You People Are Great!
First time poster. I have 70M cash, 25M heloc and 80M 401k available. After reading lots and lots of post, I think rehabs are the way for me to go. I'm 63 and ready to retire in a few years. I live in the Shenandoah Valley in Virginia. I know thats not a lot of info, but are there any "from the hip" thoughts/suggestions out there? As I said, you folks are really great for sharing your vast knowledge . :-D
I'll blast ya with both barrels and say take yer 70 million cash and just live off the interest while enjoying the good life! :-D
No..no.....Thats 70,000 and 25,000 and 80,000 not million, So sorry, in the printing business M=1000 -)
samsdad,
There are alot of options out there for you and it would be hard to tell you what you should do. This would all depend on your goals. I would get an idea of your area and start looking into what would fit you best. There is money to be made everywhere, find something you like and get out there and make it happen.
Good Luck,
Scott
Your first step is to come up with a strategy for your rehab activities. One possibility is to find properties and then buy, rehab and sell at a profit. Another is to buy, rehab, keep (rental) and refi. Then you repeat, ad nauseum. Part of this will depend on your area in terms of appreciation and cash flow.
One thing to keep in mind is that if your area is not ideal for what you want for investment, you can do a 1031 tax deferred exchange to another market. This may be what you need if you are looking for significant appreciation before retirement.
Perhaps you might buy, rehab and sell as a source of money that can continue after you retire.
I guess I will be the wet towel. At 63 years old I would warn you to be careful investing your life savings into real estate investing. I would be 1000 times more cautious than somebody in their 30s who has time to recover financially. Real estate investing is not fool proof nor without GREAT financial risk, especially just starting out. More than one fool and his money has been parted. Becareful and don't throw all your eggs in one basket hoping for a do or die return.
samsdad
Before jumping, I would recommend reading all you can on the subject of rehab investing.
The-Rehabinator makes a vary good and strong point.
Rehab investing can cause one to run through lots of funds vary fast.
I started out investing using one technique at a time - taking the easy ones first like flipping and more advanced like land development as experience grows.
I have been investing for 20 years the first 5 making most of my mistakes but even after all the years once and a while a deal still kicks me around.
I am just now stepping into commercial development in a vary tuff community with ton's of politics, rules, regulations and the list goes on and this project is now into it's 14th month of the approval process with the city and county. With research, planning and learning I knew about this and set aside the funds for the project.
I know when the REI bug bites most jump before they learn to jump. Use the years of wisdom and take it one step at a time.
[addsig]
Hi SamsDad !
What towns are you close to?
I am between Winchester Va and Harrisonburg, Va
I am also a begining rehabber wannabe. A GREAT book to set you on course is Kevin C Meyers: Buy it, fix it, sell it, PROFIT! Having goals and a DETAILED plan is CRUCIAL as Kevin outlines. Good luck!
Samsdad
I am from Richmond, VA. I would look in roanoke. There are tons of old houses that need work there. Best of Luck.
JC.
You have a good market right where you are, don't you?
You could find cheap fixers, or college rentals, or good keepers for appreciation as DC sprawl spreads out to Winchester, don't you think? I think you have good opportunity right in your area. I vacation in Massanutten, btw...love it. I just rented one of my DE homes to a couple from Winchester. I've never done wholesale or bird-dog, but it seems like you might be able to take advantage of where you live and find some deals for other investors in DC area or outa state.
Sounds like you are a gambling man! From what I understand, you believe that after reading many posts in the TCI forums that you think that rehabbing is the way to go. Forums are not a bad resource but thats all that it should be considered - a resource.
Since you don't have any formal training in real estate, I would recommend investing a small amount of the money that you have in a real estate course/seminar. I'm not claiming to be an expert but I attended the Robert Allen 3-day seminar and it was a real eye-opener in terms of understanding the business, the different ways of buying/selling, the different costs associated with buying and selling, how to figure cost/profit associated with rehab, as well as having access to many valueable resources.
If you have a background in construction then you have a leg up on everyone else who wants to do the same thing but if you don't, there is a lot to learn about rehabbing.
I'd love to try to help you, but I honestly don;t know where you want to go, do and experience with REI. We end up rebahhing almost all of the homes we buy. but we're not in the rehab business (although maybe if i were i;d make more money and be happier).
I guess my point is that you'll need to try to determine what you want to do to start your day. I believe first and foremost I am a value buyer - I try to buy at a significant discount to the value of a property. Use my experience to determine the most likely way to get the top $$ and sell or rent out and hold.
About the only suggestion that I would make is to start moving your 401k into a self directed IRA so that you can build your empire tax free.
I believe there are opportunities in every major city, the key is to be aggressive and ready to pull the trigger.
You can help yourself with a self-test:
Why do you think rehabs are the way to go?
What experience related to REI do you bring to the party that will help you succeed at rehabbing?
Do you enjoy and excell at that activity, or are you looking for something altogether new in retirement?
(If altogether new, reread Rehabinator's post.)
Do you have experience with contractors that will help you work on a budget?
Do you have good credit that will reduce your need to risk your nest eggs?
How much risk are you comfortable with?
These are mainly generic questions that could relate to any retirement business pursuit. I believe in setting realistic attainable goals, particularly during retirement, when risk tolerance may be lower.
And retierment age is creeping up on me too.
Good luck!
[addsig]
I would add that I would consider investing 20% of your retirement nest egg into real estate investing at the age of 63 as extremely risky. If you do get into this and make it to 65 and haven't lost money then consider maybe using up to 30% of your retirement nest egg. The problem is the gains can come along one after another, but one bad investment can wipe out all those gains and then some. People have a nasty tendency to keep throwing good money after bad in order to stop from losing their initial investment instead of just walking away and taking the loss.
It isn't unusual for somebody to be on the verge of losing $15,000 on a bad investment and they throw another $15,000 at it to save the first $15,000, then they end up losing $30,000. With your age and relatively small amount of reserve there will be no real margin for error. If you don't get real successful right off the bat you could be in real trouble. You probably won't be able to whether a bad 1st investment and recover.
read, study, know what you want to do, and how to do it.......keep reading tci......km
if you have to ask strangers what to do with your money your not ready........keep studying.......km