I’d like to thank everyone here on this board as I have learned more than I ever could reading this than reading a book or even going to a class. I’m looking to get advice and would appreciate anyones help. I’ve been looking in a few markets for the past few years to invest in but everytime I think about buying, I end up with cold feet and the market turns hot and then stablizes (IE: sacramento, vegas, arizona). Now, I’m looking at Texas & Ohio as a possibility and have been thinking about it for the past couple of months and ready to jump in w/o looking back. I have enough liquid cash to purchase 3 houses in full in either market. But, I was wondering if that was wise to do. What would be the pros and cons to doing that or maybe looking into getting more houses (maybe 5) and not paying full. Obviously, if I paid full, I would have only property taxes left to pay yearly and if I split, I would prolly have more liquid cash on hand. But, are there any other benefits to doing either that anyone can suggest?
i haven’t looked at ohio but i did look at texas.
i didn’t like texas becuase taxes are very high - 3%
insurance rates are also high - about 1.5%
these things kill your cashflow.
i prefer SLC. the market just started turning this year.
i can send more info if you email me.
Howdy Littlenicky:
Leverage is what it is about. If you have $500K and buy 3 houses and the value goes up 10% that is $50K per year but great cash flow.
With 10% down you can buy $5M in property and with the same appreciation have $500K equity with break even cash flow.
With zero down and excellent credit and $500K wow.
You can also buy for cash and fix and refinance and do many deals with great upside and equity growth. Killeen Texas for example is the most undervalued property in the country.
I am buying distressed buildings and rehabbing them and selling or refinancing. You can do this too and a heck of a lot easier than I am with cash. I have a 30,000 foot building that I am doing for $165K and will spend $200K rehab and it will be worth $700K after lease up. Do them kinda deals anywhere even in the great state of Texas.
ted is spot on the money. the beauty of real estate is leverage.
read ‘value investing in real estate’ by eldred. its one of the best
books $16.95 can buy!