In Louisville Newspaper

iVillage Member
Registered: 11-17-2007
In Louisville Newspaper
1
Sat, 03-07-2009 - 10:52pm

I just thought I would post this for interest sake no other reason.


Louisville is set up pretty much like this at least the core city is. There is the historical part where my old house is downtown. And then there is the east end which has a lot of very large historical homes also and very high prices. South end where I am now middle price houses. And the west end. Now the west end is made up of seniors and fixed income people and low income workers

iVillage Member
Registered: 08-04-2008
Sun, 03-08-2009 - 2:22pm

Mary Ann -
Yes, in Detroit it is exactly like that. Many homes were purchased by so-called investors, who did minor updates then rented them out.

I bought 3 homes that way in Ohio in the late 90s. Bought one on the courthouse steps for $8,000 and refinanced it for $14k. We did put some work into each of the three houses and my Ex still has them. They are all rented out, two to Section 8 people. But the difference was that we passed on the ARM, and got a 15 year fixed mortgage at 8-9% on each home. They are almost paid off now, only 4 years to go. They get inspected yearly, and one lady is just glad we never raised the rent on her as she does not want to move ($485 a month is all she pays.) We only had three homes because that is all we could afford to do reasonably, and had time to keep up. I even used to bring the kids in the homes a packet of school supplies each, Halloween goody bags, a poinsettia for Christmas, flat of flowers for spring and we helped them when they were late, but it was a business, so we did have rules of the lease to follow.

We knew a lot of people in that area that kept taking more money out of the homes, buying as many as 30 or 40 of them and living on that income. Landlording is hard work, and it was not my aspiration in life to be a landlord, so the three just helped us balance out our portfolio. Rent from two houses can pay all the bills for all three, so that gave us a 33% buffer in case of bad times. Usually we could get a tenant in within 30 days of the last one, and that one lady has been there since we bought the one house.

In 4 years they will be paid off and my Ex will have a nice little income from them as long as he decides to keep them.

There was a gold rush toward landlording and all those infomercials and books about buying real estate with no money down, they strapped themselves and took out huge mortgages. Those folks are also people who should be held responsible for this recessionas well as the appraisals. Our remortgage money went back into the properties, not into our pockets.

-Ski