Peace...

Are you taking advantage of these markets?? If not, what are you waiting for??



Whirling Moat

I'm in Tucson, AZ and believe it or not ... housing prices have not fallen all that much and the houses that went into foreclosure are largely the houses where the buyer was an investor who went underwater shortly after the purchase.

I have, however, looked at some properties in Cleveland - my hometown, but to far away to effective manage, and Phoenix - some great deals, but we are using our discretionary income to pay down on [I'm embarassed to say] credit card debt.

quote:

Originally posted by Whirling Moat:
Peace...

Are you taking advantage of these markets?? If not, what are you waiting for??



Whirling Moat

To learn how!

Peace...

quote:

I have, however, looked at some properties in Cleveland - my hometown, but to far away to effective manage, and Phoenix - some great deals, but we are using our discretionary income to pay down on [I'm embarassed to say] credit card debt

Many investors see the same problem as it relates to creating a portfolio of out of state properties.

Hiring a Property Manager can take most of the headache out of the rental management end of the deal.

quote:

To learn how!

It is rather simple (if you are in position, getting ready is the hardest part)...

There a two basic concepts in Real Estate Investing:

1. Buy and Hold

2. Buy and flip

Buy and hold means buying a property. renovating it, and leasing it to a tenant. The tenant pays the note created by the transaction and if done right the investor should earn a little money which is left over after the note is paid.. So for instance, if you have a mortgage on the property and are required to pay $600.00 per month to the lender, you can set the rent payment at $925.00 (If section 8 even higher) which would allow the owner to earn a passive income of about $325.00 per month. If you hire a property manager you will probably pay about 10% of the monthly rent for fees which means that in the above scenario you will net about $230.00 per month...You will also have to pay property taxes which means that the above figure will be less per month, However, If you pick up enough properties, the income can be substantial.

The idea is to hold these properties the same way people hold stock.. You are buying low right now. When, or if, the market shifts, you can sell your entire portfolio for huge profits. If you are buying properties at 20 cents on the dollar now, when the market shifts you mayy be able to sell them and make 500% profit...



Buy and Flip simply means buying a property and selling it fast to another investor, or to and end buyer owner occupant. The way this works most times is a person finds what people in the business call an REO (Real Estate Owned), or bank owned property. The bank sells it for a great, ridiculously low price, the investor finds a lender, oftimes what is called a hard money lender..The lender provides the money for the acquisition, any repairs, etc.. The Investor, then quickly places the property on the market or off loads it right away to someone already in line to buy the property at a discount (This is considered wholesaling)..

In this scenario you may buy and rehab a property for $40k and sell it the next day for $70k...You make a quick $30k.

It happens everyday.

Being able to take advantage of this market really depnds on FICO scores, cash on hand, or the strength of a savings account like a 401k or IRA.



Whirling Moat

quote:

Originally posted by Kweli4Real:
I'm in Tucson, AZ and believe it or not ... housing prices have not fallen all that much and the houses that went into foreclosure are largely the houses where the buyer was an investor who went underwater shortly after the purchase.

I have, however, looked at some properties in Cleveland - my hometown, but to far away to effective manage, and Phoenix - some great deals, but we are using our discretionary income to pay down on [I'm embarassed to say] credit card debt.

Kweli, i was up late last night watching tv, and i watched about 3 shows in a row where people were looking for homes, or trying to sell their homes, or trying to improve the value of their homes. What i noticed was that these people's 3 bedroom 2 bath home always seemed to be valued at $250K - $650K, but the houses on the inside didn't appear much bigger than the average house.

this made me wonder

1. How the heck are these simple, and in some cases older homes being valued so highly? I know location makes some difference.

2. How are these couples who are working regular middle america jobs getting into these homes?

am i missing some piece of the puzzle?

real estate is becoming slightly interesting to me