Planning Your REI Path
Hello all...
OK...it's Monday and it's time for me to scrap my old REI plan and institute my new one. I guess I never really had a good solid plan before, so I guess this is why I am looking at creating a new one today.
What I am asking here is for some of you to share your individual REI plans? I have a good idea of what I want to do, but I would like to see what others are doing out there as well. I want to base my plan on building capital. I have good credit (above 700), but I lack cash. So I need a plan that will put cash in my account today, then I can concentrate on long term holdings such as rentals and commercial property.
All your help and advice will be greatly appreciated. This board has been a tremendous help to me!!
Thanks!! Chris G
Get your duckies in a row. Make a list of everything you need in place, the most important being marketing. Why? Because once you start talking to actual sellers you then have a very good reason to get your butt moving on everything else in your list.
Read everything you can on this site, as well as any other materials you can get your grubby little hands on. Print out your favorite posts/articles, because you WILL forget things.
Take the plunge and don't be afraid of being a new fish.
If you don't have cash, I'd say start out bird dogging for someone more experienced. You'll learn a lot, and hopefully you can forge a good relationship. After getting your feet wet, why not try wholesaling a few of the equity deals. This doesn't require money on your part, but make sure you have an exit strategy.
You could also do a subto or lease option on the low/no equity deals.
Good luck, get moving.
It is hard to get started but if you really want to buy and sell read the book "How to Flip Real Estate" I can't remember the author but he walks you through it. Also join the local Real Estate Investors group. These are people like us and they share information Thanks! Annette
Thanks for all the good advice...
I def. need to educate myself furthur. I checked that book out & I am thinking of getting it. Can never read enough
I am going to give myself 2 weeks to regroup and then get back on the attack. I guess this all came about after being rejected for financing on a 6 unit commercial property I have been looking at. Lenders told me I didn't have enough capital or collateral to cover, though my credit is good.
Bit frustrated, but not giving up!!
Thanks again!
Chris G[ Edited by sharpREI_PA on Date 04/20/2004 ]
I can share with you what our plans/goals are. Probably differs greatly from alot of other people here, but this is what we (meaning my husband and I) think will work for us.
We originally started with 1 rental 16 years ago, then purchased our own house. Lived there 5 years, husband had a piece of land that we eventually built a house on and moved to. Turned our former residence into rental #2. Really didnt make any money on either, just basically wanted someone else to pay for them (in the form of rent covering the expenses) and planning on using the income when they are paid for, for retirement income.
That was goal #1, but as our lives changed and we had children, etc., our goals changed as well. Not to bore anyone with details, but we have purchased 4 more rentals since July, 2001. All were fixer-uppers and have cash flowed positively since day one. Our original 2 are now positive as well, and we have a nice chunk of money each month. Each time we purchased one and rehabbed, we charged all the rehab materials (we do 99% of the work ourselves) and use our positive cash flow money to quickly pay off the bills, leaving only our main bills to be paid on the properties (mortgage, ins., taxes, maint.). We made sure with each one to repair/replace things that were in marginal condition so as to hopefully decrease large future repair expenses (things like replacing hot water heater, replacing outside heat pump unit, replacing all appliances). Hopefully we wont have major repair costs on any of the properties for a long time (fingers crossed).
So now that we have a generous income from rentals, right now this money is going to pay off the bills from our 2 most recent rehabs (one we are not finished with quite yet). After that, the money will be split between savings and paying down our line of credit. We anticipate having a paid off principal residence and at least 2 of our rentals paid off in the next 10-12 years (one is already paid off). This is what we feel will work for our situation. Boring, I know, but we are happy with it. We are also working towards doing rehabs and flips now, to help pay off our existing debt quicker. I'm sure at some point our plan will change again, but right now we are quite satisfied with the progress we've made.
Tracy
If you are still interested in the 6 unit building you might consider bringing in a partner.
the key to rei is learning all you can. once you begin educating yourself byu acquiring all the knowledge you can your own personal path will unfold before you, and as you learn more your plan will adapt as your needs change.
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