then I realized that no one's going to read the whole thing at that length, and if they do, it's just too much math for one sitting - at least for me it was. Anyway, in regard to your comment...you're right that the mortgage payments are going to be very high on, say, a $5 million property (in the realm of $27,000/month!) The fact that the property won't be occupied at all times should be factored into the yearly expected income before you buy the property (as an example, for documentation of income, lenders usually use a 75% occupancy rate). This is a pretty simplified example, but ultimately, if you're smart about shopping, the larger the property, the more income you should make off of it (I'm assuming you're buying larger buildings with more units and not enormous single-family houses). I recommend you take small steps. Try to find the most profitable investment property you can and take it one property at a time. If you keep upgrading and get to a point where you don't think your income will offset the occupancy rate, then stick with what you've got...you may not make it all the way to $5 million, but you'll be better off than if you sit on a property for 30 years. Finally, no, I don't do this personally. I have clients that I help get into this type of investment plan and they're finding it more profitable than just sitting on a single-family house. The purpose of the article is really to illustrate what's possible by thinking about real estate a little bit differently. Hope this helps. John That’s a good point. When I first wrote this article it was about 3 times the size and then I realized that no one’s going to read the whole thing at that length, and if they do, it’s just too much math for one sitting – at least for me it was.

Anyway, in regard to your comment…you’re right that the mortgage payments are going to be very high on, say, a $5 million property (in the realm of $27,000/month!) The fact that the property won’t be occupied at all times should be factored into the yearly expected income before you buy the property (as an example, for documentation of income, lenders usually use a 75% occupancy rate).

This is a pretty simplified example, but ultimately, if you’re smart about shopping, the larger the property, the more income you should make off of it (I’m assuming you’re buying larger buildings with more units and not enormous single-family houses).

I recommend you take small steps. Try to find the most profitable investment property you can and take it one property at a time. If you keep upgrading and get to a point where you don’t think your income will offset the occupancy rate, then stick with what you’ve got…you may not make it all the way to $5 million, but you’ll be better off than if you sit on a property for 30 years.

Finally, no, I don’t do this personally. I have clients that I help get into this type of investment plan and they’re finding it more profitable than just sitting on a single-family house. The purpose of the article is really to illustrate what’s possible by thinking about real estate a little bit differently.

Hope this helps.
John

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