Hi everyone. I’m in the process of trying to purchase my first investment home but am getting scared about all the news reports on tv, in particular the fact there is this talk about sub-prime lending. However, since I’m an engineer by trade, I’m not sure what to make of it. There are several websites out there that report incredible findings like http://www.homebust.com. I remember once hearing that real estate can and never has gone down. True?
One of the most important things to remember is you make your money when you “buy”. It’s all about finding the right deals.
Gloom and doom. He he he
Run for the hills! We’re all doooooomed.
If you go in with a level head and your eyes wide open, you won’t have a problem. For a beginner, I would say:
(1) Don’t put a large % down, especially if you have to do it to be able to cashflow. Limit your out-of-pocket and leverage where you can.
(2) Don’t use adjustable or gimmick mortgages. When these adjust, trust me, it won’t be in your favor.
(3) Do good cashflow analyses on you properties before ourchasing; Make sure there’s a cashflow.
(4) Put your profits where you can get to them if/when you need them (“reserves”) – don’t spend all of your profits.
It’s not ‘rocket science’ but it takes some time, some planning, and some patience…
Before you buy, MAKE sure you are getting a real deal…That means doing your due diligence…Don’t trust agents, most don’t have a clue…
I personally think this market, in certain areas, is headed lower. However, if you where to look at ANY investment thoughout history you will find that the best opportunities were when people felt just like you do now. A little scared, nervous and worried about bad news everyday in the papers. I have always thought that when you hear it on the nightly news it’s TOO LATE. Just look at the TV shows on flipping houses. This is THE worst thing I have ever seen as far as roping in newbies. IT SCREAMS TOP OF THE MARKET!!
Take your time. You’re an Engineer. You’ve been trained to be methodical, precise, to look at details USE IT! It’s the best way to look at real estate investing. Don’t listen to realtors. Listening to realtors thoughts on any given market is like going into a car dealership and asking a salesman if he thinks you should buy a car.
Look at a lot of houses. This is the best way to see what sells, how fast it sells or worse doesn’t sell, and how much these properties bring. Asking price and selling price can be worlds away.