So I want to get into real estate investing

TaterGator

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I bought my house 3 years ago with a VA loan (0 down) that is the only actual experience I have. I have read a few books (I'll list them if yall want to know), and I have watched 100's of YouTube videos. I only have about 5k cash and am not trying to get rich quick. My wife is going back to work after 8 years, she is getting her real estate license and working with another agent that sold us our home.

My tentative plan is to save as much of her commissions as possible to get enough money to fix&flip houses for a while and keep a rental property when the income for the year is high (for taxes). I am seeking advice from people who are experienced and successful in the real estate market, not merely ambitious and well read people such as myself. If anyone is interested in having their brain picked I'm your guy..
 

Bushmaster

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There is a thread on this. I won't buy a house unless I can get monthly rent of 1.2% of the purchase price. That works for the market I am in. May not work in your area.
 

78

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There is a thread on this. I won't buy a house unless I can get monthly rent of 1.2% of the purchase price. That works for the market I am in. May not work in your area.
What's the net?
 

ChiefGator

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I have no personal experience, but if you don't have resources or talent to both renovate and manage property it is probably not a great idea. If you have these talents and abilities you could make a lot of money. Good Luck!!!
 

divits

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There is a thread on this. I won't buy a house unless I can get monthly rent of 1.2% of the purchase price. That works for the market I am in. May not work in your area.
So you would need $2400/month rent on a house you bought for $200,000? That wouldn't work where I live.
 

divits

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Won't work here either. I try to stay in the 50-60k range and rent at 7-750 range.

You must do all mobile homes. I can't think of any other kind of houses in Central Florida that sell for that amount. Even a $150K house would be falling down and in a terrible neighborhood. I'd have to be packing heat every time I collected rent.
:lol:
 

Bushmaster

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You must do all mobile homes. I can't think of any other kind of houses in Central Florida that sell for that amount. Even a $150K house would be falling down and in a terrible neighborhood. I'd have to be packing heat every time I collected rent.
:lol:


I used to do mobile homes. Great income but lousy way to build wealth. No appreciation in mobile homes and turnover at least twice a year.

These are brick homes, 3 bed 1 bath, built in the 50s and 60s. 1100 sf or so. Central Floida may not be a good market for that.
 

Concrete Helmet

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Even a $150K house would be falling down and in a terrible neighborhood. I'd have to be packing heat every time I collected rent.
I've got one of my rentals in a so so neighborhood, it's sitting about $190K market value at present time. We paid 90K when the market tanked in 09-10...The worse part about renting it out is I no "peeka-panish"....:lol:. It's the first thing every caller ask when inquiring about renting it.
 

Politigator

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1.2% would only work on cheap houses. Our house would probably only pull 0.7%.

Rents here would basically only cover PITI. You would be in the hole for a while and have to wait for appreciation to eventually get you in the black.

While I'm sure some people make a return on this, with house prices on the high side and everybody and their brother wanting to get in the game with real estate income, I would think returns would be thin for all but the most astute.
 

Detroitgator

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I especially love and appreciate it when people who have never done something, and never will, explain in great detail why you can’t do something and why you shouldn’t try something. In fact, I bank on their very existence.
 

Detroitgator

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1.2% would only work on cheap houses. Our house would probably only pull 0.7%.

Rents here would basically only cover PITI. You would be in the hole for a while and have to wait for appreciation to eventually get you in the black.

While I'm sure some people make a return on this, with house prices on the high side and everybody and their brother wanting to get in the game with real estate income, I would think returns would be thin for all but the most astute.
Unless you moved, you live in an area with 7.2 MILLION people. There is plenty of opportunity there. Your first two sentences demonstrate how little you know about this subject because NO real estate investor is “investing” in the types of homes any of us in this forum reside in.
 

Concrete Helmet

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Unless you moved, you live in an area with 7.2 MILLION people. There is plenty of opportunity there. Your first two sentences demonstrate how little you know about this subject because NO real estate investor is “investing” in the types of homes any of us in this forum reside in.
Agree. There will always be a market and profits(maybe not short term)in smaller residential type properties like 2/1, 2/2, 3/2 under 1600 sq ft.
Since most of us start out as that type of house ourselves I think it is smart to keep that house when you move into a bigger one since you've already established a good amount of equity and know the house personally it seems to be a safe way of easing into the roll of "investor".....If you like it then you can draw on that equity to acquire another property without dipping into your savings for a large down payment......rinse and repeat whenever the market allows you to make a smart investment purchase.
 
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Concrete Helmet

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Another important issue I should mention regarding rentals is an emergency fund. I typically keep $5K-$10K per property in a savings account. This will keep you from using other funds or worse credit card for repairs.....When my account gets to $10K per property I take 5K from each out and put it into promotional CD's that you can currently get 3.0-3.30% since I don't like stocks. It makes me feel like I'm recouping some of the mortgage interest that my tenant is paying for me to write off.....:lol:
 

Bushmaster

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As long as rent covers PITI, I am happy someone else is buying me a house.

I am as well, but there is a lot of low hanging fruit where I live so we have focused on those houses where 1.2 is now our base.

Apartment buildings are something I am looking into next. I passed on two that that were out of state but close by. Sort of regret not pulling the trigger, but I operate with no safety net (ie, rich parents who can bail me out), so going on the hook for 3.5 mil is not something to jump into lightly. These were 1.33 factor units but the rents were too cheap for my taste anyway.
 

Bushmaster

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Unless you moved, you live in an area with 7.2 MILLION people. There is plenty of opportunity there. Your first two sentences demonstrate how little you know about this subject because NO real estate investor is “investing” in the types of homes any of us in this forum reside in.


This is so true. You can't do this with homes in great neighborhoods. Great RENTAL neighborhoods YES.

It doesn't take a lot of smarts, just takes a little river boat gambler. The first ones I bought were a bunch of mobile homes. I had to fix them before I could rent them. I never went in that park unless I was armed. I am not talking about keeping a pistol in the truck. The damn thing was strapped on my belt in a holster where it was visible to everyone.
 

Detroitgator

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This is so true. You can't do this with homes in great neighborhoods. Great RENTAL neighborhoods YES.

It doesn't take a lot of smarts, just takes a little river boat gambler. The first ones I bought were a bunch of mobile homes. I had to fix them before I could rent them. I never went in that park unless I was armed. I am not talking about keeping a pistol in the truck. The damn thing was strapped on my belt in a holster where it was visible to everyone.
Just to bring you up to speed, "Politi" (actually "L-Boy") considers you "lucky" and refers to what you are doing in real estate as a "scheme", not an investment opportunity/business.... just so you know what you are dealing with. Also, on your tax discussion, also to bring you up to speed, he's failed at this before by trying to reverse engineer what I stated I paid in Federal Income Tax in 2014 (7 figure number) into what I earned that year. He is well educated (I'd say overly so) and somewhat intelligent, but has zero risk tolerance in life and bristles at those who have taken risk and succeeded. I've often suspected that he actually tried something once, but it didn't work out, he never tried again (for whatever reason), and now poo poos anyone who had the balls to try one or more times and succeeded.
 

78

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Just to bring you up to speed, "Politi" (actually "L-Boy") considers you "lucky" and refers to what you are doing in real estate as a "scheme", not an investment opportunity/business.... just so you know what you are dealing with. Also, on your tax discussion, also to bring you up to speed, he's failed at this before by trying to reverse engineer what I stated I paid in Federal Income Tax in 2014 (7 figure number) into what I earned that year. He is well educated (I'd say overly so) and somewhat intelligent, but has zero risk tolerance in life and bristles at those who have taken risk and succeeded. I've often suspected that he actually tried something once, but it didn't work out, he never tried again (for whatever reason), and now poo poos anyone who had the balls to try one or more times and succeeded.
I'm not going to attempt a backdoor way to guess your 2014 AGI but I may be hitting you up for a loan at some point.
 

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