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Yes - it is still very do-able - stick to an area that you know - forget the flip.
The first step, young Danielsan, is wax on wax off. Then sand the floor. Finally paint the fence. Then you too can be successful investor like Miyagi.
Assuming that Dr. Spin is speaking metaphorically - yes it is VERY hard work - you must be willing to paint fences and fix toilets
Thank you Shelly -
I live in Intown Atlanta - have for 20+years - know every street name almost every house. There are always folks who are tired of landlording - have no payments - just ready to cash out and join Steve on the links. There are bargans to be had if one works at it. We own six such properties.
I also know that half the 20-somethings in the world want to live here in a nice apartment with some character (hardwood floors, high ceilings - walk to the bars and restaurants - etc) - they have good jobs, good saleries.
It isn't that hard to own a self-sustaining investment property if you know the market. My horizon with these things is 10 years. I would advise young Ismail
to start by buying a triplex or quad and live in it while renting the other apartments.That said, I stubbed my tenticals "investing" in a resort in S.C. - got out with my pride bruised but otherwise OK. Owning a beach house is not a sound investment in the traditional sense. We have a lot in a beautiful community in SOWAL and are just sort of waiting to see how the next act plays out.
As Steve (and Kurt & Spin) implied - it is hard work and takes YEARS - even decades - but RE is still a sound investment - IMHO
Shelly - I forgot to say that you are one of my heroes:clap_1: :clap_1:
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Nice post Searcher. Well thought out and honest. Prop's to you for taking the time to lay that out for everyone.
I suspect the difference between you and many of the people getting into real estate over the past couple years is that you accept its day-in and day-out hard work, and many of "them" think that it's just easy money.
When young Ismael let on that he is looking for his real estate mentor on late night infomercials, I immediately slotted him into the "them" catagory ... I wonder if they give away a set of ginsu knives with their "advice" ...
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For the person who said they were just getting started:
I haven't found enough success in RE to be anyone's mentor but I wanted to share my own little story as encouragement for you...
I became an accidental landlord in 1999 at the age of 26. I just got out of graduate school, got my first really job, and got a huge shock when I saw how much of my hard earned money Uncle Sam was getting. So I spoke to an accountant who told me that I needed to buy a house...
I found a townhouse I liked in an up and coming historic district 5 minutes from downtown St. Louis. After applying for a loan I was told I wouldn't get approved for the townhouse that I wanted but that I would likely get approved to buy the whole building which included my townhouse and the one next door. I was totally dumbfounded. I couldn't get a loan for one but I could get a bigger loan for two?
The bank counts 75% of rental income toward the income portion of your personal debt to income ratio. So my income plus the rental income gave me what I needed to qualify. And because I was living there I qualified for an FHA loan which only required me to put down 3% on the property...
Long story short-
I bought the building and the value doubled in 6 years. I refinanced and cashed out enough money to buy another multifamily property- this time nonowner occupied. And then, you guessed it, refi'ed that one and...
Where am I heading with this posting?
Despite what some jaded (but very smart and entertaining) folks will tell you on this board, there is a lot of opportunity out there to get started and do well in real estate. Take the words on this thread to heart about it taking hard work and time and that you need to know an area. You probably shouldn't try to start out in So Wal.
My RE investment strategy is to look in up and coming areas near downtown of cities like St. Louis and Cincinnatti. Specifically, I like historic areas that have made progress with gentrification and have neighborhood restoration committees already in place. Picture big red brick buildings with exposed brick and high ceilings. 20 and 30 somethings love to rent these places...
You could make a killing if you rehab them yourself and then rent them out but I was never into that. So I try to buy them from the people who do the rehab...
Good Luck!!!
George
I haven't found enough success in RE to be anyone's mentor but I wanted to share my own little story as encouragement for you...
I became an accidental landlord in 1999 at the age of 26. I just got out of graduate school, got my first really job, and got a huge shock when I saw how much of my hard earned money Uncle Sam was getting. So I spoke to an accountant who told me that I needed to buy a house...
I found a townhouse I liked in an up and coming historic district 5 minutes from downtown St. Louis. After applying for a loan I was told I wouldn't get approved for the townhouse that I wanted but that I would likely get approved to buy the whole building which included my townhouse and the one next door. I was totally dumbfounded. I couldn't get a loan for one but I could get a bigger loan for two?
The bank counts 75% of rental income toward the income portion of your personal debt to income ratio. So my income plus the rental income gave me what I needed to qualify. And because I was living there I qualified for an FHA loan which only required me to put down 3% on the property...
Long story short-
I bought the building and the value doubled in 6 years. I refinanced and cashed out enough money to buy another multifamily property- this time nonowner occupied. And then, you guessed it, refi'ed that one and...
Where am I heading with this posting?
Despite what some jaded (but very smart and entertaining) folks will tell you on this board, there is a lot of opportunity out there to get started and do well in real estate. Take the words on this thread to heart about it taking hard work and time and that you need to know an area. You probably shouldn't try to start out in So Wal.
My RE investment strategy is to look in up and coming areas near downtown of cities like St. Louis and Cincinnatti. Specifically, I like historic areas that have made progress with gentrification and have neighborhood restoration committees already in place. Picture big red brick buildings with exposed brick and high ceilings. 20 and 30 somethings love to rent these places...
You could make a killing if you rehab them yourself and then rent them out but I was never into that. So I try to buy them from the people who do the rehab...
Good Luck!!!
George
Great story George
There are opportunities like this all over America in big cities - one just needs to be willing to roll up their sleeves, have imagination and wade in. There is a huge shift happening toward Urban Living in the young middle class.
Good stories from the "boots on the ground."
I was a Florida landlord of just a single home myself for a couple of decades; I put 20% down and because carrying costs were minimal, the property was cashflow positive. It wasn't too much of a chore to keep it rented and I only hit a few rough patches along the way. In the end I sold it to a young couple who were wanting to start a family and desperately wanted to buy it.
Fast forward to late 2003...I was on a cruise that was teaming with "Golden Girl" types from Boca (it was Hanukka week). Time and again I overheard stories about how they were making plans to start selling off the Florida apartment buildings, condos and rental homes they owned. They said the money they were preparing to make would more than make up any money they would make by continuing to be landlords.
If they followed through with their plans, they did very well indeed by getting out of the business before the hurricanes started; the frenzy ran up the prices and tripled the taxes; and the increasing insurance costs ate away at what profits were left.
Unless one has a pretty big cushion of cash to fall back on, I'd recommend they steer clear of starting in the business as a Florida landlord until the massive inventory overhang (competition) and carry costs (insurance & taxes) settle down.
.
I was a Florida landlord of just a single home myself for a couple of decades; I put 20% down and because carrying costs were minimal, the property was cashflow positive. It wasn't too much of a chore to keep it rented and I only hit a few rough patches along the way. In the end I sold it to a young couple who were wanting to start a family and desperately wanted to buy it.
Fast forward to late 2003...I was on a cruise that was teaming with "Golden Girl" types from Boca (it was Hanukka week). Time and again I overheard stories about how they were making plans to start selling off the Florida apartment buildings, condos and rental homes they owned. They said the money they were preparing to make would more than make up any money they would make by continuing to be landlords.
If they followed through with their plans, they did very well indeed by getting out of the business before the hurricanes started; the frenzy ran up the prices and tripled the taxes; and the increasing insurance costs ate away at what profits were left.
Unless one has a pretty big cushion of cash to fall back on, I'd recommend they steer clear of starting in the business as a Florida landlord until the massive inventory overhang (competition) and carry costs (insurance & taxes) settle down.
.