New Guy Here...
If you guys wouldn't mind for those of you that are seasoned investors, I'd like for you to share how you got started in this venture. Please be as detailed as you wish, I love reading about this stuff. So, long posts won't bother me.
Basically, my long-term goals are to have real estate investing be my career. I'd love to have that be my job, so, I understand that cash-flow will be of utmost importance if that's to be the case.
However, I don't have a great deal of money (none, actually) to place for a down payment on a residence. I really like the idea of single-family homes to start out with (and looking into apartments, condos once I get a few properties under my belt).
So, just how did you get started? I've read countless books and I'm fighting paralysis by analysis right now...
Just would like to hear about those first steps from folks that have done it.
*boom, boom, boom*
Is this thing on? Herro?
I'm not a seasoned vet, but I just wanted to say that I disagree with "Russ from Direct Funding Co." The market and financing determine EVERYTHING when it comes to REI. There is no reason you shouldn't get a Single Family Residence if the price is right.
Listen to Kiyosaki: You make your money when you buy the house, not when you sell it.
If you can get a SFR for under market value and finance it right you can make positive cash flow. Build a relationship with your mortgage broker and he/she can show you some amazing financing options.
I know a very rich man who invests ONLY in SFR. He buys them at the right price, in the right place, and has them managed properly.
There are too many options in REI to rule out any. You have to find out what kind of a niche you want to be in. Do your research, read as many books as you can, network with as many people as you can, but ultimately you have to be comfortable with what direction to go.
Happy Holidays,
Aaron H
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Depends on where you are located. I live in an appreciating area of California.
Buy single family homes. Seller's motovation is different than yours. Get Seller carrybacks, low interest rates, easy payments, due in 3-5 years.
You can get in for little, the financing cost is low, can get 1% or less ARMs. They will go up.. but what is the property going to be worth, when the financing interest rate (& Payments) go up??? The longer the rates stay down the longer you can hold the property & raise the rents.
Buy nice single family homes if your area is going up in value (appreciating)
You didn't mention your finances.... If you are paying taxes, you can afford a little Neg cashflow.
Read my first book on investing in April, got HELOC, partnered with someone, formed a company and now have 25 rental units. Closed on our first property in June of this year. Any mistakes? Not asking for a percentage back on our early deals and not being more creative with financing. I would suggest you spend more time calling people than reading if you have already read a bunch of books.
Good Luck
[addsig]
Oh yeah, buy single family homes, they appreciate the best. Not saying to focus solely on SFR's but you're shooting yourself in the head (not the foot) if you take these out of your arsenal.
And as a beginner unless you have deep pockets, don't get anything that is negative cashflow, and if you do have deep pockets, I would still try hard not to buy neg cashflow.
[addsig]
wow
You must have loads of cash to have already purchased 25 rentals, bro.
Quote:
On 2004-12-15 18:28, ray_higdon wrote:
Read my first book on investing in April, got HELOC, partnered with someone, formed a company and now have 25 rental units. Closed on our first property in June of this year. Any mistakes? Not asking for a percentage back on our early deals and not being more creative with financing. I would suggest you spend more time calling people than reading if you have already read a bunch of books.
Good Luck
Between my partner and I, we've went through about 80k of home equity money. Cashflowing over $3000 a month now.
[addsig]
EnormousCitrus, I wish I would've been more creative earlier on. I'm just now trying to do subto and other low money down deals, could be much farther along if I did learn earlier
[addsig]
Ah....
Smart fellow here.
I like your style, ace.
Quote:
On 2004-12-15 18:32, ray_higdon wrote:
Between my partner and I, we've went through about 80k of home equity money. Cashflowing over $3000 a month now.
Do you guys plan on just keeping the rentals and drawing off the equity from your rentals and the cash flow...or are you going to sell any of them at some point?
Quote:
On 2004-12-15 18:34, ray_higdon wrote:
EnormousCitrus, I wish I would've been more creative earlier on. I'm just now trying to do subto and other low money down deals, could be much farther along if I did learn earlier
Hey Ray,
I would love to hear more about your early on mistakes as my father and I are embarking on the same path you took.
[Any mistakes? Not asking for a percentage back on our early deals and not being more creative with financing.]
What do you mean by asking for a percentage back, and what kind of creative financing are you talking about?
Thanks in advance and Happy Holidays,
Aaron
[addsig]
EnormousCitrus,
We plan on holding them long term, one set of triplexes we bought with about 100k of equity in them so in a few months we'll draw some of that out. I think the only thing that would make us sell them is if we had an opportunity to get into an apartment complex and wanted to do some sort of swap of something.
grneydgy
After our first three deals we figured out to ask for a percentage back. Let's say you negotiate someone down to 100k, well, now we would write the contract for 106k and ask for 6% back to go toward closing costs. 6% seems to be the highest you can do without trouble and legally, you have to make sure that the 6% doesn't make the purchase price more than the place is actually worth, which, if you are not getting the deal for 6% below value, you shouldn't do it. I mean creative financing as anyting but conventional, sub2 deals, owner financing, etc.
HTH
[addsig]
Ray,
So does that mean that what ever is left over after closings are paid is cash in pocket?
We are still closing on our first deal and we basically asked seller to pay closing, but jumped the loan up by a little more then closing costs. Is that the same thing you're talking about?
Aaron
[addsig]
I'm planning on buying several properties in the next few months and I can get even more back by adding in a 12 month rental advance. I'm getting closing costs, 10% downpayment, and positive cash flow at closing.
grneydgy, the 6% covers closing costs and toward the down payment, I've yet to do a deal where I got money back at closing, I like the other posters idea about getting the rent credit of a year, that would be a tough sale I imagine but one worth pursuing.
[addsig]