Because they come with photos, investment profiles, and a management team in place, prospective investors do not necessarily need to see the properties in person when buying. | VIDEO
Making Money with FIRE
As Los Angeles gets more and more expensive, growing interest in the idea of passive income stokes the embers, growing the popularity of the financial philosophy of FIRE — Financial Independence Retire Early. Awareness and demand for the FIRE method of wealth creation is also fed by growing skepticism of investment markets and, dwindling faith in the long-term reliability of social security.
Thanks to technology and turn-key income properties with managers and tenants in place, it’s getting less and less necessary for landlords to live in the same locations as their properties.
Smaller markets allow for greater monthly income for property owners. Investors have been finding the low price and high rents in growing neighborhoods just outside of depressed cities near Detroit, Chicago and Tulsa.
Many FIRE investors travel extensively, and thus need an investment property that does not required them to be there in person. Cinematographer filmmaker Justin Wells shares one such story:
We started by looking at lofts in Los Angeles and I wasn’t quite sure yet how I wanted to invest. We looked at various lofts in Atwater Village, South Pasadena and downtown. At the end of the day, I decided that the prices for me at this time are too high in Los Angeles, so Corey introduced me to his friend, Alan, who helps people get investment properties all over the country that are connected to excellent property management companies, and have a relatively low price to buy and a high demand for rent. After some conversations with Alan and looking at a few spreadsheets he’d prepared about various properties around the country, I decided to take a look at some of them for myself.
On a cold morning in Detroit, I met Alan for breakfast and we headed out the suburbs of Detroit to look at some properties. They were all solid investments, all under $100,000 to buy, with rents up to 900 per month, providing instant positive cash flow. We also met a representative from the property management company and he quickly put my mind at ease, running through their process for things like repairs, autopay, and filling vacancies. He said the only time they generally have trouble with tenants is when the owner gets too involved. All the tenants seemed happy and hard-working, mostly young families. Wanting to be as hands off in that department as possible (due to distance and work schedule), I was happy to hear that they are proactive in that department. They also stay on top of repairs. Alan advised me to just go ahead and approve repairs right away. There’s no sense in trying to skimp or haggle with that sort of stuff. In the long run, its better to be proactive with repairs, keep the property looking good and up to date, and the tenants happy.
After I returned home, I considered my options and settled on a nice, sturdy three bedroom on a quiet suburban street in Roseville, MI. Alan was able to help me find a lender and facilitate the sale. By the time the property was in escrow, the place was rented to a family whom I’m told love the place and have a newborn baby, for more than I had been anticipating in my calculations. The property is already more profitable than I expected. I couldn’t be happier with how the whole experience has gone. — Justin Wells
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