April 28, 2011

Can You Still Buy Rental Houses in Omaha?

YOU BETCHA! In todays market there is a 2 step process that can make you very wealthy. Two steps...but you must do both to succeed. They are: 1) MAKE OUTRAGEOUSLY LOW OFFERS. Then once purchased, 2) RENT THEM ON SECTION 8. Lets examine both steps.
MAKING LOW OFFERS - There is so much inventory on the market making this the best buying situation in decades. Many sellers are beyond motivated and this includes investors that must unload for any number of reasons. I have seen houses that sold in $70,000-80,000 range 5 years ago sell today in the $40,000 range. Will the housing market recover? Yes! It will. How long will it take to recover? I don't know, but it will.
Now when you make these offers, say half of what the seller is asking will they be offended? Sure most will but who cares because you will eventually get the seller motivated or desperate enough to accept. It will probably take several offers but then one comes back to you with a yes. This also includes banks as they need to clear foreclosed inventory.
You still need to have a cash line of credit and a lender that will lend on investment property. This is more difficult to line up but not impossible.Buy with cash then put a loan on the property and repay your line of credit. Keep repeating this step.
As an investor myself the type of house I look for and would recommend would be the 1950s or 1960s built ranch style house. The older house built in the early 1900s most often comes with much more repair issues. I tend to avoid anything built prior to 1950. The house can be either 2, 3 or 4 bedrooms with a garage. I always want a solid foundation, newer roof and a good working order furnace and AC. It goes without saying they must be in well kept neighborhoods.
SECTION 8 IS 2ND THING YOU MUST DO - If you're a new investor, it is a simple process and if you're an experienced investor not using Section 8 for whatever reason you should strongly consider it. The main advantage is the rent that OHA is paying. As of today a 2 bedroom will rent around $700.3s are getting around $900 and $1000+ for a 4 bedroom. These amounts are generally much higher than what you get for a non Section 8 tenant. You receive the rent at the begining of the month automatically deposited in your checking account. Another reason to rent to a Section 8 tenant is on average they stay 3 times longer than a non Section 8 tenant (anything to avoid a vacancy in this business!).Also I have far less evictions with Section 8 tenants. You do have to pass an inspection before they move in but these are things you would generally do anyway before someone moves in.
Repeat this process 25,50,100 times in this market and once it recovers to the old values... well you can imagine a lifestyle you could create for yourself!
If you want to further discuss investing in rental houses feel free to call me at 402-250-6054.

No comments:

Post a Comment