About 4 years ago I became interested in real estate investing. Mostly just as a passing interest at that time but I would go out and look at properties and see if it was a realistic thing for me. That being 06 and around the height of what I would call “insanity” I stood back and said to myself this is not worth doing these properties are not worth this much. Homes were 2k-3k sqft for 500k-1Mil even junky pieces of run down garbage for 250k. I’d watch programs about how easy it was to score sweet deals with no training no money no anything. WOOHOO! cough yea right!
Perhaps I’m just a cheapskate and I dont believe :bs but I found it really hard to justify paying that much money. At the time I didnt know anything about cap rates, ROI, even basic mortgages. I was crazy new but my gut instinct was this is wrong LOL So I continued to rent and save my money.
Then in the fall of 07 I lost my job, my company shut down “fashionable” I know! It would seem now that I was on the leading edge of the recession and one of the first casualties. I felt like such a loser its very difficult I think for a man to lose his job and not be able find work. I didnt start working again until November of 08 :crying2 this was a difficult time for me to say the least. Thankfully my wife was still working and we were able to stay afloat and save a little not as much but we made it happen.
With so much doom and gloom surrounding the country and I felt exceptionally lucky. So last year I really started to dig into real estate and find out what would work for me. I was confident that now was the right time to strike. But I was still crazy nervous about the economy so I took tenative steps towards buying a property it took me a whole year to find the right one and the right price crunching numbers looking at dozens and dozens of places. Finally 3 months ago I bought a 4 plex SCARY! I live in one of the units and I live rent/mortgage free so long as all 3 tenants occupy them which leads me to the next section.
Gurus: I dont trust anyone who is a guru I’ve found after watching most of the proclaimed gurus self or otherwise to be hucksters.
Their main aim is to sell you something. Buy my book, buy my CD, buy this or that. I despise the people who talk in motivational
vaguery. No money down! Follow the system! Climb the mountain! Really? Please STFU pitchmen
Financing: I’ve read plenty of 0% no money down schemes, plots, and plans. How inventive some of them are! While I’m sure there
are real wizards out there who know all the tricks and can sell an icebox to an eskimo. I’d advise against getting too crazy out of
the gate. If you dont have any money and you have bad credit, real estate is probably not for you. I know heresy right? My personal
opinion is HAVE 25% down and then some. Now I know that you should use OPM and that will EXPLODE YOUR WEALTH! Try to remain calm
this is true but its not for me and you we are still new to this. I have only seriously talked to one person who was interested in
REI in a serious way and had money HA! Thats just not me right now I’m going to “stand on my own two feet” as it were. Besides I
feel really good having accomplished the first step in REI I bought a place YEAY!
Landlording: This is up to you really, I can tell you that for me, its a HUGE NO! I’m not handy I know this and I’m happy
with it, I have other skills. I’m a good manager and I manage the management. It took me a year to find the right first place
because 1) I wanted to live there and 2) The deal had to be sweet enough for the cost of a management company to make sense.
I highly doubt I’ll ever become a land lord and every property I look at will have to have that cost built into it. Thats
just my personal preference, and it fits my skill set. If there is one “motivational” tip I can give its know your
strengths and more over KNOW your weaknesses :-o
The AMAZING stories: I dont consider my story too amazing I’d say its about average I purchased a building at just below market rate
and it worked out just right for me to live in one unit while the others pay for the TIPI. I do consider some to be the wrong kind of
amazing. The tales of I bought a 10 unit building for 5k and then DUDE I spent 20k on rehab and now I rent it out for $900 a unit
all of them filled in 3 months and now I cash flow for $8,000 a month! I really hate :BS like this. It makes me sick to my stomach
Maybe it really happend I dont know for certain. But I put that kind of story on par with someone never buying a lottery ticket
then hitting the jackpot. Sure it could happen, it does every day but I try not base my investing strategy on salivating over
some pie in the sky dream. My greatest example for that is my grandmother she has plenty of “systems” for winning the lottery
but shes now 83 and has yet to win. She lives on Social security and…yeah. I love her and her crazy bingo/lottery playing
ways. Its just not a prudent mindset to have in my humble opinion.
Thats about the gist of it I look forward to learning more from all of you and expanding my horizons in ways I had not even
considered before. The more you know the more you dont know right?