Newbie, With Some Questions! :)
Hello everyone,
I have been reading several posts (a few hundred) on this website for the past few weeks, and I must say everyone has great advice. A little background, I am a recent college graduate with my Masters in Accounting and am a licensed CPA. I will start working for one of the large Big 4 Accounting firms in a few months. However, me and a few buddy's want to start investing in some property. I live in the Orlando, FL area and we want to purchase some pre-construction condo's being built downtown. We are trying to get a listing of such property's which are still in the planning, design stage so we can purchase a few condo's and make a profit on the appreciation. First, this seems like a great idea to us, and the money looks as if it will be great, however we understand that this board probablly has alot of veterans at this game who could tell us otherwise. Basically, if this is a good idea to start investing, were can we get a listing of such projects, if not what would be a good starting point (books, magazines) to get a proper start on our investing paths. We are young, spirited, wide eyed and hardworking "young professionals," looking to take advantage of the many great opportunities. Thanks for all of your help, and look forward to building mutually beneficial relationships with several memebers in the future. Thanks again
:-? :-? 
Skinny:
I would advise you to start working your job as a CPA and do real-estate at nights and on the weekends. I would recommend finding deals at 80% of market value or less, houses or units in
good neighborhoods and rent them out
for the long haul. When you hit 50, you can laugh all the way to the bank. Besides, as a CPA, you will have all the
tax angles down.
Best Riches,
Jeffrey Adam
_________________
"The only place success comes before work
is in the dictionary."[ Edited by JeffreyAdam on Date 03/22/2004 ]
Hey Jeffrey,
I appreciate the advice, it seems like renting out houses takes a good amount of time and work, which unfortuntately I will not have until I retire as a partner at 50! I was looking to be more of a capital investor? That's why we were thinking the condo's bc there is really not alot of time consuming work. Were would we find these deals at 80% below FMV to research purhasing??
Thanks again,
Alan
What's the Orlando housing market like? I know that some people on TCI have done just that with homes in Vegas (where it's appreciating about 1% per month), but even then they were only putting a couple of grand down to secure it, and someone else would buy it.
How will you buy it?
Will it cashflow as a rental if you have a hard time selling it?
How will you sell it?
What if it takes you 8 months to sell it?
What if you have to drop the price by $10K.
Will you be able to offer them a price that others (like the developers) can't? (
Keep in mind, over time markets (almost) always appreciate.....but it's like the stock market. The trend is continuously up, but there are lots of ups and downs in the mean time. What if you buy it and the values drop by 15% (along with the market rents)? Are you willing and able to hold it for 5 years while the price recovers?
Personally, I think the potential returns are not worth the risk you're taking. You're going at it with your fingers crossed, hoping that everything turns out the way you hope....and they just might.
You can make money this way, but be sure to think it through, crunch the numbers thoroughly and run through just about every imaginable scenario that could play out. If everything makes sense, then go for it.....although I still think that there are better ways to make money in RE.
Hibby,
I agree with everything you said, being a CPA you know how detail and nit picky we can be. I did pose all of those questions already, and I agree it is a risk. What other means of real estate investment would you suggest we steer towards. I beleive out biggest advantage being CPA's is that we imagine all the worst possible scenarios and then access risk v. reward potential based on that. What would you suggest as a good starting point??? Again, thank you to everyone who has provided this valuable input!
Thanks,
Alan
Alan,
I don't think anyone can say which way is the best starting point. Everyone is different, everyone has different goals, and what you will get is a bunch of, "This is how I did it." I think you need to assess your own needs and wants, set your own goals, then attack this thing. What worked for me may not work for you because my personality and style of investing may not fit you.
Define your goals to the nth degree and then you yourself determine what is the starting point based on what you want to accomplish.
SkinnyChunks:
You can own 30 rentals and if you have a
good property management, it is all handled for you.
In terms of finding deals below 80% of market value, there are courses on this site that will show you how. Try the absentee owners and pre-foreclosures.
Best Riches,
Jeffrey Adam
[addsig]
Alan,
If you're interested in knowing what residential new construction projects are in the works, here's how you can find out.
Contact the town or municipality, ask to see a list of properties that are in the subdivision and land development processes, then select the ones that are of interest and ask to see the development files on them (plans, submission comments, approvals, etc). This is public information but I would suggest making an appointment with the custodian of the files who will have to dig them out for you. Among the wealth of data in these files will be the applicant names and contact info, plans and status of approval. Then you can contact the builder-applicants to find out when they expect to begin marketing. This could give you a jump on projects at the pre-pre-construction stage.
You can find properties where you can have all repairs done by someone else and still end up with an investment of only 70% - 80%---on single family homes.
You can do this with condos too, but I prefer single family homes because:
condos generally don't appreciate anywhere near single family homes
you may be subject to rules and assessments that you really have no control over
some condos can't be rented
-------------------------------------------
Spend a lot of time identifying reasonable priced contractors. I prefer guys (and ladies) who are doing "side work", re: firefighter doing roofing on his off days. I've seen a lot of posts here where people are paying way too much for repairs.........you can get a great deal on a property and screw it up by paying market value for repairs.
good luck.