Hi all,
I love your forum, it has given me a lot of great info over the past year. I am very excited about REI and have read many of the big sources - Sheets, Hicks, and all Kiyosaki books. I have just done a career change out of the military and am settling in, and I have the “blank page” syndrome - so many opportunities I dont know where to start. If any of you have pity, please give me some ideas. Here are my local market and personal stats:
Me - new job - pays about $90,000 per year
Wife - starting out as real estate agent.
About $60,000 cash to play with
A VA loan we haven;t used yet.
Lots of opportunity for sweat equity.
Excellent credit rating
The market - softening a lot but still somewhat high priced - 50-100k price reductions all over the place
Fix-em-uppers available in places my wife and I would consider living for 330k and up
Many duplexes and triplexes my wife and I would live in from $330k up
Some example income properties - a $335k duplex that gets 2150 total rents - A 470K duplex that gets 3000 total monthly and a $570 duplex that gets 3300 monthly rents
There are also duplexes available for as low as 250k that get 2000 per month total, but in areas we wouldn’t live in. We would consider buying them as investments.
If anyone wants to know, my market is in the NE.
So my dilemna is, what is my best first move. My wife and I need somewhere to live, so we would either need to get a more expensive duplex or would get another place and buy a cheaper duplex.
Please don’t misunderstand my post. I have read and understand much about the market, including how to run the numbers, negotiate, and manage the property. I was just hoping that someone wiht some valuable experience could lend their insight into the quickest way to make an impact. Pyramid? Start big? Flip a few first? As clarification, as well, my wife and I don’t need cashflow yet, and would probably reinvest as much as possible. I hope that this post may bring out some good discussions that could be useful to many. I think that my particular situation may reflect many others out there, and I would love any help that anyone could give. Thanks.
Old fashion model - buy low, fix it up, wait 2 years for the captial gains tax to expire, then make your next move. Meanwhile you could have a HELOC to gain money for the next one, or after the 2 years sell if the market has appreciated… If you have the means, buy two. One to live in, one as an investment. Know your market! Go to open houses - talk to people. Buy low, it’s hard to fail if you do that.
Good luck!
It sounds like you have done a lot of research in your area. Have you considered joining a REI club in your area? What part of RE do you have an interest in? You mentioned rehab and rentals, what about foreclosures. You may want to decide on an area of RE that interests you first, then pursue it. Network with the REI club in your area. There you will meet with others and can find out what is working for them in your market.
Thanks for the help guys. Good things to think about. I think my feeling is that we would rather buy and hold, particularly because we want to move faster than every 2 years. There are no particular REI’s anywhere near my part of the state. Haven’t thougt about foreclosures, would you recommend that as a first step? I was also under the impression that that is something best done with large amounts of cash. Also, is there a reputable source to get the lists? It seems to me that maybe foreclosures have become a little crowded and buzz-worded. If I am going to spend money on a list I don’t want to be had. What are your thoughts?
Why buy a list. Market yourself. Put the word out that you are interested in helping them keep their home. You are already finding investment deals in your area, just focus some of your energy more toward homeowners.
From your first post, it seems that you have some financial means to work with. You don’t have to limit yourself to just purchasing investments. You can also help others. Who says that you only have to do one thing in RE. There is an old saying: “Never keep all your eggs in one basket.”