Re: Need Honest Feedback - Posted by ecb
Posted by ecb on July 05, 2003 at 18:49:25:
First, congrats for the new children. Your life will certainly change.
About Carleton Sheets (or any other “guru” for that matter – including these and other message boards) –
Don’t view any of it as “black and white.” Instead, consider them as a source of ideas. Take what you like and discard the rest. Try things. Experiment. Run ideas by your advisory team (CPA, attorney, REA —you have that team assembled, right?).
Can you buy a house with no money down? Yes. I’ve done it — here you go:
House across the street from me went into B/K. Eventually, HUD ended up owning it. They wanted $59k. I bid $45k and they countered at $58.9. I declined and waited another three months. Went back and bid $45k again. They accepted. I used a home equity line of credit (i.e., I borrowed against the home I live in) to put $4,500 down and financed the rest conventionally. The property appraised out for the bank at $57,500. Did I use any of my “own” money…nope. I essentially used part of my year end bonus to pay the home equity loan off. So, aside from the interest I paid on the loan until I paid it off, I used none of my own funds. I did put about $10k into it. Monthly P/I/T/I are about $275. It rents for $525 a month.
The above example worked because of patience, KNOWING what I wanted to do, and the circumstances of the fact that HUD (or banks) are not in the business of owning real estate. Can I do that 4 or 5 times a month – I don’t know as I’ve not tried…but it might prove difficult. Could you do it 4 or 5 times a year – perhaps.
My suggestion is get a TEXT on real estate investing (not infocommercial stuff) and read it (I recommend "Real Estate Finance and Investment Manual "by Jack Cummings) that covers a broad spectrum of the entire PART of real estate investing — financing and purchasing are only the front end of this “marriage.” Read it cover to cover. Then talk with realtors…accountants…lawyers…etc.
Probably the best advise I can give you before you do anything — KNOW WHAT IT IS YOU WANT AND INTEND TO DO (i.e, do you want to rent it out or sell it, are you looking to rehab or not, do you want residential, commercial, industrial, or mobile homes, etc.?). This will allow for focus. Understand that what you want and intend to do is transactional in nature and can change from one deal to the next. However, everything should be consistent with your long-range, medium, and short-range objectives (financially or otherwise).