I have been reading this site now for months and only recently put a profile together. During this time I have continued to educate myself on RE Investing. While I’m no stranger to it (used to be a Mtgbrkr, worked in RE appraisals, even did title settlements and if it really counts used to have a RE License - just never used it. Not sure now after reading the posts if I should even bother getting it back again just to do investing. LOL With all that background I do feel a bit overwhelmed with all there is to learn, now that I’m coming from an entirely different angle in Real Estate.
My question is this, without forking over a kings ransom to a "Guru” claiming to know it all, ( I loved that post!) is there any other way to learn the subtial nuances to investing? How did some of you get started? How long after you knew you could even do this did you close? How did you get comps so you could calculate your the values, ROI, decided your exit strategy, or more importantly decide to walk away altogether? Did you get funding by traditional lenders, fund yourself, or use a combination of techniques? Any additional insights, nuggets, suggestions that haven’t already been posted (I’m sure I read them already! LOL) from the distinguished panel in here (you know who you are) would be greatly appreciated.
Sign me shoulda coulda done this years ago! Better late than never right? LOL
I’ve learned a ton from this site, but that was several months after having operated a small apartment building. So my experience base comes from actually having done it as well as what I’ve learned here. I didn’t know anything about a 50% rule when my wife and I purchased our first building. I did have enough common sense to do a good estimate of ongoing monthly expenses as well as rehab cost. Most people would never ever give you the advice of jumping right into a commercial building, but I knew we could do something good with it. Our building is in such a small town that there really aren’t any comps for it. We just had to look at rental income vs expenses and make an educated decision on it. That deal was our credit card deal (explained in the other current newbie thread). We needed 25% down for that deal. We weren’t on the fence as many people are. As soon as we knew the numbers worked and we could get financing, we put it under contract. As our portfolio has grown and we’ve gained experience, we’ve been able to get much better financing. Most of our deals now are no money down.
This stuff isn’t terribly hard or highly technical. People run into problems when they think any house on the market is an “investment.” How many people have you talked to before who say they have a rental house and their rent ALMOST covers their mortgage? I’ve met TONS. These people are losing tons of money, but thinking they’ve got an “investment.” People are willing to pay several hundred dollars a month to have some renter pay down their mortgage over time. In the end, they’ve spent a ton of money over the years to think they were doing the right thing. Don’t ever buy an alligator or hope for price appreciation.
Yeah I learned a lot about kicking dead horses while in the mortgage industry. Some deals just aren’t worth it no matter how many times you try to justify them or spend time makng the numbers work. Numbers do not lie they are what they are and if you do them right they should be what helps you decide in the end. I’ve seen some really sad looking properties being pushed by would be investors who bought them thinking because they were in a bustly neighborhood they were worth resale as a renovation. When in fact they were totally obsolete and only good for the wreaking ball!
My biggest fear is not finding adequate comps without them as you well know your left to your gut to figure this out. In your case it worked and thats great for you and your wife, but in RE thats more the exception than the rule. There are times when this can be a very emotional business even for a seasoned professional.