If the alternative is your landlord selling the property, with you possibly then getting kicked out or having your rent dramatically increased when the lease expires and the new landlord isn't so nice, it's not a bad tradr-off.
I love the way you tell your stories. Thanks for being vulnerable and sharing your personal experiences and wisdom. I went to the store and bought groceries instead of going out for lunch after watching one of your videos. I have started my debt snowball journey but I admit I could be doing better.
Wow! Not a disaster! Keep that tenent there. Disaster is when the my renters caused a fire because they were frying with oil. Kitchen and one room with wall gone. Whole house smoke damage .... all drywall in my house got removed. You don't want to risk bad renters ... you are doing just fine. Disaster is when your renters won't leave, they are disrupting neighbors, and abusing your place so bad that you need to renovate when they move.
Sounds like you are about to make your second biggest mistake. Pricing out what sounds like a great tenant. Agreed to raise their rent mid lease?? That’s crazy. I’d keep them there as long as I could and just try to do better on your next one.
1 of my first 10,000 subscribers will win $1,000, and 5 will each win $100. You will be randomly selected and announced within the first week of hitting 10,000 subscribers!
Never let FOMO take hold in a business transaction. Never ever buy investment properties within an HOA, you can't control those costs. If you only own one, two...maybe less than 12 properties, why give up 10% on property management? Don't do it, do it yourself. All they do is collect rent, contracts....the easy stuff and when the property does need maintenance, they aren't out shopping the market for 'discounted' contractors to do the work. Me: owner of 14 rental for over 20 years.
I was thinking this. Would love to get my hands on a few rental properties but was never quite in the right place to kick it off. Now I have kids and I’d rather spend my time with them. It also doesn’t help I have a good salary at a big corporate but if I had been a little more aggressive with my savings in my early 20s I probably could have had 2-3 houses by now. Owell, all you can do is try to help the kids do better.
Great info! Transparency and breaking the numbers down helps me understand the real estate game better. Definitely gotta watch out for slimy HOA fees hidden as condo association fees, I would of never figured
Probably more realistic in Peoria- it’s a s***hole where no one wants to live, so you won’t get much appreciation and few investors want to own property there. Plus lower income housing typically has higher CAP Rates.
I hate the term Market Rent. I think it is scum. Raising your rent because others did it. That's the reason why rent is going up, not because of higher cost, but greed. Because someone wants to squeeze their tenant harder. Not because the taxes are higher or repairs are higher. Raising rent because you want to get richer for no reason is despicable
And the rent goes up because there's a lack of supply. If you want lower rent, then make sure you write to your local politician to make it easier to build homes.
Great video, I think the only change is advise was just putting a small list in the opposite corner when you are going through your preferred list! It’ll make it a little easier to remember the list later!
Thanks a lot for breaking it down with numbers! Am almost ready for a down payment for a rental but will not be pressured or look for anything with condo fees after watching this video. Outrageous they can just raise that at will. But sounds like in a few years this will all be worth it for you after hitting 12%. Thanks!
Yeah... I'd been considering getting into real estate in the past, but after running the numbers and taking into account the added stress and work of maintaining a property, it just wasn't worth it for me. I'm good being lazy, renting and investing in growth funds for the foreseeable future...
My mans has just passed his one year of youtube and with this being the first upload to the channel. Youre killing it Caleb!! Good job, just 490k Subs and literally gonna hit 500k by the end of the week. Keep it up, doing amazing work and helping those in need!
Caleb, I love your content. You look a lot healthier today even than you did in this video. Keep up the awesome work! You really hit a nerve with your channel.
Wow, the mortgage to rent ratio certainly seems to favor the owner in the US. In here, there is no chance to have a 30yr mortgage payment lower than a rent after putting 25% down. Is there some site or a study with a good comparison, country by country? I haven't found anything.
Why would someone voluntarily agree to pay 25 more a month than their lease required? Also you use a property management company so how could they even know about the concerns you had in selling the property unless you intervened and are not even using the property management company for their intended role? Rather you or the property management company implied you were considering selling the property in search of more money beyond agreed to could possibly open you up to a lawsuit. Unless the lease is one way and lets you throw out the tennant at any time within the lease period which would be pretty rare otherwise rather sold or not the lease remains in effect.
I’ve been recently watching your videos, and some of the interviews/collaborations you have has me here watching from your first upload and working my way up.
this sounds like a great success. 90k for a condo? Ive been looking around my area hard pressed to find anything under 300k. 130 a month plus equity, get 10, 20 more and you'll be set in a decade with a nice portfolio you can sell or eventually reap the full rent once the mortgage is paid off.
You came down with a case of FOMO. Even if you don’t hit that 12% at least you can look at it as diversifying your portfolio. An actual physical asset that you can sell at any time or, God forbid, you or a family member can downsize into in case of financial disaster.
Having a positive cashflow at all is such a foreign concept to me. In my country your biggest hope is getting tax breaks but the property is almost ALWAYS cash flow negative
Please be kind... I’m trying to replicate your numbers @6:28 but I’m lost. $297/mo is not 3% of $87,500 or $90,000. And $989 is not 10% of $850 (granted, maybe the management fee is not exactly 10%). Help me out?
I would not call this a disaster at all. The benigning was not terrible and you have a clear plan moving forward that will get you to the 12% COC. If it were me I'd call this a success honestly.
Dude. I'm so sorry. Being in the business myself, you can't make the deal better with more money in the deal. That's the same as increasing your bets at the betting table.
$297/year for repairs? That’s cute 😂. My wife and I own 8 units in Chicago so yea, that’s way too low lol. But congrats on getting started!! Excited to see you keep growing your empire 🎉
Those are insane rates you have in the USA, on a 87,500 property rental being 850 that's aprox 10 years gross income to pay the propery. Here in Slovenia having a rental you can be lucky to get 17-20 years, or aprox 7% gross APR. I paid slightly more for my rental property and the market rent is almost half of what you get :) So I am basically only counting on long-term equity and paying down the mortgage, there is practically no cashflow income, it's a break even at best.
@@andrewelkins9728 He bought the property and pays the mortgage for it every month. You should save that energy for the multi billionaire corporate buying entire neighborhoods
Is there any way you can write up a rental agreement to include the property association fees? For example, say rent is $700/month + ($2400/12) for association fees, so if the fees increase, the rent automatically increases?
Thanks for sharing! If this is your definition of a failure, then you will do just fine. Trust me. I'm just a little bit older than you and this really isn't that big of a deal.
Yeeah, condo fees sucked. My first place i owned was a condo so I was new to the concept of HOA fees. The monthly HOA fees were already steep going in but i was freaked out when an emergency HOA fee (double) was added onto it for a couple years. I was locked in and I was terrified I couldn't afford it. I turned out fine in the end but it was quite anxiety inducing.... the HOA fees combined w/ my mortgage felt like i was just paying rent. Condos are cool for the lifestyle but they don't feel that financially lucrative.
Not going to give you an answer as I am no way qualified to. The decision you make is going to depend on your risk tolerance. Generally, the one you buy via cash is going to have no way of going insolvent and you'd have no mortgage so the individual return would be higher. If you were to buy 5 rentals at 20% down, you'd definitely be able to cash flow more but there is more risk, say if you can't fill a residence or you have to renovate one due to bad tenants just because you'll have 5 mortgage payments to worry about.
I will never be a landlord. The closest would be to own and lease out a parking lot. At present. the cards are stacked against landlords. Costs of money and insurance, condo fees and possibly real esate taxes will all be going up, while landlords are evil when they raise rents. I would never own out of stsw residential real estate. I want more control. When thinks break, who chooses the reapir contracto?. The management company. Not for me I always include closing costs in any realestae deal. So you had no instant equity. When you buy a condo you must review the association's financials. Are the reserving enough for major repairs, or will there be assessments? I can earn all the qualified dividends and long term capital gains I want w/o any income tax. That seems a lot easier.
When rent is reasonable and income is reasonable then no one cares when you raise rent, but landlords are raising rents because they owe a mortgage on a property that they're leasing out, and most of them don't have a 9 to 5 and they're trying to get rich off of hard workers and you don't have to raise rents, everyone raises rents because everyone else is doing it, not because you have higher costs. And landlords think that they get no sweat top tier profit, when you look at people as a paycheck. I tell most landlords to get a job and stop getting rich off of me.
I had decided to come back and binge all of your uploads starting from the beginning. Super annoying to find the amazing channel 6 months late but grateful for all the vids🥲
I just wanted to see how it started
Imagine offering to pay more rent because you're landlord is not making enough money
If the alternative is your landlord selling the property, with you possibly then getting kicked out or having your rent dramatically increased when the lease expires and the new landlord isn't so nice, it's not a bad tradr-off.
@@nikolaibreckenridge2287 but he's going to dramatically increase the rent when the lease expires anyway
@trent You don't know that
@@nickhamel2021 he did say that in the video
@@nikolaibreckenridge2287 Sounds like extortion
I love the way you tell your stories. Thanks for being vulnerable and sharing your personal experiences and wisdom. I went to the store and bought groceries instead of going out for lunch after watching one of your videos. I have started my debt snowball journey but I admit I could be doing better.
Wow! Not a disaster! Keep that tenent there. Disaster is when the my renters caused a fire because they were frying with oil. Kitchen and one room with wall gone. Whole house smoke damage .... all drywall in my house got removed. You don't want to risk bad renters ... you are doing just fine. Disaster is when your renters won't leave, they are disrupting neighbors, and abusing your place so bad that you need to renovate when they move.
She actually just decided not to re-sign, so in a couple months we'll have to find a new tenant :/ But that sounds CRAZY!! I'm sorry that happened
After coming across your channel and binge watching them, I'M GOING BACK YOU THE BEGINNING! 😁😁😁
Sounds like you are about to make your second biggest mistake. Pricing out what sounds like a great tenant. Agreed to raise their rent mid lease?? That’s crazy. I’d keep them there as long as I could and just try to do better on your next one.
1 of my first 10,000 subscribers will win $1,000, and 5 will each win $100. You will be randomly selected and announced within the first week of hitting 10,000 subscribers!
Awesome video. The one thing I appreciate from all my financial mentors is transparency and honesty. Thanks for sharing and I hope you keep posting!
Thank you :) I try to be as open as possible!
Never let FOMO take hold in a business transaction. Never ever buy investment properties within an HOA, you can't control those costs. If you only own one, two...maybe less than 12 properties, why give up 10% on property management? Don't do it, do it yourself. All they do is collect rent, contracts....the easy stuff and when the property does need maintenance, they aren't out shopping the market for 'discounted' contractors to do the work. Me: owner of 14 rental for over 20 years.
I was thinking this. Would love to get my hands on a few rental properties but was never quite in the right place to kick it off.
Now I have kids and I’d rather spend my time with them. It also doesn’t help I have a good salary at a big corporate but if I had been a little more aggressive with my savings in my early 20s I probably could have had 2-3 houses by now.
Owell, all you can do is try to help the kids do better.
Great info! Transparency and breaking the numbers down helps me understand the real estate game better. Definitely gotta watch out for slimy HOA fees hidden as condo association fees, I would of never figured
12% is completely unrealistic COC for residential investment properties
what is coc?
@@aguitadeajonjoli4123 Cash of Cash Return
Probably more realistic in Peoria- it’s a s***hole where no one wants to live, so you won’t get much appreciation and few investors want to own property there. Plus lower income housing typically has higher CAP Rates.
@@aguitadeajonjoli4123clash of clans
I hate the term Market Rent. I think it is scum. Raising your rent because others did it. That's the reason why rent is going up, not because of higher cost, but greed. Because someone wants to squeeze their tenant harder. Not because the taxes are higher or repairs are higher. Raising rent because you want to get richer for no reason is despicable
Literally go buy a house then stop fucking renting. Stop complaining, this country is built for wealth. Either play the game or don’t
And the rent goes up because there's a lack of supply.
If you want lower rent, then make sure you write to your local politician to make it easier to build homes.
Great video, I think the only change is advise was just putting a small list in the opposite corner when you are going through your preferred list! It’ll make it a little easier to remember the list later!
0:16 ha well this was rescoped
At least you started getting into real estate. Onward and upward. I find dividend stocks to be much simpler even if they don't yield as much.
Thanks a lot for breaking it down with numbers! Am almost ready for a down payment for a rental but will not be pressured or look for anything with condo fees after watching this video. Outrageous they can just raise that at will. But sounds like in a few years this will all be worth it for you after hitting 12%. Thanks!
Yeah... I'd been considering getting into real estate in the past, but after running the numbers and taking into account the added stress and work of maintaining a property, it just wasn't worth it for me. I'm good being lazy, renting and investing in growth funds for the foreseeable future...
My mans has just passed his one year of youtube and with this being the first upload to the channel. Youre killing it Caleb!! Good job, just 490k Subs and literally gonna hit 500k by the end of the week. Keep it up, doing amazing work and helping those in need!
The comment right away about not telling people what to do with their money made me laugh. Oh how the times change.
10/12/2023. its crazy how far you have come in 1.5 years on youtube. mr beast energy
Caleb, I love your content. You look a lot healthier today even than you did in this video. Keep up the awesome work! You really hit a nerve with your channel.
Crazy that a 7% cash on cash return can be considered a "disaster" in the US. It's very hard to just break even in most european countries.
Oh…….how far you’ve come big dawg
Getting started is the hardest part, once you get over it; it gets a lot better. Buying rentals is the best thing I ever did, changed my life forever.
Wow, the mortgage to rent ratio certainly seems to favor the owner in the US. In here, there is no chance to have a 30yr mortgage payment lower than a rent after putting 25% down. Is there some site or a study with a good comparison, country by country? I haven't found anything.
Why would someone voluntarily agree to pay 25 more a month than their lease required? Also you use a property management company so how could they even know about the concerns you had in selling the property unless you intervened and are not even using the property management company for their intended role? Rather you or the property management company implied you were considering selling the property in search of more money beyond agreed to could possibly open you up to a lawsuit. Unless the lease is one way and lets you throw out the tennant at any time within the lease period which would be pretty rare otherwise rather sold or not the lease remains in effect.
I’ve been recently watching your videos, and some of the interviews/collaborations you have has me here watching from your first upload and working my way up.
Hey im from the future....and your financial audits gonna make you a millionaire
Caleb before the gooning got him
this sounds like a great success. 90k for a condo? Ive been looking around my area hard pressed to find anything under 300k. 130 a month plus equity, get 10, 20 more and you'll be set in a decade with a nice portfolio you can sell or eventually reap the full rent once the mortgage is paid off.
I appreciate your candor, honesty, and details. Your story is helping me with my rental properties.
I'm curious why you don't include the income property tax benefits in this video. Property of a huge tax shelter in the states.
You came down with a case of FOMO. Even if you don’t hit that 12% at least you can look at it as diversifying your portfolio. An actual physical asset that you can sell at any time or, God forbid, you or a family member can downsize into in case of financial disaster.
the biggest issue is probably the condo fees that can just be upped at anytime, and is basically out of your control.
Definitely good to know, thanks for sharing!
Subscribed! Can’t wait for more videos.
Where the heck are you finding a $90,000 condo?
can find them in Florida and that area sucks and about to crash down to the ground hardcore
I enjoy listening to you talk
Having a positive cashflow at all is such a foreign concept to me. In my country your biggest hope is getting tax breaks but the property is almost ALWAYS cash flow negative
Please be kind... I’m trying to replicate your numbers @6:28 but I’m lost. $297/mo is not 3% of $87,500 or $90,000. And $989 is not 10% of $850 (granted, maybe the management fee is not exactly 10%). Help me out?
Bring back these videos
Great video. Like to see more rental property videos.
I would love to see all the beginning videos I am not sure which is the first one
I would not call this a disaster at all. The benigning was not terrible and you have a clear plan moving forward that will get you to the 12% COC.
If it were me I'd call this a success honestly.
It just does not hit my desired metrics :/ but the tenant is moving out soon and we should be able to get higher rent!
Do you still have ties to Peoria? New listener and fan, pretty cool to hear my hometown mentioned
Loved your videos so much had to start from the beginning. I've been binge watching for a week 😅.
4% in the pandemic? Did you shop around?
Not enough
Dude. I'm so sorry. Being in the business myself, you can't make the deal better with more money in the deal. That's the same as increasing your bets at the betting table.
My sister lives in the Peoria area. I’m about 2.5 hours from there. Decent city from what I’ve seen. Caterpillar manufacturing is a big employer.
What does cash on cash mean?
A legend was born...
$297/year for repairs? That’s cute 😂. My wife and I own 8 units in Chicago so yea, that’s way too low lol. But congrats on getting started!! Excited to see you keep growing your empire 🎉
Thanks for sharing with us your lessons!
Who even is this guy compared to today 😂
Thank you so much for sharing. I'm looking to buy my first investment home within a year from now this helped a lot!
Glad it was helpful! Let me know how it goes :)
If you own a property in Peoria IL keep an eye one way CAT is doing. The property market ebbs and flows based on what they are doing.
where'd the $989 come from? 10% of what number?
What's the condo worth now?
Id lime to get into renting properties but need help budgeti g
Those are insane rates you have in the USA, on a 87,500 property rental being 850 that's aprox 10 years gross income to pay the propery. Here in Slovenia having a rental you can be lucky to get 17-20 years, or aprox 7% gross APR. I paid slightly more for my rental property and the market rent is almost half of what you get :)
So I am basically only counting on long-term equity and paying down the mortgage, there is practically no cashflow income, it's a break even at best.
Good. Get a real job and actually do some labor for your money instead of owning the building someone lives in for profit. Extortion
@@andrewelkins9728 He bought the property and pays the mortgage for it every month. You should save that energy for the multi billionaire corporate buying entire neighborhoods
Is there any way you can write up a rental agreement to include the property association fees? For example, say rent is $700/month + ($2400/12) for association fees, so if the fees increase, the rent automatically increases?
you can write a contract to include anything. a contract could say the renter has to agree to make an omelette at 7 am on every sunday morning.
As long as both parties agree!
How do you calculate cash on cash return ?
This is great content, thanks Caleb!
Fetus Hammer
I was wondering what market you were investing in. Are the rest of your properties out of state as well ?
Thanks for sharing! If this is your definition of a failure, then you will do just fine. Trust me. I'm just a little bit older than you and this really isn't that big of a deal.
Yeeah, condo fees sucked. My first place i owned was a condo so I was new to the concept of HOA fees. The monthly HOA fees were already steep going in but i was freaked out when an emergency HOA fee (double) was added onto it for a couple years. I was locked in and I was terrified I couldn't afford it. I turned out fine in the end but it was quite anxiety inducing.... the HOA fees combined w/ my mortgage felt like i was just paying rent.
Condos are cool for the lifestyle but they don't feel that financially lucrative.
Ugh it’s BRUTAL
Would love to know what brokerages you partner with!
Did u buy under ur name or LLC?
Question here. Should I buy my first investment property cash or only put 20 percent down?
Not going to give you an answer as I am no way qualified to. The decision you make is going to depend on your risk tolerance. Generally, the one you buy via cash is going to have no way of going insolvent and you'd have no mortgage so the individual return would be higher. If you were to buy 5 rentals at 20% down, you'd definitely be able to cash flow more but there is more risk, say if you can't fill a residence or you have to renovate one due to bad tenants just because you'll have 5 mortgage payments to worry about.
Just remember to invest in landlord friendly states in the future. Best advice I got from my mentor when looking out of state.
Caleb Hammer the composer 🎼????
The one and only :p hahah
How old is Caleb?
First time Watching first video, I am enjoyed it 👍👍
You will look at this video someday and see how far you came.
I want to say I hope so, but also so fearful of jinxing myself lol. Thank you so much! ☺
Called it!
Doesn't really seem that bad
Was this your first video ever?
Thoughts on Morris Invest scandal?
I'll have to look into that a bit more!
Caleb please help me with my first rental property we could film it and all
I had a house built as an investment. Had phenomenal renters over the 12 years. Sold it near the peak last year and came out 300k ahead.👍🇨🇦
I care! 🇨🇦
I noticed in your videos that you don't much mention the opportunity cost of the money that you invest / use. More details on that would be nice
I will never be a landlord. The closest would be to own and lease out a parking lot. At present. the cards are stacked against landlords. Costs of money and insurance, condo fees and possibly real esate taxes will all be going up, while landlords are evil when they raise rents.
I would never own out of stsw residential real estate. I want more control. When thinks break, who chooses the reapir contracto?. The management company. Not for me I always include closing costs in any realestae deal. So you had no instant equity.
When you buy a condo you must review the association's financials. Are the reserving enough for major repairs, or will there be assessments?
I can earn all the qualified dividends and long term capital gains I want w/o any income tax. That seems a lot easier.
When rent is reasonable and income is reasonable then no one cares when you raise rent, but landlords are raising rents because they owe a mortgage on a property that they're leasing out, and most of them don't have a 9 to 5 and they're trying to get rich off of hard workers and you don't have to raise rents, everyone raises rents because everyone else is doing it, not because you have higher costs. And landlords think that they get no sweat top tier profit, when you look at people as a paycheck. I tell most landlords to get a job and stop getting rich off of me.
@@KingLarbear poor man's mindset
Fear of missing out man :/ we fucking ball tho
@CalebHammer bro teach me how this is your first video on your channel and it has almost half a mil in views
Kudos
why 12% though?
I want to beat the S&P
What’s your return if you include equity growth from paying down the mortgage?
The road begins!
It does!
dont worry its not your biggest failure of all, just your biggest failure so far
😮
Its a bit entitled to expect that much cash flow right out the gate
Noob mistake. You'll do better on the next one.
Is this your first ever youtube video?
Comment for algorithms 😂
A cockroach's life, when you produce nothing useful to society.
Can you explain what this statement means?
@@NoRegertsHere landlords are cockroaches aka nothing but a pest
Any comment below
I had decided to come back and binge all of your uploads starting from the beginning. Super annoying to find the amazing channel 6 months late but grateful for all the vids🥲
th-cam.com/video/EWzWNuZZnho/w-d-xo.htmlsi=t2VDAoQ54FKztgao