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Your first income property....
- Thread starter beastboy
- Start date
bran987
New member
ok, I need 1 more piece of information before I give you my recommendation 
I'm going to make a post about this soon, but
if you could classify your area as one of these 3, which would you say it is:
1) a low price area that pretty much stays low
2) a relatievly low price area that is appreciating fairly quickly
3) an expensive area
I'm going to make a post about this soon, but
if you could classify your area as one of these 3, which would you say it is:
1) a low price area that pretty much stays low
2) a relatievly low price area that is appreciating fairly quickly
3) an expensive area
Real estate investing, especialy if you are trying to 'flip' something, is all about leverage.
How little money can you risk and still get an upside? This is the key question.
I have always lived by the simplistic mantra: worst house best neighborhood.
This gives you leverage if you want to flip or rent, etc.
How little money can you risk and still get an upside? This is the key question.
I have always lived by the simplistic mantra: worst house best neighborhood.
This gives you leverage if you want to flip or rent, etc.
You might try to work a deal out with those who will be repairing/restoring the house in which you agree to pay them little or nothing until after the house is sold. Problem with this is if the house doesnt sell, they can put a "Mechanic's Lien" on your property to get their money.
I plan to eventually flip a house every 4-8 months. I wont have time to do repairs myself once I get to point where I'm in a position to flip houses because I will have other business matters to attend to.
Right now I'm trying to find backers for a business I've just started. As it now stands, I can keep my business online and at a very, very low overhead cost. However with a rented office space and additional business equipment ($12-18k) the business could explode into the 6-figures range. But alas, I dont have cash like this just sitting around and thats a lot of cash to hustle up. I've got a wealthy relative who maybe willing to invest.
Get on Kazaa Lite and do a search for .pdf files. There are some good ones on Real Estate. You can get Kazaa Lite K++ from http://www.oldversion.com/
I plan to eventually flip a house every 4-8 months. I wont have time to do repairs myself once I get to point where I'm in a position to flip houses because I will have other business matters to attend to.
Right now I'm trying to find backers for a business I've just started. As it now stands, I can keep my business online and at a very, very low overhead cost. However with a rented office space and additional business equipment ($12-18k) the business could explode into the 6-figures range. But alas, I dont have cash like this just sitting around and thats a lot of cash to hustle up. I've got a wealthy relative who maybe willing to invest.
Get on Kazaa Lite and do a search for .pdf files. There are some good ones on Real Estate. You can get Kazaa Lite K++ from http://www.oldversion.com/
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beastboy said:
I bought a house in FL for $580K. I borrowed everything from the bank. I have had offers for $1.4M.
If I sold it I would be up $800K, and I only put about $50K into it. So I have a 16:1 return.
Suppose I had put 20% down ($120K) plus owned it at a cost of $50K = 170K. The return would be more like 4:1.
Leverage = upside based on how much capital you have to tie up.
bran987
New member
beastboy said:
it depends how you like to work
I had a friend doing it with me for a little while but he lost interest
when you're sitting at home for hours writing 20 offers in one night trying to pick up a property in your target area for 65 cents on the dollar, and you know you're going to have to write 100 of these to get maybe 1 accepted and deal with angry realtors pissed off at you for writing them all these low ball offers hehehe
I mean, it's kind of nice to have someone there to keep perspective
also if you have a weakness in one area it can be good to find someone who complements your abilities
as to your first question, if you have all price areas around you, the most important thing to remember when you're doing your first deal is make it a good one. that means make sure you are making money when you buy. obviously on a quick cash flip you have to make money on the buy, but even in buy and hold most of the money you are going to make comes on the buy as well. why? it is a lot easier to make a $100,000 cash flow for you if you paid $70,000 rather than $90,000.
I would pick a house 10-20% below median price range in a regular average joe neighborhood. they sell or rent the fastest because you have the biggest range of qualified renters/buyers.
don't listen to people who tell you that you'll never find a seller to give up a house for that price either. they either have no persistence or are just trying to discourage you because they have small minds.
oh, and remember, ugly is good
you will get an amazing deal on the house regular families never want to buy. it is amazing what a thorough cleaning, paint & carpet can do to a home!
bran987
New member
beastboy I also heard from somebody (getting more info on this) that there is some way you can buy a 4-plex and live in one unit and have it still count as a single-family home and get all these credits.
I think you are married with kids so this might not work (?) nevertheless, living in a duplex or 3 or 4 plex and renting out the other units is a good way to get started too. let's you get the hang of it all and be there on site
*EDIT
thinking about it more, I really wish I hadn't sold the stuff I used to own. don't sell just because you get an offer and see a capital gain there. have a better reason.
I think you are married with kids so this might not work (?) nevertheless, living in a duplex or 3 or 4 plex and renting out the other units is a good way to get started too. let's you get the hang of it all and be there on site
*EDIT
thinking about it more, I really wish I hadn't sold the stuff I used to own. don't sell just because you get an offer and see a capital gain there. have a better reason.
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season7445
New member
Probably is really nice. But there are shit holes selling in tampa fpr $200K and up.
season7445 said:
It is really nice, thanks. i am putting in another $750k or so...maybe more with the recent increases in the price of construction materials. Average sale price for the area is about $2.5M.
BeefyBull,
I need a place to live. The market here is funny - they just keep building - and the house is in the most exclusive part of the city. Assuming only minor interest rate changes, I will be in the house for approx $1.3M.
I can probably get $2.5M for it. SO the upside remains.
Additionally, jax is hosting the super bowl in Feb. With some proper media coverage, we might get some relocation here, and a seniro exec might pay $3.5 if he is moving from CA or NY. (Happened to a few other homeowners.)
This area is where some of the CEOs in the city live (CSX, St Joe's Corp, etc), so my street will play a large role in the 'selling' of the city to visiting corporate sponsor execs.
So I am holding off for now.
