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Author Topic: Real Estate Investing Mentor  (Read 2193 times)

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The Chief

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Real Estate Investing Mentor
« on: June 18, 2018, 08:50:22 pm »

Friends,

If any of you have extensive real estate investment experience and would be willing to provide mentorship to me, I'd be most appreciative.  After several books and much research, I'm ready to begin forming my team to foray into the real estate investment properties.

If you don't want to respond here, feel free to PM.  Thanks in advance.
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The Chief

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Re: Real Estate Investing Mentor
« Reply #1 on: June 20, 2018, 10:53:43 pm »

Ok, perhaps being a mentor is too much commitment. Anyone here who does real estate investing who would be willing to answer the occasional question via pm?
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ricepig

Re: Real Estate Investing Mentor
« Reply #2 on: June 21, 2018, 01:42:44 pm »

Ok, perhaps being a mentor is too much commitment. Anyone here who does real estate investing who would be willing to answer the occasional question via pm?

I own some commercial real estate, I don't mess with any residential property, but would be happy to answer anything.
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aristotle

Re: Real Estate Investing Mentor
« Reply #3 on: June 21, 2018, 02:25:31 pm »

Do your diligence. Get both sales and rent comps. Conduct background and credit checks on any potential tenants.

Do you have any handyman experience?  Can you remodel yourself?  Maintenance costs are an important variable in the cost/profit equation.

Keep an eye on the foreclosure market auctions for equity rich properties. It's a seller's market in NWA and most growth-based regions right now. Be patient and selective. Are you cash heavy or are you financing/cash flowing?

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The Chief

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Re: Real Estate Investing Mentor
« Reply #4 on: June 21, 2018, 03:07:24 pm »

Do your diligence. Get both sales and rent comps. Conduct background and credit checks on any potential tenants.

Do you have any handyman experience?  Can you remodel yourself?  Maintenance costs are an important variable in the cost/profit equation.

Keep an eye on the foreclosure market auctions for equity rich properties. It's a seller's market in NWA and most growth-based regions right now. Be patient and selective. Are you cash heavy or are you financing/cash flowing?



Looking for high equity- high cash flow. Lease options are an intriguing prospect.
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aristotle

Re: Real Estate Investing Mentor
« Reply #5 on: June 21, 2018, 03:25:07 pm »

Looking for high equity- high cash flow. Lease options are an intriguing prospect.

Commercial or resi/MF?   

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golf2day

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Re: Real Estate Investing Mentor
« Reply #6 on: June 22, 2018, 05:49:34 am »

Looking for high equity- high cash flow. Lease options are an intriguing prospect.
Iíll be the Dutch uncle for a minute; ignore me if you want. You seem like a smart guy from your posts on here, so I assume youíve done your homework. Unfortunately Iíve had a lot of clients who were smart people who just glossed over the details getting into real estate. So here goes-

You say high equity, high cash flow. Great buzzwords, but what do they mean? High equity means you owe less than itís worth. You get that via three methods,
1) buy at a great price. We saw this in Ď08 and Ď09. The people witj enough cheddar and balls to put money into real estate at that time earned great profits. They bought into equity due to prices being so compressed. Today is a whole Ďnother world.
2) you make improvements yourself, or are able to hire improvements done that cost you less than the value-added. The bad part about you hiring improvements done is that the bank will almost never give you cash for renovations, so that comes out of your pocket. Yes, you will be able to increase your rent, but you wonít see a real return on your money outlayed until you sell the home years down the road.
3) time. You pay the mortgage, the renter pays you, time marches on. One day you wake up and you owe way less than what itís worth.

So what do you mean when you say high equity, high cash flow?

Also, I urge you to think like a business. They have what is referred to as their core competency. That is what you do the best that will make you money. In real estate it could be that you are a fantastic eye for deals coupled with being a great negotiator, or maybe youíre a handyman with plenty of free time who can fix the issues that come up in rent houses without giving away a chunk of your profits to someone else. Maybe you have an in with a bank that does a ton of foreclosures and theyíll give you first dibs on their houses. Whatever it is, figure it out. Hone it. Lean on it. Thatís what will give you your edge.

Now, the reality of real estate investing. How much liquid cash do you have? If itís not enough to come close to outright buying houses yourself then you need a bank. So you will have mortgages on these houses, no big deal. There is a spread between rents and mortgages, so you will make money there. However, once you factor in repairs and the periods of time between renters where youíre making the mortgage payment yourself with no rent coming in, it wonít be as big of a spread as you hope. If youíre smart, you wonít spend a dime of your rent/mortgage spread until youíve built up enough of a cushion to withstand a prolonged period of time with no renters.

Real estate investing is a solid game if you have the proper expectations. The rents coming in each month will not make you rich. They wonít even earn you extra money for quite awhile if youíre smart about it. You make money in real estate with the long game. You buy solid houses at smart prices, pick stable renters (I recommend military people, if they mess your house up you can get that money back out of them pretty easy), you find a contractor that you work exclusively with who will give you good prices (or do it yourself) and you let the earth spin. In 30 years you will have houses that are paid off and you can sell em and move to a beach somewhere.

Porkys Revenge

Re: Real Estate Investing Mentor
« Reply #7 on: June 22, 2018, 07:27:09 am »

I only invest in farmland/recreational property but it works really well. Often, I buy knowing that the land is worth 2 to 3 times what Iím paying. Kansas has been hot since 2002. Paid $900/acre for a farm and sold it for $3750 last year.
You have to get out and knock on doors and make calls. You donít find the good buys online or listed w a realtor.

Get the LandGlide app for your phone. Use it. The address where the tax records are mailed to is listed there. When I see an out of state landowner, I focus on that. Many farms are inherited by people that have never even been to the land and arenít getting much return.

I bought 2 farms last year. One was for $800 acre that is getting zeroed for rice ground. It took 26 signatures, from 8 different states but luckily, I got it done. The other piece, a large tract of hardwood timber bordering a WMA, was purchased for $1166/acre. Owners were from Houston.

Looking at another farm right now for $2500/acre. Owner from Ca. passed away recently and is going through probate.

Thereís lot of opportunity out there once you get the hang of it. And I always do 1031 exchanges when I sell and roll the proceeds into more land, tax free.
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The Chief

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Re: Real Estate Investing Mentor
« Reply #8 on: June 22, 2018, 09:35:37 am »

Iíll be the Dutch uncle for a minute; ignore me if you want. You seem like a smart guy from your posts on here, so I assume youíve done your homework. Unfortunately Iíve had a lot of clients who were smart people who just glossed over the details getting into real estate. So here goes-

You say high equity, high cash flow. Great buzzwords, but what do they mean? High equity means you owe less than itís worth. You get that via three methods,
1) buy at a great price. We saw this in Ď08 and Ď09. The people witj enough cheddar and balls to put money into real estate at that time earned great profits. They bought into equity due to prices being so compressed. Today is a whole Ďnother world.
2) you make improvements yourself, or are able to hire improvements done that cost you less than the value-added. The bad part about you hiring improvements done is that the bank will almost never give you cash for renovations, so that comes out of your pocket. Yes, you will be able to increase your rent, but you wonít see a real return on your money outlayed until you sell the home years down the road.
3) time. You pay the mortgage, the renter pays you, time marches on. One day you wake up and you owe way less than what itís worth.

So what do you mean when you say high equity, high cash flow?

Also, I urge you to think like a business. They have what is referred to as their core competency. That is what you do the best that will make you money. In real estate it could be that you are a fantastic eye for deals coupled with being a great negotiator, or maybe youíre a handyman with plenty of free time who can fix the issues that come up in rent houses without giving away a chunk of your profits to someone else. Maybe you have an in with a bank that does a ton of foreclosures and theyíll give you first dibs on their houses. Whatever it is, figure it out. Hone it. Lean on it. Thatís what will give you your edge.

Now, the reality of real estate investing. How much liquid cash do you have? If itís not enough to come close to outright buying houses yourself then you need a bank. So you will have mortgages on these houses, no big deal. There is a spread between rents and mortgages, so you will make money there. However, once you factor in repairs and the periods of time between renters where youíre making the mortgage payment yourself with no rent coming in, it wonít be as big of a spread as you hope. If youíre smart, you wonít spend a dime of your rent/mortgage spread until youíve built up enough of a cushion to withstand a prolonged period of time with no renters.

Real estate investing is a solid game if you have the proper expectations. The rents coming in each month will not make you rich. They wonít even earn you extra money for quite awhile if youíre smart about it. You make money in real estate with the long game. You buy solid houses at smart prices, pick stable renters (I recommend military people, if they mess your house up you can get that money back out of them pretty easy), you find a contractor that you work exclusively with who will give you good prices (or do it yourself) and you let the earth spin. In 30 years you will have houses that are paid off and you can sell em and move to a beach somewhere.

Good news is that my research and study lets me know that you know what you're talking about. I've had a lot of hesitancy about getting into this because of the potential pitfalls you mention.

My definition of high equity depends on the value of the home, but generally a 20-30% equity position at the time of purchase. Those deals are out there, but finding then in the right rental market is key. High cash flow, to me, is around $300-700 per month after all expenses. Again, the right house in the right market is key.

I've owned rental property in the past with no real strategy, so i wasn't maximizing the potential of the property.  I'm much more educated on the subject now which leads me to believe a high rate of success is quite possible.

Thanks for the solid advice.
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The Chief

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Re: Real Estate Investing Mentor
« Reply #9 on: June 22, 2018, 09:37:10 am »

I only invest in farmland/recreational property but it works really well. Often, I buy knowing that the land is worth 2 to 3 times what Iím paying. Kansas has been hot since 2002. Paid $900/acre for a farm and sold it for $3750 last year.
You have to get out and knock on doors and make calls. You donít find the good buys online or listed w a realtor.

Get the LandGlide app for your phone. Use it. The address where the tax records are mailed to is listed there. When I see an out of state landowner, I focus on that. Many farms are inherited by people that have never even been to the land and arenít getting much return.

I bought 2 farms last year. One was for $800 acre that is getting zeroed for rice ground. It took 26 signatures, from 8 different states but luckily, I got it done. The other piece, a large tract of hardwood timber bordering a WMA, was purchased for $1166/acre. Owners were from Houston.

Looking at another farm right now for $2500/acre. Owner from Ca. passed away recently and is going through probate.

Thereís lot of opportunity out there once you get the hang of it. And I always do 1031 exchanges when I sell and roll the proceeds into more land, tax free.

I've been reading about how the best deals are on property that technically aren't for sale until you make an offer. Thanks for the insight.
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The Chief

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Re: Real Estate Investing Mentor
« Reply #10 on: June 22, 2018, 09:39:44 am »

Commercial or resi/MF?   



Residential and maybe duplexes at first. Once I build a sustainable business model, I may sell a few properties and go multifamily. That could foray into commercial, but I'd need to educate myself on that first.
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The Chief

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Re: Real Estate Investing Mentor
« Reply #11 on: June 22, 2018, 09:41:08 am »

 All of this leads me to ask a question. Why don't they teach real life money classes in junior high and high school?

The Chief

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Re: Real Estate Investing Mentor
« Reply #12 on: June 22, 2018, 09:48:07 am »

I own some commercial real estate, I don't mess with any residential property, but would be happy to answer anything.

Thank you. Your experience and judgement would be most appreciated.
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ricepig

Re: Real Estate Investing Mentor
« Reply #13 on: June 22, 2018, 11:17:43 am »

I only invest in farmland/recreational property but it works really well. Often, I buy knowing that the land is worth 2 to 3 times what Iím paying. Kansas has been hot since 2002. Paid $900/acre for a farm and sold it for $3750 last year.
You have to get out and knock on doors and make calls. You donít find the good buys online or listed w a realtor.

Get the LandGlide app for your phone. Use it. The address where the tax records are mailed to is listed there. When I see an out of state landowner, I focus on that. Many farms are inherited by people that have never even been to the land and arenít getting much return.

I bought 2 farms last year. One was for $800 acre that is getting zeroed for rice ground. It took 26 signatures, from 8 different states but luckily, I got it done. The other piece, a large tract of hardwood timber bordering a WMA, was purchased for $1166/acre. Owners were from Houston.

Looking at another farm right now for $2500/acre. Owner from Ca. passed away recently and is going through probate.

Thereís lot of opportunity out there once you get the hang of it. And I always do 1031 exchanges when I sell and roll the proceeds into more land, tax free.

Where did you buy $800/acre ground that could be made into rice production? You aren't buying in NEA, lol.
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Re: Real Estate Investing Mentor
« Reply #14 on: June 22, 2018, 08:26:46 pm »

Iíve stumbled upon some questions that Iíve had for some time.

Thanks guys.
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Re: Real Estate Investing Mentor
« Reply #15 on: June 22, 2018, 09:45:38 pm »

I only invest in farmland/recreational property but it works really well. Often, I buy knowing that the land is worth 2 to 3 times what Iím paying. Kansas has been hot since 2002. Paid $900/acre for a farm and sold it for $3750 last year.
You have to get out and knock on doors and make calls. You donít find the good buys online or listed w a realtor.

Get the LandGlide app for your phone. Use it. The address where the tax records are mailed to is listed there. When I see an out of state landowner, I focus on that. Many farms are inherited by people that have never even been to the land and arenít getting much return.

I bought 2 farms last year. One was for $800 acre that is getting zeroed for rice ground. It took 26 signatures, from 8 different states but luckily, I got it done. The other piece, a large tract of hardwood timber bordering a WMA, was purchased for $1166/acre. Owners were from Houston.

Looking at another farm right now for $2500/acre. Owner from Ca. passed away recently and is going through probate.

Thereís lot of opportunity out there once you get the hang of it. And I always do 1031 exchanges when I sell and roll the proceeds into more land, tax free.

Check PM please.
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aristotle

Re: Real Estate Investing Mentor
« Reply #16 on: June 23, 2018, 09:02:01 am »

Residential and maybe duplexes at first. Once I build a sustainable business model, I may sell a few properties and go multifamily. That could foray into commercial, but I'd need to educate myself on that first.

For sure. Starting at duplexes/MF is a good bet. I like to put enough down to have one side pay the mortgage, and one side pure cashflow. I don't know how much you want to finance, and there may be some banking gurus on here that can clarify, but seems like most mortgages for duplexes are going to be 5-7 year ARMS. And we are in an rising interest rate environment, so you'll have to mitigate that eventuality.
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Re: Real Estate Investing Mentor
« Reply #17 on: June 23, 2018, 03:09:35 pm »

Iím an real estate agent in VA and Iíd give my 2 cents but honestly, all of the advice given so far is really solid.

Get rich quick by flipping us possibke but more risky. As mentioned before though, putting together a long term plan with solid rentals will create residual income that will pay major dividends in the future if your up to the headaches of tenants.

Both are feasible. You just HAVE to do your homework and be smart with the areas you buy.
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Re: Real Estate Investing Mentor
« Reply #18 on: June 25, 2018, 08:06:10 am »

Iím an real estate agent in VA and Iíd give my 2 cents but honestly, all of the advice given so far is really solid.

Get rich quick by flipping us possibke but more risky. As mentioned before though, putting together a long term plan with solid rentals will create residual income that will pay major dividends in the future if your up to the headaches of tenants.

Both are feasible. You just HAVE to do your homework and be smart with the areas you buy.

Iím fascinated by the real estate market.
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Re: Real Estate Investing Mentor
« Reply #19 on: June 25, 2018, 10:18:21 am »

downtown Springdale (Emma and south of Emma) is a hot prospect area right now

Been some crime in that area in the past, so an investor must be willing to take a chance on that not being cleaned up yet (and maybe it is already, I don't know, but driving the area in the daytime, you see nothing but good working class folks)
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Re: Real Estate Investing Mentor
« Reply #20 on: June 25, 2018, 10:41:40 am »

I think alot of people would suggest going Air BNB over monthly rentals - especially in NWA
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Re: Real Estate Investing Mentor
« Reply #21 on: June 25, 2018, 11:51:36 am »

I think alot of people would suggest going Air BNB over monthly rentals - especially in NWA
I've thought about a condo on 30A for AirBNB/VRBO purposes, and then use it a few weeks a year.
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Rudy Baylor

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Re: Real Estate Investing Mentor
« Reply #22 on: June 25, 2018, 01:32:25 pm »

I've thought about a condo on 30A for AirBNB/VRBO purposes, and then use it a few weeks a year.


what's 30A?

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woodrow hog call

Re: Real Estate Investing Mentor
« Reply #23 on: June 25, 2018, 02:17:01 pm »


what's 30A?



Highway in Fl that runs along the coast. (I think West coast)
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Re: Real Estate Investing Mentor
« Reply #24 on: June 25, 2018, 02:45:49 pm »

Highway in Fl that runs along the coast. (I think West coast)


they must have renamed it

yeah that would be an awesome thing to have

my brother bought a condo in Bay St Louis that they need to do the same thing with
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ricepig

Re: Real Estate Investing Mentor
« Reply #25 on: June 25, 2018, 02:50:55 pm »


they must have renamed it

yeah that would be an awesome thing to have

my brother bought a condo in Bay St Louis that they need to do the same thing with

Nope, been that way for years. You probably stick to US 98, huh?
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Re: Real Estate Investing Mentor
« Reply #26 on: June 25, 2018, 02:53:43 pm »

my brother bought a condo in Bay St Louis that they need to do the same thing with

Bay St. Louis. That was ground zero for Katrina. New construction I'm guessing?
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Re: Real Estate Investing Mentor
« Reply #27 on: June 25, 2018, 03:21:43 pm »

Nope, been that way for years. You probably stick to US 98, huh?

I lived in New Orleans 20 years ago and I'd drive the coast on the weekends - 90 and then 98 after Mobile

coastline taking the slow route
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Re: Real Estate Investing Mentor
« Reply #28 on: June 25, 2018, 03:23:28 pm »

Bay St. Louis. That was ground zero for Katrina. New construction I'm guessing?

not sure
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Re: Real Estate Investing Mentor
« Reply #29 on: June 25, 2018, 04:30:05 pm »

Highway in Fl that runs along the coast. (I think West coast)
Yep, basically from Destin to Panama City Beach.
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Re: Real Estate Investing Mentor
« Reply #30 on: June 25, 2018, 04:41:09 pm »

Nope, been that way for years. You probably stick to US 98, huh?
[/quote

You own a place don't there, correct? Do you rent it out, or just for personal use?
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ricepig

Re: Real Estate Investing Mentor
« Reply #31 on: June 25, 2018, 05:28:11 pm »



You own a place don't there, correct? Do you rent it out, or just for personal use?

We don't rent it out, too many family members and growing use it. It's about like a rental, you have to draw for your weeks, lol.
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Karma

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Re: Real Estate Investing Mentor
« Reply #32 on: June 25, 2018, 08:24:55 pm »

We don't rent it out, too many family members and growing use it. It's about like a rental, you have to draw for your weeks, lol.
Good problem to have.
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Re: Real Estate Investing Mentor
« Reply #33 on: June 26, 2018, 09:28:36 pm »

Iím here in gulf shores Alabama for vacation and I am thinking of buying a condo in about 4 years when our house is paid off.  Cost us 2250 between my family and my brothers family for a week. Looked around and see that some of these condos are close to the price I paid for my house.
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Re: Real Estate Investing Mentor
« Reply #34 on: June 28, 2018, 02:15:45 pm »

Iím here in gulf shores Alabama for vacation and I am thinking of buying a condo in about 4 years when our house is paid off.  Cost us 2250 between my family and my brothers family for a week. Looked around and see that some of these condos are close to the price I paid for my house.
Bet you can't rent your house for $2,250 per week.
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Re: Real Estate Investing Mentor
« Reply #35 on: June 28, 2018, 02:58:27 pm »

Bet you can't rent your house for $2,250 per week.

Nope. Probably could do that per month, but no way I am getting that much a week.  I have about 4 years to think about it.  I want to have no bills left when I decide to do something like that.  Plus I also need to find out how all of that stuff works with a condo. 
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Re: Real Estate Investing Mentor
« Reply #36 on: June 28, 2018, 03:21:27 pm »

Nope. Probably could do that per month, but no way I am getting that much a week.  I have about 4 years to think about it.  I want to have no bills left when I decide to do something like that.  Plus I also need to find out how all of that stuff works with a condo. 
Agree. It's a lot of research that I also haven't had the time or inclination to do.
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Re: Real Estate Investing Mentor
« Reply #37 on: June 30, 2018, 12:42:20 pm »

Working on my real estate licensing now.

With my bachelors in nursing, I have a lot of flexibility options to keep an income while working on side income with sales and purchasing income property.

Itís an exciting venture.
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AnonymousHog

Re: Real Estate Investing Mentor
« Reply #38 on: July 06, 2018, 11:09:25 pm »

Iím here in gulf shores Alabama for vacation and I am thinking of buying a condo in about 4 years when our house is paid off.  Cost us 2250 between my family and my brothers family for a week. Looked around and see that some of these condos are close to the price I paid for my house.

Be careful of some of the HOA situations down there. I looked for a condo for awhile down there to get some expenses to help with taxes. I had some friends that have some screwed over situations dealing with the HOAs there.
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HiggiePiggy

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Re: Real Estate Investing Mentor
« Reply #39 on: July 06, 2018, 11:29:12 pm »

Be careful of some of the HOA situations down there. I looked for a condo for awhile down there to get some expenses to help with taxes. I had some friends that have some screwed over situations dealing with the HOAs there.

Thanks.  I will watch for that.  Still have a ways to go before I actually get to it. 
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hoglady

Re: Real Estate Investing Mentor
« Reply #40 on: July 08, 2018, 03:47:21 pm »

Friends,

If any of you have extensive real estate investment experience and would be willing to provide mentorship to me, I'd be most appreciative.  After several books and much research, I'm ready to begin forming my team to foray into the real estate investment properties.

If you don't want to respond here, feel free to PM.  Thanks in advance.

My advice is to find your mentor locally.
You need someone familiar with properties and values where you live.
Find a mentor who currently invests in real estate or a realtor that specializes in investment properties (an REO agent is a good place to start).
Regular residential sales and REO sales are worlds apart.
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The Chief

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Re: Real Estate Investing Mentor
« Reply #41 on: July 08, 2018, 05:22:07 pm »

My advice is to find your mentor locally.
You need someone familiar with properties and values where you live.
Find a mentor who currently invests in real estate or a realtor that specializes in investment properties (an REO agent is a good place to start).
Regular residential sales and REO sales are worlds apart.


My problem is that I need to find a few mentors.  Basically, I'm going for the regions that I will be living in and near in the future, as well as locations where I have lived in the past.  I'm not really looking for backyard opportunities at the moment.

Correct me if I'm wrong, but I believe you are a realtor?
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hoglady

Re: Real Estate Investing Mentor
« Reply #42 on: July 09, 2018, 09:40:56 am »

My problem is that I need to find a few mentors.  Basically, I'm going for the regions that I will be living in and near in the future, as well as locations where I have lived in the past.  I'm not really looking for backyard opportunities at the moment.

Correct me if I'm wrong, but I believe you are a realtor?

Yes - 36 years.
I pretty much work mostly with REO properties for the last 15 years.
Had many investors that were heavy into the market during the 2008 crash- so first hand knowledge of every mistake made that left too many in bankruptcy. (the killer for most were the annually renewable notes that when the market collapsed were no longer renewed)

I was lucky - I only had 1 flip house when the market crashed.

My partner and I had the loan papers in hand to borrow money to purchase more homes - so thankful we were dragging our feet.




 
« Last Edit: July 09, 2018, 10:33:22 am by hoglady »
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jst01

Re: Real Estate Investing Mentor
« Reply #43 on: July 13, 2018, 07:49:07 am »

I would echo the fact that residential rental properties should be looked at as long term/tax savings strategies.  My current real estate strategy is to hold the single family rentals for long-term, not expecting any kind of real cash flow for a while.  Hopefully the properties will show a net loss each year and that loss on the Schedule E will pull down my AGI and lower my taxes owed. 

While that is going on, short-term is getting foreclosures or homes with plenty of deferred maintenance to renovate and flip. Usually can make 25 - 35% profit over a 4 month period in the right situation. You can either use your profits to pay off the loans on the rentals and then have complete cash flow coming in...or keep the liquidity and turn it into more flips and not need to finance the flip houses.  But most lenders offer 12 months interest only and will let you borrower up to 85% of "as completed" appraised value, so borrowing on flips isn't even that expensive.
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aristotle

Re: Real Estate Investing Mentor
« Reply #44 on: July 13, 2018, 08:33:42 am »

Thanks.  I will watch for that.  Still have a ways to go before I actually get to it. 

Condos are usually organized into a Horizontal Property Regime development.... Meaning you will own title to the structure only (the unit) and pay a pro-ration for community amenities, common property, and maintenance concerns. Those are variables that can increase on you. Just FYI

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AirWarren

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Re: Real Estate Investing Mentor
« Reply #45 on: July 13, 2018, 10:40:15 am »

I would echo the fact that residential rental properties should be looked at as long term/tax savings strategies.  My current real estate strategy is to hold the single family rentals for long-term, not expecting any kind of real cash flow for a while.  Hopefully the properties will show a net loss each year and that loss on the Schedule E will pull down my AGI and lower my taxes owed. 

While that is going on, short-term is getting foreclosures or homes with plenty of deferred maintenance to renovate and flip. Usually can make 25 - 35% profit over a 4 month period in the right situation. You can either use your profits to pay off the loans on the rentals and then have complete cash flow coming in...or keep the liquidity and turn it into more flips and not need to finance the flip houses.  But most lenders offer 12 months interest only and will let you borrower up to 85% of "as completed" appraised value, so borrowing on flips isn't even that expensive.

This is good information.


So. Question for you.

Whatís the best move? Starting out with one rental in a good rent area, pay it off with cash flow then acquire another one?

Also, is there a magic number for ďtoo many rent house headachesĒ.
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jst01

Re: Real Estate Investing Mentor
« Reply #46 on: July 13, 2018, 11:05:04 am »

This is good information.


So. Question for you.

What’s the best move? Starting out with one rental in a good rent area, pay it off with cash flow then acquire another one?

Also, is there a magic number for “too many rent house headaches”.

Well it would take way too long to pay off a rental with the excess cash flow from that rental..most loans will be 15 or 20 year mortgages and you cant wait that long to pay it off. 

The best way in my opinion to start creating equity and wealth is to find a property that will pay you over 1.4x rent / debt ($1000 rent / $700 mtg payment = 1.42).  The higher the debt coverage the better.  And if financially possible, make EXTRA PAYMENTS or even double mtg payments.  You might pay off a $70,000 loan in 6 years instead of 15 years..and then you own that house debt free. So now take that income from the house you paid off and now make double payments on another rental property you own.  Before you know it, you have a snowball effect and can pay off multiple properties in a couple years time.  But it takes several years to get to that point.

And as for "too many".. many investors utilize management companies to run their properties once they get to a certain level. Some investors start their own management company once they get really big by hiring an accountant and maintenance employees, etc.   I guess it depends on how handy you are, how much free time you have for doing business and what your personal limits may be.
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AirWarren

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Re: Real Estate Investing Mentor
« Reply #47 on: July 13, 2018, 01:46:09 pm »

Excellent thank you very much.

Iím in the infancy stage of this process. So Iím open to all knowledge.
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HiggiePiggy

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Re: Real Estate Investing Mentor
« Reply #48 on: July 13, 2018, 05:26:56 pm »

Condos are usually organized into a Horizontal Property Regime development.... Meaning you will own title to the structure only (the unit) and pay a pro-ration for community amenities, common property, and maintenance concerns. Those are variables that can increase on you. Just FYI



I might just end up going to residential rentals again.  I rented out a house for 5 years and it went well. 
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hoglady

Re: Real Estate Investing Mentor
« Reply #49 on: July 14, 2018, 03:02:13 pm »

This is good information.


So. Question for you.

Whatís the best move? Starting out with one rental in a good rent area, pay it off with cash flow then acquire another one?

Also, is there a magic number for ďtoo many rent house headachesĒ.

I know this wasn't directed toward me.

Too many rent house headaches just leads to hiring a management firm.
And sometimes that's the easiest and best course anyway.
If you're a softy (like me) and start feeling sorry for the kids or whatever / don't manage your property yourself.

Business all the time, never personal and DO NOT rent to friends or family.
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