Acting like an EXPERIENCED investor - Posted by CH

Posted by Glen SoCAl on March 23, 2002 at 15:03:55:


I’m not an experienced investor, in fact I’m a wanna-be, and I think your point is well taken, however, the opportunity that Chad (OH) was discussing sounded doable.

If you run the numbers $47,000 purchase price, $10,000 in fix up plus 2% contingency, he comes in around $58,000.

$58,000 loan at 9% comes in around $520/month -PI- (I know someone is checking my figures right now…)

I think that Chad was looking at around $775 income from both units…that is surely not a $200 positive.
Only about 65% of his income from rents would be applied to profit…maybe 70% let’s say that’s still just covers his nut.

But if he moves in to the place, he’ll be contributing to the rent…money he’d otherwise be throwing away somewhere else, add depreciation and it doesn’t sound like such a bad deal.

Chad may have not fully considered where his loan is coming from or how he’s going to fund the deal, but as Brent (IL) mentioned, with a Sub2 or maybe a carryback, Chad could do just fine.

And the main thing is that Chad is posting here looking for help, so that he doesn’t make a bad decision.

Experienced investors choose more wisely. Chad won’t be one until he is one. But in the meantime, he’s educating himself. So lets give him applause for that.

Again, your point is well taken, but Chad may not be the best person to affix to the chalk board as an example of poor effort. He didn’t do nuthin’.


Acting like an EXPERIENCED investor - Posted by CH

Posted by CH on March 23, 2002 at 11:36:19:

NO DEAL IS BETTER THAN A BAD DEAL. Negative cash flow and positive cash flow deals without adequate reserves should be deals that you pass on. PERIOD! No if’s…and’s… or…but’s.

Unfortunately, beginning investors normally do not take our advise. They are too eager and impatient to do deals. They think quantity is better than quality. Follow some of the more experienced investors on this board. You?ll see that most of them have altered their focus after being in the business for a while. They usually started off with the same premise that they want to do as many deals as possible. But, after experiencing the many headaches that go along with bad deals, they eventually changed their focus to doing more quality deals that are more profitable.

Good deals need to hunted down. Bad deals are all over the place. Spend your time hunting and be patient??? you?ll find the good deals, which will help you profitably grow your investment portfolio with a smile on your face.

Please see a great post by DavePA giving sound advise to a beginner

So, start your investment career off acting like an EXPERIENCED investor???your banker will love you!

Good Luck,