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Rather than drive the Operation: Blood in the Streets thread off-topic, I figured I'd start a new one on these topics.

Anyone done investments in peer-to-peer lending? I've started to dabble with it this past month. After doing the homework, I've put a little capital in said to see how it does. I'm at least mildly surprised at the rates people are paying. If it pans out, great, I'll move over more. If not, meh, dump and move on.

I'm also seeing reports of a crash in housing coming. I can't help but wonder if it isn't time to look into buying properties on the cheap and use them as rental properties. For a number of reasons I'm less keen on this one, but it is something to consider.

Anyone done either or both in recent memory? If the former, what platform did you use and how was your RIO? Other thoughts?

P.S. This one has been dubbed Operation: Raunchy Monocle, because Operation: Loan Shark sounded too negative and being silly is more fun. (giggle) :p
 
If you have the cash to cover the mortgage while the economy is rebuilding it might ok, that said I've never been one for high risk investments. Although in hindsight I would have bought property along with other investments.
 
Real-estate has made more people wealthy than any other way. We have beat the horse a few times on this forum but not all debt is bad debt imo. Everyone has a different risk tolerance find yours, make a plan and work the plan. Great income and job security make the risks more manageable.

I for one will be looking hard to add to my rental portfolio. I prefer commercial rentals specifically commercial industrial in larger growing citys. In the 10 or so years of ownership I have never had my industrial rental vacant for more the one month. Only bad part is the financing. Larger loans are negotiated every 3-5 years.

If I were looking for a house rental I would look for a upper middle class house at least. Low cost rentals seem to attract low end renters who dgaf. YMMV
 
Thanks for the thoughts. Very interesting ideas @USMC1911. I'll have to do some homework on commercial/industrial properties; I can see some advantages there. (I have done some research on buying rural land and leasing it to agricultural concerns, but not enough to move on it, and that is another topic.)

With respect to the peer-to-peer lending, I'm just dabbling now. The portfolio is the normal stocks, bonds, and precious metals, and will continue in such vehicles for now.
 
Use caution before jumping into becoming a 'slum lord':
  • People's bad credit, inability to pay, or simply not caring since they're already screwed and thrashing your place in the process.
  • The 'free rent' movement.
 
Home prices. I expect a drop, perhaps worse than 2008/2009. ...but it will take a bit.
  • Approximately 6% of mortgages in forebearance now.
  • Consumers starting to take credit hits.
  • Foreclosures will take 6+ months. The banks couldn't handle the volumes then, so if higher volumes in 2020 and into 2021 then?...
  • So a drop in home prices will lag, but I expect it.
 
Use caution before jumping into becoming a 'slum lord':
  • People's bad credit, inability to pay, or simply not caring since they're already screwed and thrashing your place in the process.
  • The 'free rent' movement.

Candidly, that sort of thing is a part of why I've shied away from building assets through rental properties. That and time commitment. The company who we bought our land through, and lease my office space, also does property management, so they could be tapped to handle said.

Home prices. I expect a drop, perhaps worse than 2008/2009. ...but it will take a bit.

Agreed, from what I'm reading. It hasn't hit the fan yet, but this economic situation has just begun.
 
Rather than drive the Operation: Blood in the Streets thread off-topic, I figured I'd start a new one on these topics.

Anyone done investments in peer-to-peer lending? I've started to dabble with it this past month. After doing the homework, I've put a little capital in said to see how it does. I'm at least mildly surprised at the rates people are paying. If it pans out, great, I'll move over more. If not, meh, dump and move on.

I'm also seeing reports of a crash in housing coming. I can't help but wonder if it isn't time to look into buying properties on the cheap and use them as rental properties. For a number of reasons I'm less keen on this one, but it is something to consider.

Anyone done either or both in recent memory? If the former, what platform did you use and how was your RIO? Other thoughts?

P.S. This one has been dubbed Operation: Raunchy Monocle, because Operation: Loan Shark sounded too negative and being silly is more fun. (giggle) :p
I doubt great deals on homes are on the horizon. Even if a crash happens (unlikely in my view), the lenders will just sit on the properties. I saw really nice half million dollar homes sit vacant for years after the 2008 debacle. It seems crazy but somehow it must benefit the lenders to have these homes sit vacant rather then sell or rent them out. The lower dollar homes will always have buyers lining up.
 
Buy land or plots on the cheap, and try rental storage units. Low overhead.

Interesting idea. Funny you mention it because one of those storage units were for sale locally and I was interested in buying for passive income. As so common with the people in this area, I couldn't get a call back. Oh well.

Parenthetically, I never under why people would throw money away storing crap in such a facility, but if it brings cash flow, I couldn't care less. :D
 
This is smart on the lenders part so they can avoid a repeat of 2008. I have a CS of a little over 700 and I would not consider my credit stellar.
 
Interesting idea. Funny you mention it because one of those storage units were for sale locally and I was interested in buying for passive income. As so common with the people in this area, I couldn't get a call back. Oh well.

Parenthetically, I never under why people would throw money away storing crap in such a facility, but if it brings cash flow, I couldn't care less. :D
I thought the same and agree with you. I almost did the same out east but I did not want my farm to be part commercial.
 
I'm also seeing reports of a crash in housing coming. I can't help but wonder if it isn't time to look into buying properties on the cheap and use them as rental properties. For a number of reasons I'm less keen on this one, but it is something to consider.
With many states / areas not allowing evictions I just can't see this as being a good time to be a landlord. That and my nature would just not feel good knowing many people (up to 30% I'm hearing) are currently not able to make rent / mortgage payments due to the virus issues.

It seems mortgage companies have learned a bit from the last time and it appears they are more willing to work with folks who cannot currently make payments. This is positive, because without some if this, I see property values tanking for both residential and commercial. Commercial may be a given no matter what with all the companies going under or filing for bankruptcy. Airbnb owners are already having massive issues.

These are challenging times, which always means great opportunities. Good luck with your ventures.
 
I saw really nice half million dollar homes sit vacant for years after the 2008 debacle. It seems crazy but somehow it must benefit the lenders to have these homes sit vacant rather then sell or rent them out.

Noticed something similar when we were buying. It must be some sort of write down or something.:confused:

Heh, I had no debt also, which gave me a zero credit rating. Veteran loans are awesome in that circumstance.
 
Buy land or plots on the cheap, and try rental storage units. Low overhead.

Looked pretty heavily into this idea a few years ago. We ran into a few problems. Most were zoning based. We were looking into outside storage for trailers, boats, rv, and the like. Most of the reasonable priced properties that were anywhere near a population center that would utilize the storage were not zoned for it as most were zoned for agricultural use. That would require a zoning change from the city and here in Salem thats not cheap or easy. The cost of building enclosed storage was out of our price range. That requires LOTS of capital as you have a ton outgoing before the first tenant moves in. I was really really surprised how expensive it was going to be to build storage units. We got several bids on construction and most were in the low $40 per square foot. IIRC the best bid we got was $38.
 
I started my remodeling career over 45 years ago, and one smart guy I worked for would rent his houses with a "Rent to Own" option written in the rental contract.
He would set up a portion of the monthly rent money into an escrow account and after a few years the renters had the option to match that amount and use it for a down payment for buying the property on a private contract.
I did notice that most young couples that had rented from him never did come up with the matching funds, but they took real good care of the place, because they had some pride of possible ownership.
 
Looked pretty heavily into this idea a few years ago. We ran into a few problems. Most were zoning based. We were looking into outside storage for trailers, boats, rv, and the like. Most of the reasonable priced properties that were anywhere near a population center that would utilize the storage were not zoned for it as most were zoned for agricultural use. That would require a zoning change from the city and here in Salem thats not cheap or easy. The cost of building enclosed storage was out of our price range. That requires LOTS of capital as you have a ton outgoing before the first tenant moves in. I was really really surprised how expensive it was going to be to build storage units. We got several bids on construction and most were in the low $40 per square foot. IIRC the best bid we got was $38.
Yes, buying building storage units would be pricey, but why build when you can buy shipping containers for cheap and then a few grand more to make them suitable. That was going to be my plan.

However, zoning lands or plots in the city is a headache i do not want.
 
We have a couple long term house rentals and a couple vacation rentals. In my opinion they are more trouble than they are worth. Your time is worth something too. There is something to be said for living modestly and quietly; how many guns do you need? ;) Read a book rather than mowing a lawn or dealing with flaky renters. If I were to do it over again I might go with just one rather high end rental property near my own home and good quality long term renters. I might try managing it myself or just go with a management company if I got tired of that.

Wife and I once owned a dude ranch: billcodyranch.com
That was even more work and headache, vastly more, but it was work I enjoyed, when I could find decent people (not that easy to do). We lasted about 5 years but got lots of great memories out of it, even if I spent too much time crawling under cabins and fixing plumbing breaks, or chasing horses that got loose.
 
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