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| I believe you but I think those opportunities get bid out after a couple years and a few guys hear about them.
The problem with hog barns as I understand it is the buildings are wore out by the time the note is paid and your buyer requires you to update something. I know they treated a lot of guys well in the past though.
The guys responding on here are specifically saying the properties do not cash flow for some amount of time. I've heard your 1% rule, I think you'd get laughed out of town asking 1% rent on any property I've seen for sale here the last several years.
I disagree that buildings appreciate. The land and building site might, but the structure is trying to collapse/burn/freeze/rot every year and it's your problem to keep it from happening. I'd guess a true accounting of repair and maintenance is staggering over 40 years.
I get leverage but if there's no cash flow I don't see the point, you're still losing ground or just treading water and have the joy of paying interest to do it.
For reference $60k (down payment on original building) dumped in the SP500 in 1980 untouched until 2022 would be about $8 million. So in my mind if the previous owner didn't net $7 million in rents after repair, maintenance, taxes, and insurance building and managing the place was a waste of time. | |
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Rental Income Breakdown and K Shaped Economy
