Post your real estate investment tips in this thread

[Dildozer]

I'm looking into buying investment property right now. Lemme give you a few reasons why it's good to invest in property:

- Unlike stocks, property can't go suddenly down 0$ in value, unless destroyed, and you should have insurance for that.

- You can buy $100,000 worth of property with only $10,000, try doing that with anything else, your banker will laugh at you.

- Investment property has many advantages:

1 - Amortization due to depreciation = tax deductions
2 - Increased value over time
3 - Increase in cash flow + loan payment from the rents

Imagine you have $10,000 to invest.
Which would you rather do? Invest in $10,000 of stocks on the market or get a loan and buy a $100,000 property?

Now imagine your property goes up in value 5% the first year while your stocks increase by let's say 25%

Your stocks are now worth $12,500 which means a ROI of 25%
Your building is now worth $105,000 which means a ROI of 50% since you invested $10000, so $5000/$10000 = 50%

And on top of everything, we're not even including tax deductions due to amortization and the rents your tenants will pay.

So shoot me some investment tips, i'm all ears

[strobi]

Don't forget you have to pay intrest on your loan, you HAVE to be able to pay your mortage in the next 10-20years and you'll have ALOT of expenses maintaining the house. Real Estate seems like a "even an ass can make money" kind of way, but there are alot of people who failed at investing in real estate. Also if you're married get SOLID legal advice

I wouldn't touch real estate with a pole if you only have 10K$ to invest. Only do realestate if you got ENOUGH liquid money to handle everything that could go wrong.

[hydro]

dont take investment tips from gfy

[Dildozer]

Well your rent's gotta be able to cover the mortgage as well as leave you with some cash to pay for minor repairs and whatnot.

You can't go around buying anything thinking it's all worth it, some will definitely bite you in the ass.

[Dildozer]

Originally posted by hydro
dont take investment tips from gfy

Says a guy with mediatickets in his sig

[ytcracker]

30 year loans are for nurgas

[strobi]

Originally posted by Dildozer
Well your rent's gotta be able to cover the mortgage as well as leave you with some cash to pay for minor repairs and whatnot.

You can't go around buying anything thinking it's all worth it, some will definitely bite you in the ass.

good luck finding those properties. In Belgium (EU) there are no properties where rent outpays mortage. Maybe somewhere else there are.

[Dildozer]

Hmmm yeah was wondering about long or short mortgages.

I guess if it's your own home you wanna get rid of it ASAP. On the other side Interest payments are tax deductible and the longer the mortgage is, the smaller monthly payments should be thus leaving you with more residual cash flow.

[clickhappy]

I wouldn't go into real estate with $10k
After a down payment and closing costs you'd be left with $0 (if youre lucky).
And if the place was vacant for 2 months after that, then you'd be in the hole.

If youre going to do it anyways, start with very small deals and dont bite off more than you can chew. A lot of people lost everything because they got greedy and bit off more than they could chew.

[Dildozer]

Originally posted by strobi
good luck finding those properties. In Belgium (EU) there are no properties where rent outpays mortage. Maybe somewhere else there are.

Are you 100% sure about that? Did you look hard?

[aaron]

Originally posted by Dildozer
Says a guy with mediatickets in his sig

:-x

i agree though if i was interested i would get some books

[strobi]

Originally posted by Dildozer
Are you 100% sure about that? Did you look hard?

Nope not 100% sure. Don't ask advice on GFY Just my experience from looking around a year or so and looking at prices.

[Dildozer]

Originally posted by aaron


:-x

i agree though if i was interested i would get some books

Already reading some thanks

[fudpuck]

Build up.

[Veterans Day]

Originally posted by clickhappy
I wouldn't go into real estate with $10k
After a down payment and closing costs you'd be left with $0 (if youre lucky).
And if the place was vacant for 2 months after that, then you'd be in the hole.

If youre going to do it anyways, start with very small deals and dont bite off more than you can chew. A lot of people lost everything because they got greedy and bit off more than they could chew.

ya right, plenty upon plenty of FHA 3% down or less with seller concessions not including sherrif sales that you catch before the sherriff shows up. 10k is plenty to pick up a decent house that mortgages at 1200 a month and you can rent for 1500-1600 easily. We got 7 investment properties of this exact magnitude. Taking this type of advice from GFY is foolhearted at best. How many investment tips do you want from 18 year olds?

[Dildozer]

Veteran, i'm not looking for the 18yrs old people with tips, i'm looking for real investors who have real tips like Quiet and company.

Don't underestimate GFY, for every 10 morons and sigwhores, there's one sharp puppy.

The 10k was a simple example of leverage.

[LaughingEyes]

The big thing here is buying land and subdividing it. You can get 40 acre parcels for $20K, divide it into 5 acre parcels and sell each parcel for $20K. That's a nice profit margin. I know it doesn't make sense to buy 5 acres for the same price as 40 acres, but I found that alot of people don't want that much property. 2 - 5 acres seems to suit most people. We own 40 acres. We purchased it 3 years ago and it is now worth twice what we paid for it. Found several 40 - 60 acre parcels for $10K - $15K. Considering purchasing a few of those and subdividing them. Since most of these properties are on an OWC basis you avoid banks altogether.

[Dildozer]

hmmm guess most smart investors aren't online, only the sigwhores remain

[Veterans Day]

Originally posted by Dildozer
hmmm guess most smart investors aren't online, only the sigwhores remain

I just told you a perfect example for your 10k, what are you exactly looking for? Me and the wife been in mortgages for 10 years, owning a title company.

[GTS Mark]

I love real estate, just started buying last year and already have 6 rental properties.

Read Rich Dad Poor Dad and thank me later

DH

[DreamCumTrue]

we bought our house for $220,000 in 2002

we sold it yesterday for $390,000

not bad eh?

[Za Ha]

$10,000 is not enough to go into real estate with. You need min of $50,000.

[Keev]

I am thinking of buying vacant lots here in so. cali and building my own custom homes.... 100 -150 for the land, and about 300 to build... Of coarse it could be more or less if you hire a contractor or do some of the work yourself. Total cost around 450k after all is said and done 3000 sq ft custom home, home will be worth 750-800k in the southern california market.

[baddog]

buy low, sell high

[baddog]

Originally posted by Keev
after all is said and done 3000 sq ft custom home, home will be worth 750-800k in the southern california market.

you need to move out of the sticks . . . you could fetch over a million if you did

[baddog]

Originally posted by Veterans Day
ya right, plenty upon plenty of FHA 3% down or less with seller concessions not including sherrif sales that you catch before the sherriff shows up. 10k is plenty to pick up a decent house that mortgages at 1200 a month and you can rent for 1500-1600 easily. We got 7 investment properties of this exact magnitude. Taking this type of advice from GFY is foolhearted at best. How many investment tips do you want from 18 year olds?

Bought my first house using FHA . . . great way to go

[Mike AI]

Originally posted by strobi
Don't forget you have to pay intrest on your loan, you HAVE to be able to pay your mortage in the next 10-20years and you'll have ALOT of expenses maintaining the house. Real Estate seems like a "even an ass can make money" kind of way, but there are alot of people who failed at investing in real estate. Also if you're married get SOLID legal advice

I wouldn't touch real estate with a pole if you only have 10K$ to invest. Only do realestate if you got ENOUGH liquid money to handle everything that could go wrong.

Amen. I bought a building in Tampa recently. I knew it would cost me 35k to build the downstairs out the way I want. Within a week the old AC system went out, and I had to completely replace it - another 50k

I found a tenant for upstairs, so it is going to cost me another 30k to build it out for them to use.

If I had not had cash reserves I would have been screwed. If you are going to try an boot strap a property, borrow more money and include improvements and repairs into the loan.

[Veterans Day]

Originally posted by baddog
Bought my first house using FHA . . . great way to go

the only way to go, taking advantage of FHA money is crucial

[Dildozer]

Originally posted by DrinkingHard
I love real estate, just started buying last year and already have 6 rental properties.

Read Rich Dad Poor Dad and thank me later

DH

Read it, also read Real Estate Riches by Dolf de Roos, not much info but a good eye opener. Reading more specific litterature on rental properties now.

BTW Translate FHA...

Za Ha if you would've read like a good little boy you would've noticed that the 10k is just an example.

[jimmyf]

Originally posted by hydro
dont take investment tips from gfy

I was going 2 forward 60% of my spam email's to him, should be some good tips in there.

[jimmyf]

Originally posted by Dildozer
Says a guy with mediatickets in his sig

I think it's some very good advice.

[slapass]

Take the longest loan you can get. You will never pay it off anyways. You will refinance it and buy more property or sell it before you care.

You will pay too much so you could use the extra cash flow to cover all of the shit you missed.

Hold onto the building for 10 years. Any dumb mistake from buying will be forgotten, and you will have a sizable net worth.

Repeat.

The math on real estate is crazy as far as returns go. Ask anyone who has done it for a while and the answer is try and buy it cheap and hold it.

Good luck.

[slapass]

Originally posted by LaughingEyes
The big thing here is buying land and subdividing it. You can get 40 acre parcels for $20K, divide it into 5 acre parcels and sell each parcel for $20K. That's a nice profit margin. I know it doesn't make sense to buy 5 acres for the same price as 40 acres, but I found that alot of people don't want that much property. 2 - 5 acres seems to suit most people. We own 40 acres. We purchased it 3 years ago and it is now worth twice what we paid for it. Found several 40 - 60 acre parcels for $10K - $15K. Considering purchasing a few of those and subdividing them. Since most of these properties are on an OWC basis you avoid banks altogether.

It is not this easy obviuosly. Good luck but for the new guys this is not the place to start.

[stephanie m.]

location location location

[SlickRick]

best peice of advise I can offer is buy low and sell high.

[sam from montreal]

Originally posted by SlickRick
best peice of advise I can offer is buy low and sell high.

[stephanie m.]

Originally posted by SlickRick
best peice of advise I can offer is buy low and sell high.

yeah that too

and make sure the ground is stable

[HowlingWulf]

I've only seen a few good suggestions, and that's from people who invest. Many others haven't invested in real estate but are shouting advice like they know all. It's funny.

Instead of asking advice on GFY, try another board geared to, gee I dunno, real estate. Here are a couple good ones:

http://www.creonline.com/
http://www.mrlandlord.com/

Enjoy.

[herbal logic]

get in good with an urban planner or a builder who knows one. no joke, im selling my place right now at a 40% gain and i bought it 9 months ago.

[hershie]

I guess a lot of people in this thread are either too young or don't remember the real estate crashes of the early 80's and 90's...where lots of seemingly great properties and developers and ordinary property investors got killed or when interest rates were 20% when it came time to re-finance not too long ago. Don't think that real estate is a sure thing by any stretch and relative to stock investments, there is enough literature out there that will tell you that even a simple home owner would have been better off over any 25 year period in the 20th century putting the down payment on a house, yearly taxes and the difference between rental rate and mortgage into a balance equity mutual fund and would have done better than the home owner who burns their mortgage after the 25 years.

[MattK]

here's a tip: sell now

[Dildozer]

Originally posted by HowlingWulf
I've only seen a few good suggestions, and that's from people who invest. Many others haven't invested in real estate but are shouting advice like they know all. It's funny.

Instead of asking advice on GFY, try another board geared to, gee I dunno, real estate. Here are a couple good ones:

http://www.creonline.com/
http://www.mrlandlord.com/

Enjoy.

Thanks man, you rock!

About the 90's crash, De Roos mentionned buying back then as well, he bought since he took the wager that interest rates would drop. He got some good property for dirt cheap.

[slapass]

Originally posted by hershie
I guess a lot of people in this thread are either too young or don't remember the real estate crashes of the early 80's and 90's...where lots of seemingly great properties and developers and ordinary property investors got killed or when interest rates were 20% when it came time to re-finance not too long ago. Don't think that real estate is a sure thing by any stretch and relative to stock investments, there is enough literature out there that will tell you that even a simple home owner would have been better off over any 25 year period in the 20th century putting the down payment on a house, yearly taxes and the difference between rental rate and mortgage into a balance equity mutual fund and would have done better than the home owner who burns their mortgage after the 25 years.

You have to check your source. I worked in the apartment industry and our lobbiest put this type of shit out all the time. They just pick the best years to use.

[KRL]

Originally posted by hershie
I guess a lot of people in this thread are either too young or don't remember the real estate crashes of the early 80's and 90's...where lots of seemingly great properties and developers and ordinary property investors got killed or when interest rates were 20% when it came time to re-finance not too long ago. Don't think that real estate is a sure thing by any stretch and relative to stock investments, there is enough literature out there that will tell you that even a simple home owner would have been better off over any 25 year period in the 20th century putting the down payment on a house, yearly taxes and the difference between rental rate and mortgage into a balance equity mutual fund and would have done better than the home owner who burns their mortgage after the 25 years.

Yep. Real Estate is a great investment, but not 100% of the time. If you overpay and the market becomes a buyers market, good luck trying to sell.

[Illicit]

Originally posted by strobi
Don't forget you have to pay intrest on your loan, you HAVE to be able to pay your mortage in the next 10-20years and you'll have ALOT of expenses maintaining the house. Real Estate seems like a "even an ass can make money" kind of way, but there are alot of people who failed at investing in real estate. Also if you're married get SOLID legal advice

I wouldn't touch real estate with a pole if you only have 10K$ to invest. Only do realestate if you got ENOUGH liquid money to handle everything that could go wrong.

I'd only touch real estate with $50k down, and a $10k buffer in case somethin goes wrong...

[init]

real estate down by my area rocks, my uncle just bought 4 homes, which are about to start getting built, and my parents want to buy atleast 6, real estate is deff a nice way to get a good roi, buy, hold onto it for 1-2 years, rent it out and then sell

[FlyingIguana]

Originally posted by Dildozer
I'm looking into buying investment property right now. Lemme give you a few reasons why it's good to invest in property:

- Unlike stocks, property can't go suddenly down 0$ in value, unless destroyed, and you should have insurance for that.

- You can buy $100,000 worth of property with only $10,000, try doing that with anything else, your banker will laugh at you.

- Investment property has many advantages:

1 - Amortization due to depreciation = tax deductions
2 - Increased value over time
3 - Increase in cash flow + loan payment from the rents

Imagine you have $10,000 to invest.
Which would you rather do? Invest in $10,000 of stocks on the market or get a loan and buy a $100,000 property?

Now imagine your property goes up in value 5% the first year while your stocks increase by let's say 25%

Your stocks are now worth $12,500 which means a ROI of 25%
Your building is now worth $105,000 which means a ROI of 50% since you invested $10000, so $5000/$10000 = 50%

And on top of everything, we're not even including tax deductions due to amortization and the rents your tenants will pay.

So shoot me some investment tips, i'm all ears

stocks dropping down to zero is where you can make big gains. (ie tasr from 100 to 40- recently, tech bubble of 00, bre x, etc)

so how is it that stocks going down to zero is a bad thing?

one tip i will give is this. we're in a credit bubble caused by negative real interest rates. when it bursts, real estate values will get hit. but, but, but not all markets will drop. so if you're in a market where real estate values are through the roof, it could be very wise to sit on the sidelines and snatch up properties at better values. if you leverage it amplifies returns both ways, so if your property takes a drop your losses are even greater.

[Webby]

Look hard and buy cheap - screw loans or mortgages

Other comment is - don't think the suns shines out of the ass of your locality - the world is a big place and there are still loads of really good real estate deals around - often at prices that would blow your eyeballs out.

I can think of one that over the last year has multiplied the original investment 17.5 times, tho you are not likely to find that dealing with a load of realtors :-)

[FlyingIguana]

Originally posted by Webby
Look hard and buy cheap - screw loans or mortgages

Other comment is - don't think the suns shines out of the ass of your locality - the world is a big place and there are still loads of really good real estate deals around - often at prices that would blow your eyeballs out.

I can think of one that over the last year has multiplied the original investment 17.5 times, tho you are not likely to find that dealing with a load of realtors :-)

for 10k? you'd get some nice shithouses for that

[Webby]

FlyingIguana:

for 10k? you'd get some nice shithouses for that

Ah! I missed that bit!!! Mmmm.. Na..

Kinda at the low level! :-)