Buy Or Save For Flips?
Stumbled upon (no RE commissions) a little condo in a sought-after area for $220. We might struggle to make the payments, but will own it , instead of renting (presently).
My question is, would it be possible to still do flips if most of our money is tied up in this purchase, or can we use the equity to buy and turn around other homes 
This will depend upon your definition of a flip. The way that I think of a flip you should need very little cash to do a flip.
But if your buying the codo below market value. After you have been in it a short time and you have done some fix up. You can get an equity line on it based on the appraised value. Then you would have acess to the equity in the property for other investments.
I have been advised and I also recommend to start working on your REI career before purchasing your own house.
Read Rich Dad Poor Dad by Robert Kiyosaki. He gives a good reasoning behind this. If you define a liability as something that takes money out of your pocket and an asset as something that puts money in your pocket, your house is definatly a liability.
If you are going to spend more money and struggle to pay a liability, you may wanting to consider to spend money and struggle to pay for an asset instead!
Some food for thought...
Yeah I agree
I'm still in an apartment, but I'm doing deals. When you start doing deals and you know how to do them without banks, your outlook on buying a house changes. Invest in your education, make some money, then choose... which one of your houses will you want to live in. [ Edited by nebulousd on Date 11/24/2003 ]
A Big Thank You to all you wonderful, wise people!
I am so stoked to find this website!
As for education, would you pay $2000-$5000 to be able to speak to a one-on-one guide/mentor who will help me over the phone to do deals (but doesn't know my state's laws, etc) for 6 months? Or just try to stick with written materials and email access to help from "Lou Voukas?"
It's so hard to get started, especially on your own!
I have no problem with paying for an education but without knowing who this person is "Keep the money in your pocket!".
Some mentors are worth a lot more than what you will pay them. Some are not worth the time that you spend talking to them much less a fee.
I have no problem with high fees but you want to get what you pay for. You don't want to know what my billing rate is in the real world. But I make my clients money.
If you contact these guys you might get more help. These are RE clubs in your area. Paul V. Xavier is very helpfull if you can go to his meeting go, I would but it is a little far for me.
If this contact info is out of date let me know.
Hawaii Property Center
Contact: Edward J. Duffy
Telephone: (808) 328-9595
When: Last Sunday of each month, 5:00pm
Maui Real Estate Investment Club
Contact: Greg Aurand
Telephone: (808) 573-2219
When: 1st & 3rd Mondays of each month, 7:00pm
Where: 270 Lalo Street, Ste. 105, Kahului
Hawaii Real Estate Investors
Contact: Paul V. Xavier
Telephone: (808) 368-6548
When: 1st Thursday of each month, 6:30pm
Where: Kalihi/Palama Library, Honolulu [ Edited by lacashman on Date 11/26/2003 ]
Hey Mr. Cashman,
thanks a bunch for these contacts- I actually know Paul, and yes- a very helpful guy! I failed to make it to any of his meetings, but now I will!
Thank You for your time. I can let you know what he talked about in the meeting, if you'd like...
Books are cheap, and only cost $2 (for the coffee) if you read them at Barnes and Noble or Borders. Get an idea of what types of RE investment strategies are out there, learn the lingo, THEN pay an experienced guru for their time if you want to. It will make a lot more sense to you if you already have some exposure to the ideas in the books and cd's. I 'm pretty new to these ideas myself, and recently bought that $229 deal for Ron Legrand's cd set off of this site. I've learned a lot for the money invested, and if I go to a seminar now, I'll be much more prepared. Good Luck! Z
I absolutely positively disagree with anyone who says to start investing before you buy your own house. Especially when you attribute it to Kyosaki. True he does say that your house, being that it doesn't make you money, is a liability. But he will also tell you that paying someone elses mortgage via rental payments is even less desireable. If you own, every payment you make helps build eqiuty, which you can leverage. How many times have we heard that a house was appraised 20k higher than what we think is the highest comp. That is leverage. A home owner generally has a higher credit score than a renter, all other things being equal. A home owner learns about general maintenace better than a renter. A home owner has more experience closin a RE deal than a renter... at least they've gone through it once. Help me John before I go off the deep end. This does not mean that I believe you should stretch yourself too thin in $$$ by your residence. That said, whenever I feel a financial crunch or want to buy something that will require payments, I do look to buy cashflow to support it.
Good Luck,
Shawn(OH)
Thanks, guys, for your insightfulness.
It's great to hear differing ideals/ theories.
This condo that I'm looking at buying below market value will yeild a profit margin of 27%, if all goes well and no RE agents get involved. However, the books say that you should be looking for at least a 30% - 50% profit margin.
that seems like fantasy to me.
Where do people that aren't total hawks find these deals??? especially when it's a hardcore seller's market.
Buy the condo at that price. Sounds like a great deal in a sellers market. If it stays a sellers market value will rise. I know a guy who bought his own house to live in, got an offer to sell it, sold it and found a better house. Lived there a while, sold it and built another and sold it and next thing you know he had his home paid for. Boo to not buying you own home to live in. Even in a buyers market where rent is cheaper than buying i would still buy but find a bargain. Any fool can open up the MLS book and buy a house. Look for a deal and buy a hundred of them. Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr[ Edited by Tedjr on Date 11/29/2003 ]