Posted by Bert G on April 17, 1999 at 11:21:23:
“GET LOTS WHILE YOU’RE YOUNG…”
Yea. Virgin investing is a lot tougher when you hit 50. There are so few virgins left.
BG
Need more coffee NOW!
Virgin investor looking for some simple advise !!! - Posted by Chris
Posted by Chris on April 16, 1999 at 21:44:43:
I am ready, willing and able to start my investment career and want to come out of the shoot running!!! I’ve got a few great things going for me: excellent credit, never owned real estate before and $10,000 in the bank. I am currently renting and will be purchasing something within the next 6 months. I’m thinking of buying a duplex or fourplex to live in one unit and rent the other(s).
Do you have a great suggestion to get me started on the right track???
Thanks,
Chris
Simple Advise - Posted by Sean
Posted by Sean on April 17, 1999 at 18:56:57:
Well, Carleton Sheets recommends you look at a minimum of 25 properties in your area with no thought of making an offer on any of them when starting out. It helps to give you a feel for how much houses are worth.
When I first started out I bought myself a place to live, then later on moved out and converted it into a rental. This seemed to me to be a brilliant idea, but in truth it didn’t work out nearly as well as I thought it would.
There are many, many ways to buy property no money down and even to buy property and put cash in your pocket. The problem that most beginners have with that is they don’t come across as professional and Realtors hit them up with requests for credit approval letters, proof of funds, or whatever. Fortunately you should fly by all of that.
Seek sellers that are anxious to sell. Seek houses that are owned free and clear or have a very low mortgage.
As a technical matter, I think your best bet is to seek a three-way swap. If you can find someone with a house owned free and clear worth around $50,000 you can offer him $10,000 down and a mortgage for $40,000. Simultaneously get pre-qualified through a bank for a loan for $40,000. Also get to know some people who buy and sell notes for a living.
People who use John Behle’s “compensating note” method frequently create mortgages of varying sizes and interest rates as part of their business. If you can find someone who will create a mortgage for $40,000 with the interest rate that the seller wants, you’re in business. Suppose he’ll create a mortgage for you for $40,000 at 8% and he’ll sell it to you for $30,000.
So you put your $10,000 down and get the $40,000 from the bank. You use $30,000 of that to buy the mortgage which you give to the seller. When the smoke clears you still have $10,000 cash, a $50,000 property that you owe $40,000 on and a happy seller who got full price.
Re: Virgin investor looking for some simple advise !!! - Posted by NJ DAVE
Posted by NJ DAVE on April 17, 1999 at 08:48:40:
GET LOTS WHILE YOU’RE YOUNG…
Re: Virgin investor looking for some simple advise !!! - Posted by SteveS(CPA)
Posted by SteveS(CPA) on April 17, 1999 at 01:35:30:
Chris,
A little money can go a long way but a lot of money can get you into trouble. Your own hard earned money should be the last (very last) option. I personally never use more than $1,000 of my own money. And thats only for the very best deals!
Use your mind and save your money. Pretend like you have no money when you walk into a deal and you’ll spend a lot less!
But you’re on the right track – good luck.
Re: Virgin investor looking for some simple advise !!! - Posted by michael
Posted by michael on April 17, 1999 at 24:46:14:
I think your idea of purchasing a duplex is excellent. That is how I got started with my first home. Three years later I own my own home and five units. I did it slow and steady. I have a lot of money in equity but that doen’t really matter. Cash flow is the key. The fact that you have saved $10000 is a real assest. Hang onto your cash as much as you can. Generate cash flow instead of spending that hard earned cash.
Michael
Re: Virgin investor looking for some simple advise !!! - Posted by Paul Mc
Posted by Paul Mc on April 17, 1999 at 24:11:55:
Chris,
I don’t know your area or home values, but that $10,000 you’ve got saved should be used to buy 10 houses instead of just one. (Always have cash in reserve). Thats my definition of ‘coming out shooting’. Get the creative ideas flowing, find motivated sellers, and take those headaches off their hands. I don’t suggest creative offers with real estate agents unless you have ‘screened’ them. Probably the best way to learn the business is to start with single family homes. They are the easiest and fastest property to resell or rent out. Good Luck.