Nobody can tell you if an investment is right for you. We all make those decisions ourselves based on our experiences and education level on the subject.
Personally, I think new construction investing is not the best place for newbies. High risk and you are betting on the future.
My opinion, worth exactly the price you just paid for it: use your 20k to purchase a fixer with lots of potential equity, fix it, sell it retail, bank the profit, do it again. Then, when you are more comfortable with real estate investing and have a “ongoing business” and a bigger cash cushion, branch out to other areas that interest you.
Hey, what’s up. I’m a 26 year old contractor new to the market and real estate in general. I’ve recently repaired my credit by paying off all my student loans and credit cards. Since then I have put away about $20,000 and I was looking for a good place to start. I ran across a brochure advertising brand new condos in vegas starting at $150,000 with a 10% down payment. After closing costs that ends up to be a little better than $20,000, which is in my range and the market seems good there. Is this a good place for someone like me to start? I’m grateful for any advice. Thanks alot.
Re: is vegas right for me? - Posted by Mark (SDCA)
Posted by Mark (SDCA) on April 24, 2006 at 12:07:21:
It depends. What are you going to do with it?
But probably not. Vegas is NOT a great rental market. There are a lot of units and the population is pretty transient. Prices long ago outstripped rents and rents have never really caught up. I’m not sure they ever will. Lately appreication has dropped off too. If you aren’t already in the Vegas market, I wouldn’t be looking to get in at retail.
Posted by John Corey on April 24, 2006 at 10:21:17:
Jeff,
You do not indicate where you are from vs. the LV property. Distance can make a difference. Both good and bad issues related to distance.
You said you were a contractor. Does this mean you have a license and can work independently or that you work for a licensed contractor?
If you are in a low priced market why not use your skills and capital to do a few deals? You will get the best return by buying properties that need cosmetic work or properties that need something major but you sell after some cosmetic clean up. The idea is to get in, get the simple stuff done and get out. Large projects that take a long time tend to turn into money pits and keep you out of the market for too long.
My suggestions are very high level. There are many paths available. Until everyone knows more about you it would be hard to say what is the best path.
I have made a lot of money with new construction. One thing I have learned is it ties up real cash for periods of time (2+ years if you are able to buy that far in advance). It is not the best way to cycle through cash when you have limited funds. By this I mean that you need to keep the money turning over and not being tied up in a deal for a long period.
Buying new construction can be pure speculation if you have no intent to hold the property long term as a rental. Speculation is not for newbies.