Re: What’s the Best Approach? - Posted by John Corey
Posted by John Corey on April 29, 2006 at 17:52:41:
I am south of you in the Portland metro area.
I need to burst your bubble a bit before encouraging you to invest.
The problem you are having is you spend more than you make. Simple way to improve the situation is to spend less. You got lucky in that Seattle has risen for a period so you can suck money out of the property to pay for the lifestyle you already paid for on a credit card.
Understand very clearly that 17% is considered extremely high appreciation. It does not happen every year. If you looked up the Seattle statistics you would see that 17% is clearly the exception.
Flash back - there was a billboard asking the last person to leave Seattle to turn off the lights on the way out. Houses were being given away and they were not appreciating. It was a while ago. There is no specific reason why it could not happen again.
If you have no credit, no cash, no equity but are willing to work you can still find deals or make money investing in RE. It just is a whole lot easier to do so with good credit, cash to work the deals and a monthly outgo that is easy to cover with one salary or less.
As to best approaches. There is no one answer.
Look at your present situation. With good credit but no really cash to work with you can focus in areas where credit matters more than cash.
Look at your present skills or other details related to your lives. Maybe you are a license contractor. Or someone you know has a lot of money but no time to look for deals. Or your husband is a lawyer and deals with probates.
May times people will be told to focus on flipping and other ways to get in and get out quickly with little to no money invested. It is not easy and in some ways it is just another job. What it can do is produce lumps of cash that you can then use as working capital on later deals. Dutch will tell you to check out Bronchick’s book on flipping (Bronchick is a moderator on the legal forum and has published a number of things).
A realistic way to start is to decide today to spend less and pay cash for things until you have the budget under control. Do that while learning about RE. There is more than one RE investor group in the Seattle area. Go to some meetings. Get the Bronchick book and start dialing for dollars. Or get the recent book by Conti that talks about how to start (100 calls a week). I also like the Weekend Millionaire book as that has an 8 week plan in the back and assumes the investor has a full time job.
The hardest thing will be changing you present lifestyle so you have the time, dedication and cash flow to invest. If you do you will look back and kick yourself for not starting earlier. In the early days it will not feel so easy.
PS. Well done on the credit score. The easiest way to keep it high is to not apply for loans. As you likely will be doing so expect the score to bounce around. Try to minimize the number of times you apply and the number of loans you hold in your personal name if you want to keep the score up.