I have about a little over 100k in the bank and have been wanting to invest it in real estate for as long as I can remember. I’ve read book after book, and every thread on this forum I believe.
I spend more time and energy I believe trying to dodge my first purchase than actually doing it. I get stressed so badly I get cold sweats and my mind just goes blank… lol
Ok, this is my situation (if you’ve made it this far reading my ‘feel sorry for me post’ thank you )
I live in California in a very expensive area that the rental market is great if you’ve owned it for years. If you’re just getting into it the purchase price would suck up all your cashflow unless you put 50-70% down. The problem w/ that is that duplexes around here are 6-700k dollars in a bad side of town.
I keep reading the long distance thing just doesn’t work out.
I have no choice, I can’t move at this time because of family medical issues and can’t afford to buy here.
My main goals are to buy investment property and reinvest the residual income in more rental property.
I guess honestly I would like to hear from some people if possible that have made it. What the steps they took, are they happy they did it…blah blah blah….
I really do like the idea of multifamily rather than duplexes and triplexes, although they’re the ones that seem to make the most return from what I’ve seen in an area I’m looking at.
Thank you so much you guys, I’ve never had a chance to thank all of you for your expert advice and tips.
Wait it out unless you can buy something that cash flows with a 10% downpayment.
Did you see the real estate foreclosure numbers today? Your state is leading the nation by a wide margin. Things are going to get much worse before they get any better.
These boom/bust cycles follow a predictable pattern. We all know how this one started so I’ll skip that part. The next phase, which we are in now is the realization that something bad IS really happening. The interesting part of it is even though people see it around them they initially refuse to accept it because that would mean they would get less money for their home.
evenually reality hits them and they have to sell, add to this the banks unloading into this firestorm and you have what I would call the perfect opportunity to buy IF your patient.
Everyday that goes buy you should be out there looking at properties and low balling everyone of them.
The advantage YOU have is that $100,000 sitting in the bank. That money will open many doors for you in this enviroment.
Keep calm, keep looking, and start making offers. If the offer isn’t insulting, it isn’t low enough. If I were you I would read Propertymanagers book on rental properties. It’s excellent, it really gives you the nuts and bolts of the business and has great formulas in it to determine what you should be offering for these homes based on market rents, not market prices. Best $50 you could spend.
WOW! What a great problem to have! I think your best bet is to find Take over payment deals- Do you know what those are? (sorry, it sounds like your new)
Basically what this will do is get you the deed to a house, duplex whatever- and you just “assume” the existing mortgage. No credit check, just take over the payments. Then rent it out. You probably will barely touch your 100K!
Thank you for the wonderful advice, i really appreciate it!! I think I’m going to just what you said… if the offer isnt insulting it isnt low enough… I’ll also order property managers book! Thank you so much for the kind words, I think the one thing that scares me is the only choice i have is out of state far away investments and everyone keeps saying i’m nuts… I dont want to be nuts, i want to be prepared
I have never even thought of that, you are a genius!!! Thank you, i’m going to get prop managers book and look into just that. I think it’s a great area to start, heck, the people i’m taking title from can rent from me :D!
Thanks again and I love kind people like yourselves that come out with ideas and such, it really is awesome having another view on things…
It sounds to me that you are doing a good job of getting educated in the rental property business. Reading the posts on this forum is a good way to get a lot of real-life information. I would also strongly suggest that you join your local REIA. Even if you are planning to invest out-of-state, there are a lot of things you can learn there. When I first started, a very experienced landlord took me under her wing and taught me things about the business that have saved me tens of thousands of dollars. The trick at the REIA is to meet the SUCCESSFUL investors and simply become friends with them. Your new friends will be happy to help you for free.
I would also like to offer a word of caution. By posting that you have $100,000 in the bank, you WILL become the target for every low-life scavanger on the internet. There are people who troll these forums with the sole intent of separating new investors from their money. I would strongly suggest that you do NOT partner or otherwise give money to anyone who contacts you over the internet. YOU are already a target, I guarantee it. Personally, I never partner with anyone anyway, because I’m just greedy enough that I want to keep all the profit for myself!
Once you feel that you have sufficient knowledge to buy something, then I suggest writing a short business plan. The point of the business plan is to determine how you can get where you want to go from where you are now. Work backwards. If your goal is to pickup $1,000,000 in equity in 5 years along with a semi-passive income of $100,000 per year, how will you do that? For example to reach this goal, you could buy 50 rentals with equity of $20,000 each and cash flow of $100 each (plus another $100 each if you do the management and maintenance yourself). At any rate, you get the idea - work backwards. Start with the goal and deterine how to achieve it.
You are a very good position to get started. Just realize that operating rental properties is a LOT of work in the beginning and is not as it appears on TV.