Excess $1000 Every Two Weeks. Any Suggestions? What Would You Do?
Hey fellow investors. I’m 23 a recent college grad with a great job (Engineer) and an excess of $1000 every two weeks. I’m single, no kids, and with minimal debts. Up until now I have been strictly a day trader investor, but am looking to get involved in real estate now that I have a steady job. I have read many books on real estate investing such as The 16% Solution, Investing in Real Estate, Buying Real Estate Foreclosures, etc… My current plans are to start an LLC, dealing with renting, flipping, urban lots, etc… I am definitely ready to take the plunge into real estate but am not sure where to strike first. I live in an urban environment and see alot of good deals (foreclosures, tax reversions, nice residential building lots, etc). I know a few appraisers, rehabbers, and handyman but none are investors. They are of course great assets to me. My main focus is building wealth. I’ve already decided that I want to purchase at least one property a year minimum. I know of course that I can do much better than that. Most of the deals I see require a nice amount down. I’ve been looking at single and two family homes in the past two weeks. Going with these deals one residential property a year is probably all that I can afford. If I keep saving eventually I can do these deals but I think I can find a much better way. How do you guys find little or no money down deals? What would you all do with an excess $1000 every two weeks? I would be grateful to hear any suggestions or direction.
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I'd start by banking the cash. in six months you'd have over $10,000, more than enough to get you started in the real estate biz.
So where do you live now? Do you own your own home or rent? I'd seriously look about for a house to buy as an owner occupant. Peferably one you could get a good buy on because it needs some work that your handyman buddies can do.
Pay off all your high-interest debt (credit cards, etc.)
Once the house is renovated get it re-appraised and open a home equity line of credit. All this time you've been re-saving your 500 per week so inside a year you should have some nice cash to work with.
Done this way Real Estate is a patient mans game but you have the advantage of youth and that can make patience pay off big time over time.
Do not get so busy with real estate that you neglect your engineering carreer. I'm assuming you went into this business because you like it, it meets some personal need of yours. Keep an eye open for new gadgets you can invent and patent or market. As you pointed out your goal is wealthbuilding not owning buildings. A few good inventions can build wealth as steadily as real estate can.
Dear Detdre
An Engineer, a taste for numbers had fun day trading from home. Good exposures. Interested in Real Estate ? Why not we all walk on it everyday.
Your monthly overage is merely reflective of your present single status. It will of course be terminated as you gather other items, like wives, kids, an occasional dog and the ongoing payments of wedded life.
I suggest that you play in paper. I also suggest that you speak with a few Real Estate Brokers and inform them that you would like to become creative in the paper market. Discounted Seconds taken back at sale. Fudge money loans made to cure small problems like a foreclosure, or a terminal disease, whatever.
Play that for awhile and while doing so look at the fringes of each transaction. Be aware of what is going on. Post your questions to this site and slowly like pussy cat merge into the area of Real Estate Investments.
Lucius 8-) 8-)
Talk a seller into letting you put down very little earnest money, then find you a mortgage banker to get you a 100% loan. If your credit is good, this should be NO PROBLEMO! There are also many other ways. Go back to one of the books you read and you will probably find it there.
Thanks Commericalking and Lufos!!! You both sound very wise. I will keep my real estate endeavors posted on TCI. Currently, I’m living rent free as long as need be. What I would pay for rent I funnel at student loans and any high interest debt (I want to eradicate both in the next two years). My first investment will be my own home which I have been seriously looking for. I’m looking at single and two family residential homes. I’ve walked through about three REO’s last week. I’m just at a standoff right now with time, saving capital. I’m also in the process of filing some LLC forms with the state. Yeah, I love my career and will not be retiring soon unless I lose a love for it, become a billionaire inventor, or real estate mogul =) I get a big kick out of working with autos that will not be in production for another 3-4 years. Commericalking, with a little effort and hustle I should reach that 10g mark in 2-3 months.
The idea of playing in paper sounds very interesting. It’s not something that I have considered or am familiar with. If I ask the average realtor about playing in paper will he/she know what I am talking about? Where can I find more information or read about the paper game?
Raj, I will look over some of my books again today. My credit is good, I will check out getting a 100% loan.
Thanks again everyone for the great advice. I will keep everyone posted.