New Guy On The Block.
Hello everyone.....Very nice forum here.
Ok here goes.....
I have been researching certain ways to make money in real estate and have figured out certain ways to do so which are (and I am sure many other ways too)
1)Buying a house (locally) low and selling high (flipping)
2)Buying a home and renting it . (eventually sell it.)
3)Buying a home as a vacation house (Florida) and renting it weekly .
4)Putting a deposit on a new home (not built yet) in Florida or other places where house prices go up so fast and once building is completed..flip it.
5)Condotels ... dont know much about them but seem to be less hassle than a home.
6)Regular condo purchase...rent then sell.
7)Purchase Land...hold ....sell.
Rehabing foreclosures etc/ sell.
Now I am sure there are a ton of other ways as well.....
My situation is : I am 35 y/o married 2 children not making much income on my own since I had a work injury and can probably never return to construction again, however my wife makes decent money as a mortgage processor , eventually to be a loan officer.
We Have just bought our home from her parents and have $150,000 in Equity as our home was appraised at $260,000 and we paid $110,000.
What are my best options in real estate investing, I realize I have to start small, but also my brother will partner up on my first investment to get the ball rolling.
Any advice would be great as well as listing any pros and cons of the methods I have listed above .
By the way I am in Southern New Jersey and focusing on property in Florida due to the amount of money these properties go up compared to NJ.
Thanks,
Ron W.[ Edited by RonnieW on Date 06/03/2005 ]
In order to chose from the list provided, you need to decide what works for you - where is your knowledge and skill? Do you know how to rehab a home? If not, maybe you should buy a home and rent it out and keep it as a long term investment. If you want shorter investments you can flip properties. I think most REIs discover what area of investing they are good at and do the same thing over and over again. The more you do it the better you become.
You have gotten some good advice from some of the other posts. So, here is my two cent addition.
It seems as though many of the suggestions are of the buy low-sell high in a short period of time variety. This may be what you need to boost your income in the near term. In addition you should make and execute a long term plan that involves buying and holding. This way you are taking advantage of the fact that real estate prices grow exponentially (proportionately to their value) while being paid for with fixed payments. To see the benefit, consider that when you are holding $10M in real estate, a modest 5% annual increase in value will add one-half million to your net worth in a year. This will happen without you picking up the phone once to chase down a pre-foreclosure or rehab, etc. Certainly, we are enjoying larger increases currently.
Since you are fairly young at 35, you can achieve these numbers in your sleep over a 20 year planning horizon and can likely get there in 10. There are many who have done it much shorter time periods.
Forgot to mention that I really have interest in the money of course but I am really excited about the research/ investigative part of the process.
I always wanted to be a detective, this comes close...LOL
Where is FL are you considering? I was investing in (east coast)Port Saint Lucie but prices brought me north to Palm Bay and now I am doing alot in Port Charlotte (west coast). I hace done well with new construction and have seem many people make millions on it. I have been focusing on flipping lots at the moment since they are in high demand. As far as buying a resale home I would not recommend that unless you get it at a discount. In the areas where the hurricanes hit most people are trying to get new homes .
I have alot of investors interested in Lake County and will be up there next week checking it out. I am not sure what you mean about holding for a year in NJ I have never heard that. The state tax in NJ will kill some profits though. I have been studing Ocean County NJ for a couple of months now and if I was in NJ I would be buying there. I purchased a condo in Edison preconstruction not sure if they are still selling but i thought it was a good deal.
Not wholesaling with a re asign but actually double closed?
If anyone knows of any good preconstuction deals in lake county fla. please email me.
[ Edited by RonnieW on Date 06/27/2005 ][ Edited by RonnieW on Date 06/27/2005 ]
Hi Dave, The best advise I could give you is when you sign the papers for the mortgage, make sure it is amortized and that there are no prepayment penalties. I think most loans are amortized now. This is when you make extra payments on your principle for the first 2 or 3 years and it knocks off years (and scads of interest ) off of your total loan amount. The amount of time you have left on your mortgage and the amount of interest you save depends on how much extra you apply to the principle amount borrowed. If you send an extra $20 or $50 with your house payment each month you will be amazed at the amount of interest you are saving. Hope this helps and Congratulations on your new home!
Personally I fel that a good mortgage broker is an invaluable tool to use. If they know your situation, they will shop you around between several lenders saving you the time and effort.
Good luck,
Jeff