that’s part of the problem, i don’t really have a niche. the reason is because i don’t even know what to belive. for instance, i originally thought it would have been foreclosures. after reading about them forever, going to auctions, mailing preforeclosures, i never felt comfortable to take a step. in retrospect, it was really, really good i didn’t (prices are now dropping where i live. not too badly, but people’s houses are on market way, way longer, to the point they have to discount them to move. very glad i didn’t buy around here). basically i didn’t feel i knew enough to do what the gurus stuff told me. in their examples, the numbers work (well, i did find some where there were gross omissions that they really didn’t work, but whatever). however, they don’t really go in depth to teach you about what you really need to know, like how to read a local market, or how to see flaws in a property. so i put the marketing on hold (that was last summer), and have been studying since then.
that book i posted has been very refreshing. it is a very technical, college textbook. i’m not even done yet, and as soon as i got a few chapters down i felt dumb for having wanted to take on such huge responsibility with the insanely small amount of knowledge i had.
why florida? i always thought it was the cheapest. as i said, i wanted to do a 203b or 203k, so my 20-25k will either be a good down payment on something closer to 400K, or i will get somethign cheaper, adn try to hold some of the money in my pocket. I kind of have a need (a fiance) to be near teh ocean. if i could make a killing in idaho or wherever midamerica, i’d check it out, but as far as i’ve ever heard, florida is cheap. my mom lives there and her rent is extremely cheap compared to where i am, so i figured (again, without really understanding more, the best i really went on was that common knowledge says florida is cheap) florida would be the best place.
niche? my studies have really covered all of them. being that i am now realizing that stuff like ‘conventional loan plus seller taking a second’, or whatever, are not really hugely reliable, i wnat to go more conventional. why? because when january arrives, and my fiance, my brother and myself load up the uhaul(s), and head down to florida, i don’t want to be chasing a dream. i don’t want to go through half of our cash reserves waiting a year before i find someone who will do full seller financing or something. i want something more solid. as i said, i’m an amateur. not even an amateur, i’m just a hack. i’ve studied, i’ve tried, failed, then went back to studying. i don’t care, i actually am more into it now than i was before, but i have a responsibility for other people here. if things woudl be better doing creative tricks, but the likelihood is much less, i can’t risk that. unfortunately i don’t think i know enough right now to decide what is likely to work and what isn’t. sooooo, i decided on this approach:
-decide on my area of florida by choosing whether i want to have cash flow, or whether i want the building (4 unit building here, max units for a residential, way low% down) to appreciate over the year i’m there. if it cash flows, i work on it to make it flow harder. if it is in an appreciating market, i do what i can to make it better. those last two sentences are thigns that i have in mind while searchign, i’m not planning on paying retail and thinking a paint job will spike the value or somethign.
-sell property for a profit, buy another.
-continue on until i can get where i want to go, large unit# commercial (apartments, specifically)
i figure that this approach should be able to yield good cash if done properly, and should be a pretty reliable approach. something where i can assume that after a month or two of hard searching in FL, i can find something for a good discount, or something that needs some repair (in which case i’d go for 203k. i was also thinking it may be profitable, zoning permitting, to use a 203k to convert a 3 unit to a 4 unit, who knows).
this approach seems to make good use of the considerations in my situation:
- 3 kids with low % down, only 1 of which understands anything about real estate
- 2 co-signers with ficos of 740 and up
- 2 co-signers who, if needed, can transfer their jobs at 30K/year (individually) to florida
- 1 kid with responsibility to the other two that they don’t waste their time chasing a dream that the kid in charge was sure woudl work, then found out hte hard way that finding an assumable mortgage is near impossible, or something like that (not saying they are, just saying i don’t feel comfortable with ‘creative’ strategies, as i feel that with no experience i cannot properly evaluate them as well, so i am seriously risking putting our lives on a path that is just not gonig to work out.
again, i’m a dreamer, but very real and down to earth about what must be done. my goal in life is to be very, very big time in real estate. i know how much work will be required, but if you read my original post you’ll see that i am the kind of person who does what is necessary to get what he wants. i’ve always had way more than my peers, because i work much harder and longer than anyone else. i am ready to do whatever is necessary to make my first investment work out well, even if it means trying to convince my brother and my fiance to go somewhere besides FL. I guess i’m just really confused about what works reliably and what doesn’t, and really don’t want to waste a year or two learning that i was doing dumb techniques, outdated techniques, or techniques that didn’t even apply in my market. the work, the learning, all of that is fine, i just want to learn more and almost everythign i find seems to be the same old ‘lease option’ or seller financing or whatever creative approach. there just has to be more reliable ways to make cash. i know this is investment, and i am starting with only 20K roughly, so i can’t expect i’m gonna make hundreds of thousands off my first investment or anything, but ideally we would
-find our area
-find a great property that needed major - major/minor rehab (major we would use an HUD 203k loan, minor we’d do ourselves as our jobs)
-live in 2 of the 4 units for a year
-sell for a profit, then repeat the process with the profit money, which necessitates, that we make considerably more on teh tail end than we had going in. say i come out with 60 or 80K on the other end, then that is just a down payment on a new 4 unit (well, if it were really something like 80K that would probably become a down payment on a commercial loan for a junky 10 unit or something, who knows)
i just don’t want to waste my time learning useless or near useless techniques that i may be able to make use of once in my career. i need to know what some very solid ways to start are. my best plan of attack now is to determine area for best growth/flow/whatever, then find an undervalued property, buy it and fix it/do something profitable (like making a 3 unit a 4 unit), then sell and use profit to repeat. my brother is a slacker but has great technical knowledge for some cabinet/carpentry type stuff. my fiance and i are both the kind of kids who worked full time all through difficult college degrees, and were even athletic as well. i was actually a full time manager, full time semi-senior in econ, vice president of my uni’s wrestling team, and running a small business simultaneously. hard work is fine, i just want the work to be done in a way that i will be more likely to profit from.
so sorry i keep making this so long. i guess i really want to make the point that i am not like the average poster on here who seems like they saw a sheets’ commercial, and are acting like they’re all about investing, and will probably fizzle out in a few months. i (really) have a mini collection of we buy houses signs that i take from the main strip near me, since there’s always a newbie who will put htem up for a few months and disappear (like me last summer!). i want to make it clear that i have intentionally burned my bridges. real estate investing will be my life. i have an econ degree but have never done an internship or even talked to my advisor about a job. in fact i don’t even really like economics. i’ve been entrepreneurially oriented my whole life. i will be in this for the long haul, so i’m looking for what is tried and true, what is reliable, and not just what ‘could’ work if i happened to be in exactly teh right place at the right time.
(i feel so bad for writing so much… i’m also a personal trainer (haha that was another small business i had before becoming a manager of my retail store)…you have been very gracious reading my essays and providing very useful responses.)