Hello, my name is Mouse-House. This is my first posting. To stat, a little about me:
-I am a toal rookie.
-I have never owned a home.
-I have very little money and I don’t make a lot from my job.
-I have just a few thousand bucks in the bank.
-Brace yourself, I filed for chapter 7 bankruptcy a couple of months ago.
-To make my situation even more difficult, I live in Silicon Valley, not exactly a cheap area.
-I’m 29 years old.
Although I just filed for bankruptcy, I had been fighting very hard to try and pay-off my credit cards for years, until my car broke down. That was the end of the line. I had to get another car and file or stop showing-up to my low paying, yet steady job of 8 years. I’m not bitchin’ and complaing and I don’t want your sympathy. I just want want realistic answers to the question I’m about to ask.
Buying income propery in San Jose or even in California (because of the prices) seems like an unrealistic goal. But, does anyone think a person in my situation could get into a situation to pull a positive cash flow from a property in say Texas or Arizona? Does anyone think I’m dreamin’ and think I should think of another way to make some bucks? Go ahead. Give it to me straight!
I do know you area. It is like my area, San Diego. People are buying fixers at full retail. Houses get bid up above asking. (I know San Jose is a bit different due to the dot com fall-out, but housing is still insane.) Sure there are people finding deals here, but they have the funds to advertise over long periods of time.
I spent money on mailings and got nothing to speak of. I have started looking outside of Calif. I bought a fixer in Illinios. Long story, but it will be sold shortly. For doing very little except providing funds, I will make a nice profit. It is very hard not being in the town where you want to invest. You need to have people you trust… a lot!
If I was single, I would consider moving to a town where I could work and study real estate. Most other places in the US are far easier to practice creative RE investing.
If you want to fund deals… Just let me know… there are definitely plenty here…
But, in Texas we have our problems as well…
Builders still building… offering 100%
foreclosure rate high
Rents going down because the folks that can afford it ahve moved into new houses…
Lots of vacant property everywhere…
And the Taxes and insurance combined run about 3-4% a year…
Which can kill cashfow even with 7% and below loans on property…
But, if you understand what you are doing you can still make money…
And if folks are buying fixers at full retail… I want to know where… I’ll everything I got… If houses are getting bid up past asking… I want to know where…
It ain’t in the Dallas Area… I just sat on a beautiful house for 15 months…
And have had an average of 8 plus vacancies per month for over a year…
I think you need to read my post again. I am referring to California. Have you purchased in California in the last year? If you have you would be agreeing with me.
Of course it is all geographic. That is why you can not apply your Texas real estate experience in California. I would love to be in Austin buying property. And I might take you up on buying property from you if you didn’t seem so grumpy!
I am serious about the property buying. If I can buy in Illinios, I can buy in Texas!
I do exactly what you are proposing to do. I buy RE in Texas, Arizona, and California. I do it full time. What you are trying to do is very difficult with two things, time & money. I am not trying to say it can’t be done. I am just saying that you will need to figure out how to manage your business from a distance with very limited financial means. Why not consider moving to an area that is more affordable & ripe for investing. Your chances for success with be much greater given your current situation. Just my opinion.
Mouse House -
I think that you can buy for little or no money down anywhere in this country - including LA or SanDeigo, BUT, you also should consider the post above - if you are single - consider moving where you can get tied in and start with something less risky - ie Phoenix -great appreciation now, but lower end…I think it is a great place to invest. I have many students buying there with little or no money down and making huge profits…you said your job wasn’t that good anyway - MOVE!!! If you don’t want to or can’t move then get involved with as much training up there as possible…anytime you can go to a conference or seminar - do it…do the less expensive ones first - the $99 or less for a day of training - NOT selling - training. Read as much as you can about investing…Peter and David give away their book on little or no money down - it is really a good book! Take advantage of that. I used to give it away as part of my course. Good luck,
Thank you David Alexander for sharing some truth about owning real estate. It is very Difficult (at times) buying 1-2 family properties and making money at it consistently. I, too, have had over 120 properties (1-2 families). You really have to understand your market place and the areas to stay away from.
I think being in mortgage/finance for the past 25 yrs helps, but I think it is rare to be able to find good “small property” out-of-state and make a living at it.
To do that, we need a “network partnership” across various states. I become aware of property all the time for in WI, IL, MI, but without a partnership with a local investor, I would not go out of my WI back yard.
We all can buy Property with no money down–the KEY is selling it for a profit–consistently.
Yes, you can purchase properties anywhere at anytime, for the right deal.
I personally have not purchased out of state, I kind of stick with the markets that I’m most familiar with.
I do contract for deeds, with no money down, no closing costs, except for the $20.00 recording fee, other than that, I’ve purchased some of my rental properties at the lower than market rates in the beginning, looking at the days on market.
Killeen Texas was listed as the 2nd lowest housing costs in the US a couple years ago. There’s plenty of deals to be made there.
I’m also a beginning investor in San Diego, CA. It’s frigging ridiculous out here unless you bought a few years ago to get anything decent out here. I’m an appraiser and never seen anything like it. My wife and I just got back from visiting family in Texas and are probably moving out there within a few months. The opportunities we saw were ENDLESS!!! Things we could never do out here, so I agree with all these other folks that if you are serious, consider getting the hell out of Cali and making a better life somewhere else.
My Mother used to live in Chula Vista, and when she put her Condo on the market, she had an over priced offer in 1 day of being listed. It’s really crazy! I got her involved in the RE Investing, and she had to purchase her properties in Iowa, where she wanted to move to. There’s no way she could have done what she wanted to do in S. California.
I still think that Texas is where the market is, but I’m kind of biased in my opinion.
I am new to this board but have been investing a while in St. Louis, MO even though I live in San Jose, CA. It’s not hard to manage rentals if you get the right tenants and provide them with a decent place to live. I am interested in hearing from anyone with experience buying at tax sales, especially in California.
Haveing a new BK is tough. But they’re lenders out there who will lend. My advice is to buy a house or condo to live in and don’t get discuraged when trying to get preaproved for a loan. Or you could always find a seller how who will provide seller financing.
if you just filled for bankrupcy, u probably wont qualify for a loan for anything.
you need to do a couple of things.
spend 40 hrs/week reading ALL the RE books at the local
barnes and nobles. attend ALL the local RE club meetings and
NETWORK your behind off.
GET ANOTHER JOB and start saving money. if you arent
a single parent you should be working 80 hrs a week if you
can’t save money on one job.
try moving to a cheaper place.
in 2 yrs a few things will happen.
you’ll be so tired you wont have time to complain
you’ll get an equivalent of a Masters Degree in RE investing.
you’ll have a 2 yr old bankrupcy.
you’ll have saved some money from ur 2nd job.
you’ll have met some rich investors to mentor you and
help you out.
when the foreclosures rise in 2 yrs, you’ll know how to
take advantage of it and make a killing.
