Need some inspiration from fellow investors.

Need some inspiration from fellow investors. Have been saving and investing in SFRs for 6 years. Up to 13 now; great appreciation (8-10% annual) but I am in an area with huge property taxes and my cash flow is minuscule. Bought a 16 unit last year but turned out to be an old building with tons of repairs. No cash flow there too. What can I do? Need cash flow to quit my job, or should I just be happy with equity values?

Do you have property management or are you self managing? If you have that much appreciation are your rents going up also? Have you tried fighting tax increases or looked into it? Do you mind sharing where you’re located?

Karla Fliehler Ross hi. Yes and yes. Fight tax values through a law firm every year. Austin area.

Yuvaraj Vimawala A market like Austin is tough because you’re probably paying premium prices, which is the trade off for having premium rents and premium appreciation. If your goal is to retire from your regular job would you be taking the management over yourself or would you still like to have the properties professionally managed? You ought to be able to manage 24 units on a part-time basis and still have a lot of free time if you took over the management. I guess I would look at what you’re spending on management fees, what you pay that law firm to fight your tax appraisal (you should be able to review their work and duplicate what they’ve done at this point?), and figure how much lower your expenses would be if you were managing it yourself versus the management company handling everything. (not implying that your management company is doing anything wrong… That’s just the reality of having property manage versus self managing) When that dollar amount all totaled up replaces your income from your regular job you can retire & have a part-time job managing your own property. If you have no desire to handle the management yourself then you probably answered your own question in your post. In my experience the best way to ensure cash flow is at the time of purchase, by getting stuff at a bargain price. Unfortunately that’s just not the reality in Austin right now because everyone is clamoring to buy properties and from what I’ve seen people are paying some ridiculous prices that I can’t even fathom. Feel free to PM me if you would like to toss ideas around further. I’ve been doing what you described for the last 20 years. The main difference is I self manage and I also do third-party management for other people so I know that side of the equation, too.

Karla Fliehler Ross very valuable feedback. I almost self manage; just have an assistant and have developed my own systems and processes. If I self manage I’ll probably just save $6k/year. I also buy at auction so get a decent bargain under market. Prop taxes are killing me. ($80k total). For my MFR, have to have a manager as it’s C- tenants and location. Thanks for the advice

You are in the Waco area, right?

Jana Hinshaw SFRs in north Austin, Tx. Mfr in Waco, TX

I bought an older building with tons of deferred maintenance! Took me a year of repairs and my cash flow sucked!!!! I gained no joke about 200k in equity, and increased the rents up about 30% on the renovated ones. The building has a stigma and high vacancy rates. Took it from the management company and now doing it. Guess not every win is instant and it takes time to get it where you want.

Shanda Mays thanks, I hope I can get there too

I've experienced very similar issues over my course of investing. Bought my first single family rental in 2006. Took me 5 years to buy the next thanks to the recession. Now I have 19 doors. (Mostly duplexes and an 8 unit)
I didnt start to make any actual money until the last year or two. Constantly dumping money back into the properties. Now they are pretty much all renovated and cash flowing like a king!