Augment Trading with Real Estate

C

cubsguy81

I was curious how many ETers also manage Real Estate investments in addition to or to augment their trading. I am doing ok trading but looking to add cash flow positive Real Estate to my portfolio in the coming year with the low rates and depressed prices.

My thought is to own rental properties (likely apartment buildings in Chicago) that are contracted out for management and continue my trading during the day. I have time in the afternoons/evening to search for potential deals.

Just wondering if anyone else does this.
 
Quote from cubsguy81:



Just wondering if anyone else does this.
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Why not buy a REIT?

It sounds like an OK idea if you actually become a property manager and realize it will become basically a part-time job. Property management firms will take a bunch of the income and leave you with all of the risk.
 
That's interesting you mention that. I'm moving to Chicago in a few months to start my career trading but I'd also like to dabble in real estate and buy some rental properties. In my research I've been surprised how affordable apartments are comapred to other big cities. I don't really want to be a property manager unless the cost of hiring management is too high. Anybody know the going rate for property management there? Where I am 8-10% of monthly revenue is the going rate. I don't think that's too bad if you're just trying to break even at the end of the month.
 
IMO- Real Estate is a full time profession if you want to do it right. Would you dabble in law or surgery? Probably not, if you wanted to be successful. The last 12 months have proven to us- real estate is not for amateurs. Find your core competency and stick to that. If you want real estate exposure, let a pro manage your stake with a REIT. Then dedicate 100% of your time to trading.
 
Quote from runningman:

IMO- Real Estate is a full time profession if you want to do it right. Would you dabble in law or surgery? Probably not, if you wanted to be successful. The last 12 months have proven to us- real estate is not for amateurs. Find your core competency and stick to that. If you want real estate exposure, let a pro manage your stake with a REIT. Then dedicate 100% of your time to trading.
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I'm not talking about full on becoming a huge property developer. I'm thinking why not buy something while the market is depressed, letting some company deal with the renters for a percentage of the revenue and hold on to it long term. Make sure it looks good enough on paper to break even and after a few years you have some of the equity paid down by someone else and hopefully you capitalize some on the appreciation. It's not lucrative enough to do full time unless you can borrow a couple mil in my opinion.
 
Quote from cubsguy81:

I was curious how many ETers also manage Real Estate investments in addition to or to augment their trading. I am doing ok trading but looking to add cash flow positive Real Estate to my portfolio in the coming year with the low rates and depressed prices.

My thought is to own rental properties (likely apartment buildings in Chicago) that are contracted out for management and continue my trading during the day. I have time in the afternoons/evening to search for potential deals.

Just wondering if anyone else does this.
More...

I currently do, but its not like i was actively searching out to do it. Just renting out my old place since the loan was paid off....pretty much good for vacation money every year:)
 
Quote from otcstockfund:

I currently do, but its not like i was actively searching out to do it. Just renting out my old place since the loan was paid off....pretty much good for vacation money every year:)
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OMG I bet you dedicate 50 hours a week to it like a doctor or lawyer.
 
I'm looking into this as well. My research has turned up that management companies take 10% of the rent collected. Of course, you have to pay for any repairs over and above this but you don't have to deal with the day to day tenant calls.

I think it is a great idea Cubsguy if you can find properties that are worthwhile. With low rates, somewhat depressed prices (not as much in Chicago as elsewhere), neighborhoods that will be on the rise (i.e. Logan Square and Uptown) and the likelihood of good appreciation in the years to come it should be solid to proceed.

I do agree with the comment to focus time at your core compentices, whether that be the markets or the real estate market. But if you can scope on the weekends and make a few deals that are worthwhile why not?

Multiple streams of income are always a good thing.
 
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