I basically have two questions I’m hoping the experienced investors and anyone with some suggestions can help me with.
First off, after reading the posts it seems that the best way to get started is with the purchase of MY first primary home (“owner-occupied”) being 23 i figure the best move is to go for a duplex to have the house pay for itself and create a small amount of income. After reading into many of the techniques for investing should i look for a “pretty” house to live in using conventional financing standards (i’ve been approved for 100% financing on a 30yr) or try to incorporate investing strategies (ie: lease option, option, seller financing, etc…)? i been the tax benefits may be better with the conventional and the first time hombuyer situations, but please correct me if i’m wrong!
Secondly, i’ve been reading through numerous materials and think i’m about ready to “just go for it” and start making offers. does anyone have any prior experiences or stories on what to look out for,avoid, or focus on when finding and making that first deal work? I’ve seen a wealth of information on this forum so i’m hoping that the experienced investors can give me a “heads up”. Thanks everyone!
Before you start making offers, it’s important to have an exit strategy. Do you plan to hold on to your properties and set up a positive cash flow, or just flip them. I recommend holding.
Once you have determined that, study the different methods of holding properties. Be careful of using a lease option because the tenant’s “equitable interest” can make your experience an unpleasant one in the event of default.
Once you have a clear road map of your plan, just do it. Good luck.
Thank you very much for the info, i actually had been reading alot into the idea of a lease option but hadn’t thought of the “equitable interest” side of it from the tenant. i’m assuming as far as holding that would put me somewhat into the property management side of things right? i have no problem with that at all, but my question at that point is how to approach my SECOND deal? i’m a bit confused as to how people hold their first “investment” property and go about purchasing a second without a “cash-reserve” just in case. or do i have the wrong way of thinking?
in my opinion, you shoudl employ the KISS principle; especially in the beginning (keep it simple stupid). For buying your own place, do a standard ,stright forward deal with a conventional bank loan if you qualify that way (its the easiest money you will ever borrow). Use more advanced technques (such as lease option) as the situation dictates and you gain experience, but for every technique, there are associated risk and pitfalls.
As for investing, “just diving in” is probably the WORST way to go. As suggest,ed you need to focus on a technqiue and thus an exit stragety. There are thousand of properties out there to buy, but very few are good investments. In fact in my experience, most stuff adversited as “good investment properties” are just losers that no one else will buy. Find the right investment property will require research and possibly the help of a good, experienced agent. Many of my top performing deals to date have come though agents give me the tip; in many cases, they never even made to the MLS before I had them under contract. The reason being as I moved very fast as I was able to spot right away they were a great deal for my investment style (hint, hint, know your market!)
Just a note from experience and not exageration I look at probably 1000 homes a day on the internet and bid on maybe 2 a week and get about 1 every 2-3 months .
I agree. I’ma part-time REI guy. I probably look at at least 50 deals for every one that I close. Sometime I go 6 months between deals. I use to say 30 looks for one deal, but the last 2 years, every body thinks their dirt heap is some kind of million dollar palace.
I just spend time on due diligence on a commerical property going to auction. I determine it was worth $15k at best (it was a real junk heap). Somebody paid $38k which is probably close to FMV. Hope it works for them. Since my agent was the only one that showed up at the preview, I know they bought it sight-unseen. :o
since this will be your first home, you can use an fha loan, which has lower closing costs than other conventional loans. depending on what state you live in, there may be a loan program funded by the state that may have even better terms than FHA. for example, here in Michigan, there is MSHDA.
See I did it different I would submit offer after offer after offer. Of course I had over 80 investors to buy what I did not… I never looked at a house I just submitted offers. 20-30% below there asking price… This is sales it is nothing more then a number game the more offers you submit the more houses you will buy. At my high point I had over 70 houses I am now down to 14 and I carry the second mortgage on all of the properties that I sold. With little luck I will be down to 1 by the end of the month (MINE) and a income of 25-30k a month.
I am now 31 and live in a quite little town in the Rocky Mountains in Colorado and go fishing and four wheeling when I want. Spend at least 10 hours a day with my kids and type on here once in awhile.
Look at the bottom line and if I can find the link I will attach it later…
with the way the United States is right now they say that in another 10 years 90% of our jobs will be outsourced to other countries and/or will be done by foreign workers and the number of people on government assistance will be astronomical. Now I have no idea how acurate that is I think those numbers are a little high but not to far off.
Make as much as you can as fast as you can. What is the best way to do that?
OFFER ON EVERYTHING!!
You never know what is going on in someone’s life I just bought a house up the street for 112k appraised at 195k simply because the guy was getting a divorce and wanted to by a fishing boat and go to Alaska.
He needed out I got in
Now what to do with that property I will sell it for 195k run ads everybody qualifies W.A.D. (with applied down) get someone with no credit a 80% loan so they get a loan for 156k I carry the 2nd for 39k at 13.00% interest and make another 310.00 per month or sale the note for 25-30k if I ever need the money. And walk with 44k minus closing costs in my pocket. And 90% of Americans that think they can’t buy a house CAN!! Just need owner financing.
Here is the deal. Deals are everywhere and I mean everywhere. JUST LOOK…
I just moved here a month ago and planned on never doing another Deal. Now look I got another 44k and a note in my pocket…
There are specific steps to take when investing. You may have to act fast to make an offer on a desirable property but you can’t just dive in.
Some people make the steps look easy or have a system they follow. You have to take the time to do it right. Even then there could be unforseen problems but at least you are ahead of the game
I used to fill out 8 forms to analyze a deal, neighborhood, rental market, property analysis,repair/rehab costs, cash flow, etc.
Now that I have the experience, I can fill in those forms in my head while standing in a property, make an offer and write out a purchase contract right there in the kitchen counter of the property.
You have to do the legwork. Now if you don’t know what that leg work is… then you come here and ask.
Yep they are, you should check out some credit card APR’s that some consumers are paying every month. Also I saw in the news that those payday loan companies in Washington was charging consumers 500% + Apr. A New law will be in place to minimize those charges.
