Peer-to-peer lending, rentals, etc.

[ATCclears]

WSJ article, paid content. Net: it's going to get worse.


The mortgage market looks in many ways the same as it did before the financial crisis. Many mortgage companies aren't built to handle an economic collapse or help their customers through it.
The Mortgage Market Never Got Fixed After 2008. Now It's Breaking Again.

 

[ATCclears]

Second WSJ article, paid content. Compounding job losses are still coming.


A burst of job-cut announcements two months after officials moved to shut the economy to halt the spread of the coronavirus indicates many companies are bearing down as the economy searches for traction.
Company Layoffs Snowball as Recovery Appears Elusive

 

[USMC1911]

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.

If I had to guess it would be very very hard to get a city to sign off on storage containers as a permanent storage facility. Great idea but not sure it would be feasible.

 

[ATCclears]

An estimate that 11% of mortgages are now in forbearance.

Mortgage delinquencies caused by the coronavirus will exceed Great Recession levels, according to this forecast

The troubles homeowners face now could make it harder for other people to get home loans in the future.

www.marketwatch.com

 

[TTSX]

peer to peer lending? Like lending your uncle a couple grand? Man, I've had people "forget" to pay me $20 back. Maybe I'm untrusting of other people with my things.

 

[PaulB47]

This kind of lending is common in Chinese families - these extended families are much stronger than is common in white families (and yes there are some downsides to that). I think my brother in law has owed my wife money for decades now, but he was paying it off (until the covid19 scare). It doesn't bother me; it's her business, not mine.

When I was in the service, one of my friends occasionally borrowed from another (Ron). I asked Ron if he thought he was going to get his money back, and he told me his philosophy was to assume (without saying) that the money was a gift, not a loan. If it came back then all well and good, but he wasn't going to lose a friend over it in any case. Of course the amounts were pretty small back then; none of us had much money.

 

[CoastRange57]

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

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.

I think the lower end housing market may suffer some as people are finally evicted for non payment of rents as this sh*t show unfolds. The majority of the job loss damage was done in the service and lower end employment sectors. I have some real low ball standing offers in on some residential type properties right now. 60% of the asking price, but all cash, quick close deals. probably won't keep for rentals as that part of my life is over, but would polish and lipstick them and flip for 30% profits.

Storage units are great investments as far as I am concerned. Even at a $ 40 sf construction cost, that is $ 8,000 for a 10 x 20 unit. Renting at $ 150 a month at 90% occupancy you are cost recovered fully at 5 years. Very low overheads, virtually no energy costs. Passive income, you lock their azzes out if they don't pay.

 

[Member 5605]

Not many family members I'd loan money to let alone people that I don't know. I have held equity for short term loans for friends, pre941 I held firearms as collateral etc.

We needed a quick infusion a few years back, returned the loan with a lot of labor and 120% of the loan in cash. No interest was asked but we did it as a thank you.

For a large purchase, all bets are off the table.

 

[USMC1911]

Storage units are great investments as far as I am concerned. Even at a $ 40 sf construction cost, that is $ 8,000 for a 10 x 20 unit. Renting at $ 150 a month at 90% occupancy you are cost recovered fully at 5 years. Very low overheads, virtually no energy costs. Passive income, you lock their azzes out if they don't pay.

IMO great investment yes. But with many exceptions. That 5 year payback is not including LOTS of stuff like an employee to rent out the units or taxes on the income, property, payroll, insurance ect. Then you have the land purchase and the permits to build. Like I said we went down the rabbit hole pretty deep. Once everything was bought and paid the return on investment was just not what we were looking for. Looked much more like a the typical 15-17 year return on investment with TONS of capital up front. If you own the land already or have tons of time to oversee the construction, maintenance, rental and whatnot of the business it could be a great business.

 

[jbett98]

There's an elderly widow that I know near me that has an acre of gravel behind her house. She's tucked right in a commercial zoning area and she rents out the gravel parking area for long term RV storage.
I spray the weeds for her and other then security lighting, her upkeep costs are next to nothing.
Last time I was over there, I counted 42 travel trailers and other then opening the gate every now and then, she's raking it in at $120.00 a month

 

[CoastRange57]

IMO great investment yes. But with many exceptions. That 5 year payback is not including LOTS of stuff like an employee to rent out the units or taxes on the income, property, payroll, insurance ect. Then you have the land purchase and the permits to build. Like I said we went down the rabbit hole pretty deep. Once everything was bought and paid the return on investment was just not what we were looking for. Looked much more like a the typical 15-17 year return on investment with TONS of capital up front. If you own the land already or have tons of time to oversee the construction, maintenance, rental and whatnot of the business it could be a great business.

Yeah that was a straight up cash recovery, but it would be at least 10 years at 50% overhead / direct costs., so your numbers are more accurate. So much depends on the zoning. I saw a gravel lot in Culver a couple days ago that was fenced, and had had a bunch of containers on it, mostly 10 x 20, 10 x 40. Painted up earth tone, lot was clean and all he was probably flowing $ 4,500 a month on them. That is the way to go really.

 

[JustWolf2A]

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.

Just an example. I travel for a living and my house is rented out. I have stuff i want safe in a climate controlled area and dont want to travel with all I own. Plus high end storage like i have has security at night, cameras everywhere, and is in a nice area. I pay 80 bucks a month for it. Money well spent