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"Keith Kelley, a Las Vegas estate agent, has an investor interested in offering about $80,000 for a foreclosed, four-unit apartment building which, fully let, c

"Keith Kelley, a Las Vegas estate agent, has an investor interested in offering about $80,000 for a foreclosed, four-unit apartment building which, fully let, could bring in over $25,000 a year in gross rent." Wow, when reading stuff like, I sometimes wonder if I'm not wasting time putting all my efforts into web apps, etc. Find a few deals like this, hire someone to maintain them, profit. Of course, I'd probably hate every second of it, but still.

kiba 18y ago
It is not a waste of time to write web application. You have a comparative advantage in that area assuming that you're any good at it.
- dschobel 18y ago
  A counter-argument can be made based on the ridiculously low barrier to entry for web apps though. I'm finding this amongst even startups I think are darn useful. It's just hard to get noticed anymore. Everyone's (ie; the investors) are just looking for "disruptive technology", the next google, et al.
  - eru 18y ago
    Aren't the customers more important?
eru 18y ago
Gross rent is before costs, isn't it?
- jonknee 18y ago
  Yes, but the payments on a loan of that size are laughable. $70,000 at today's rates is $375/mo ($4,500 a year) for a 30 year. You could rent it out for a couple of years and pay off the loan free and clear.
  - menloparkbum 18y ago
    Ah... I wasn't aware that loans were that cheap or easy to get.
    - tomjen 18y ago
      Good credits, and somebody will be happy to lend you money.
  - deleted 18y ago
    [deleted]
    - rjurney 18y ago
      Break even is just barely making the payment on the loan. Repaying the loan - a 30 year mortgage - in 3-4 years is not only good, it is astronomically good. Because at the end of three years you have $25K gross/yr, and you own the building. When you own it, you can sell the building and make $75K (or whatever its value then is) in a lump sum.
      - josefresco 18y ago
        Ha! I love comments from people who have never been landlords. Key here is even after 3-4 years the building is YOURS. Which means you fix it, you maintain it, and you deal with late/lazy/messy/loud/obnoxious tenants every single day. And when they walk out without paying the rent, how much success do you think you'll have in small claims court recouping your rent? (hint: not much) Believe me, if it was "that easy" to buy and rent a place ... everyone would be doing it. Do yourself a favor and talk to someone who owns multi-unit buildings first.
        rjurney 18y ago
        Hey, believe me I know its not that easy! I'm no real estate guy but I know you can't repay the loan in 3-4 years. The comment I replied to was deleted, but I was addressing it, which said 'breaking even in 3-4 years is not a good investment,' by saying 'no, paying for the property in 3-4 years would be GREAT.' I know its not possible :)
HeyLaughingBoy 18y ago
Perhaps you are :-) A friend of mine likes to tell the story of him discussing a technology idea with a business-owner friend of his. The reaction of the businesss guy was "you know, I see all these tech guys building these grand online empires that never make them a dime. Meanwhile, Town Hall has a contract out for $100,000/year to vacuum the floors and scrub toilets and no one is bidding on it!" Just something to think about :-)
- falsestprophet 18y ago
  How can one find these contracts?
  - bmelton 18y ago
    In addition to the other link posted, all the RFPs (Request for Proposal) are listed at FBO.gov, browsable by type of work, agency, etc. That said, a lot of it is hard to get into. The list of company requirements for non-special bids is pretty long, and that's BEFORE you get into exclusive work that only 8A, Disabled-Veteran-Owned or Minority-Owned businesses can bid on. It's harder to get a government contract than it is to get a government job (read Federal Wasteland [http://federalwasteland.blogspot.com/] http://federalwasteland.blogspot.com/]) for more on that. If you're really interested, it's probably easiest to find a prime contractor that regularly does business with the government and sub-contract to them. Of course, I'm speaking of federal contracts, and all my experience is with IT. If you're really wanting to clean floors at your local town hall, it's probably outside the scope of what I know.
  - adbachman 18y ago
    Most governments (city, county, state, and even national) are required to post all requests for proposals (RFPs) publicly and consider all proposals they receive. As with any business or political process, it helps if you know people. http://lmgtfy.com/?q=city+RFPs%7Cstate+RFPs%7Cfederal+RFPs http://lmgtfy.com/?q=city+RFPs%7Cstate+RFPs%7Cfederal+RFPs
menloparkbum 18y ago
That seems like a bad investment. It would take 4-5 years to break even, IF the building is fully rented.
- jonknee 18y ago
  What do you mean break even? Take in $80,000 in rent? I'd say buying the building and taking in more money every month in rent than I'm paying on the loan is more than breaking even. And that's day one.
  - menloparkbum 18y ago
    yeah, I replied to your other comment above. I didn't know the loans were so cheap.
sethg 18y ago
That depends. If the building has been so broken-down that it will cost a lot to put it in rentable condition (e.g., people came in and stripped out all the copper wiring while it was foreclosed and abandoned) or if there simply isn't much demand for rental housing in Las Vegas right now, then the investor can still lose money on this deal.
mhb 18y ago
Isn't the problem that no one wants to rent the apartments for $520/month and no one has any idea when someone will want to rent them?
eru 18y ago
Why would you hate it? Finding mispricings in the market and correcting them should be very rewarding.

kiba 18y ago

It is not a waste of time to write web application. You have a comparative advantage in that area assuming that you're any good at it.

dschobel 18y ago
A counter-argument can be made based on the ridiculously low barrier to entry for web apps though. I'm finding this amongst even startups I think are darn useful. It's just hard to get noticed anymore. Everyone's (ie; the investors) are just looking for "disruptive technology", the next google, et al.
- eru 18y ago
  Aren't the customers more important?

eru 18y ago

Gross rent is before costs, isn't it?

jonknee 18y ago
Yes, but the payments on a loan of that size are laughable. $70,000 at today's rates is $375/mo ($4,500 a year) for a 30 year. You could rent it out for a couple of years and pay off the loan free and clear.
- menloparkbum 18y ago
  Ah... I wasn't aware that loans were that cheap or easy to get.
  - tomjen 18y ago
    Good credits, and somebody will be happy to lend you money.
- deleted 18y ago
  [deleted]
  - rjurney 18y ago
    Break even is just barely making the payment on the loan. Repaying the loan - a 30 year mortgage - in 3-4 years is not only good, it is astronomically good. Because at the end of three years you have $25K gross/yr, and you own the building. When you own it, you can sell the building and make $75K (or whatever its value then is) in a lump sum.
    - josefresco 18y ago
      Ha! I love comments from people who have never been landlords. Key here is even after 3-4 years the building is YOURS. Which means you fix it, you maintain it, and you deal with late/lazy/messy/loud/obnoxious tenants every single day. And when they walk out without paying the rent, how much success do you think you'll have in small claims court recouping your rent? (hint: not much) Believe me, if it was "that easy" to buy and rent a place ... everyone would be doing it. Do yourself a favor and talk to someone who owns multi-unit buildings first.
      - rjurney 18y ago
        Hey, believe me I know its not that easy! I'm no real estate guy but I know you can't repay the loan in 3-4 years. The comment I replied to was deleted, but I was addressing it, which said 'breaking even in 3-4 years is not a good investment,' by saying 'no, paying for the property in 3-4 years would be GREAT.' I know its not possible :)

HeyLaughingBoy 18y ago

Perhaps you are :-) A friend of mine likes to tell the story of him discussing a technology idea with a business-owner friend of his. The reaction of the businesss guy was "you know, I see all these tech guys building these grand online empires that never make them a dime. Meanwhile, Town Hall has a contract out for $100,000/year to vacuum the floors and scrub toilets and no one is bidding on it!" Just something to think about :-)

falsestprophet 18y ago
How can one find these contracts?
- bmelton 18y ago
  In addition to the other link posted, all the RFPs (Request for Proposal) are listed at FBO.gov, browsable by type of work, agency, etc. That said, a lot of it is hard to get into. The list of company requirements for non-special bids is pretty long, and that's BEFORE you get into exclusive work that only 8A, Disabled-Veteran-Owned or Minority-Owned businesses can bid on. It's harder to get a government contract than it is to get a government job (read Federal Wasteland [http://federalwasteland.blogspot.com/] http://federalwasteland.blogspot.com/]) for more on that. If you're really interested, it's probably easiest to find a prime contractor that regularly does business with the government and sub-contract to them. Of course, I'm speaking of federal contracts, and all my experience is with IT. If you're really wanting to clean floors at your local town hall, it's probably outside the scope of what I know.
- adbachman 18y ago
  Most governments (city, county, state, and even national) are required to post all requests for proposals (RFPs) publicly and consider all proposals they receive. As with any business or political process, it helps if you know people. http://lmgtfy.com/?q=city+RFPs%7Cstate+RFPs%7Cfederal+RFPs http://lmgtfy.com/?q=city+RFPs%7Cstate+RFPs%7Cfederal+RFPs

menloparkbum 18y ago

That seems like a bad investment. It would take 4-5 years to break even, IF the building is fully rented.

jonknee 18y ago
What do you mean break even? Take in $80,000 in rent? I'd say buying the building and taking in more money every month in rent than I'm paying on the loan is more than breaking even. And that's day one.
- menloparkbum 18y ago
  yeah, I replied to your other comment above. I didn't know the loans were so cheap.

sethg 18y ago

That depends. If the building has been so broken-down that it will cost a lot to put it in rentable condition (e.g., people came in and stripped out all the copper wiring while it was foreclosed and abandoned) or if there simply isn't much demand for rental housing in Las Vegas right now, then the investor can still lose money on this deal.

mhb 18y ago

Isn't the problem that no one wants to rent the apartments for $520/month and no one has any idea when someone will want to rent them?

eru 18y ago

Why would you hate it? Finding mispricings in the market and correcting them should be very rewarding.