Real estate as an investment

[MRGALT2U]

Hi Wayne! Thanks for your input. You don't have all the details, but that's because I did not provide them.
Anyway, you make a good case for just keeping the
house as rental property when we get done using it
ourselves. That would avoid any capital gains
tax issues indefinitely.

This may be the only message I write here, and I'm not
too good with computers, but here goes. After I finished
college I worked a bunch of jobs at the same time to save some money. This was in silicon valley before the house prices went crazy(graduated with a degree in marine biology in 1985). I first bought one rental house, then had my parents trade some land for a four-plex. After a couple of years we traded both for a 14 unit apartment. After about 5 years we traded into part ownership of a 68 unit building. Right after that the rents went crazy! We didn't gouge our tenants though. When I was 35, and my first child was due in two weeks, I quit! I hated my low paying job, and we got by on a tight budget. Within a year the rental income was about 5 times my income. Now it's almost 10 times. It's been 5 years, we have a 4 year old and a 1 year old keeping us so busy!!!! All my real estate deals did not make money, but if you're in the right property at the right time it can work. Good luck

[thebacchus]

Real Estate definately isn't for everyone, although neither are stocks, bonds, cd's, etc.

I have been slowly building a small real estate company while running the other company that supports us and our investment strategy. Currently we are only up to three properties (1 commercial, 2 residential). My hope is to sell my other company in 3-5 years and live off our investments as well as run this company 20-30 hours per week. (Yes, this is ER for the workaholics among us that work 60-80/wk.)

In my current position, the tax advantages make the income form this company very advantagis. My hope is that this entity will also produce tax advantages that will help further in the ER stage while we live off our portfolio income.

Are tenants a pain? They can be, but aren't most people who are paying you money? (ie. job?)

Regards & Best Wishes,

Bob

[RYD]

Has anyone has found a web site for small RE investors. We hae some residential rentals but have never found a site that address this market.


RYD

[wzd]

RYD - Not a lot of info, but I have used landlord.com to look up some rule in CO, and for browsing thru information.

Also loopnet.com has real estate listings, which I use for information. You have to subscribe to get full listings, but the free ones are fine for my purposes.

You didn't say what kind of info you were looking for - property info, management info, etc. I found the book 'every landlords legal guide" useful.

There are also landlords associations, but I have not pursued joining any of them. The one near me sounds good, but I'm not sure it is worth the expense.

Wayne

[thebacchus]

I haven't found a ttuly "solid" website in and of itself for Real Estate investing. I think the old adage holds true, anyone on the internet can claim to be an expert.

Mostly, I model the successes of others that have been there. Seems to be working so far. My current venture is single family HUD foreclsures, of which there are quite a few these days.

Perhaps this forum would serve us well as a new website?

[MRGALT2U]

Although a fair amount of my meager pile was the
result of real estate investing, I was never involved in a big way, at least as far as my day to day activities were concerned.
I always felt comfortable with real estate, but mostly just "danced around the edges" and got lucky a few times. I thought at one time that this would be my
"part time work" after I semiretired. Didn't turn out that
way. Although I am still most interested in real estate
in all its forms, any active participation is behind me now. It's mostly an age/energy level thing. Interesting
that I feel like I built up a huge stockpile of real estate
knowledge. Probably enough for a couple of books at least. Alas, too lazy now to write them.

[baanista]

We have been working with someone who manages a number of rentals. What we have learned is that we have neither the people skills or the handyman skills to be effective at this. If all you can bring to the table is money, you should probably stick to REIT's.

[BUM]

I'm considering a "fixer-upper" deal. Buy a single family home in coastal carolina $150k or so... landscape, new kitchen, some paint, carpets. List for $225K six months later.

SOMEBODY talk me out of it!

BUM

[JWR1945]

Here are two points to talk you out of it.

Can you fix it up and sell it before hurricane season?

Fixer-uppers can be profitable, but not if you sell them as fixer-uppers.

I have known several people who have overestimated their willingness to finish the job. They got exhausted about a third of the way through. Don't buy something challenging. Buy something very simple. It will turn out to be as much as you can handle.

Have fun.

John R.

[wabmester]

My rule of thumb is to buy properties where most of the value is in the land rather than in the house, and that's generally the case with anything "coastal". The other nice thing about costal land is supply and demand. I've never seen the supply go up or the demand go down.

As far as fixers go, my only caveat would be to watch out for water damage. It's amazing how pervasive water damage can be. Inevitably, it'll have destroyed something structural. And if you thought building a house from scratch was hard, try replacing structural members while the structure is already in place.

I have owned all kinds of real estate in four different states. Through good luck (or maybe I made my own luck), in recent years it has been mostly waterfront
or at least water view. We currently own our main home
on a big river in Illinois, a condo we just bought in Texas
which is a chip shot from the largest lake in the state,
and the "Ranch", also in Texas and close to the same lake. No water on that property unless you count the 2 stock ponds
which are real pretty except in dry seasons. This stuff is about 50% of my net worth and currently has a negative
cash flow. However, it is all well located and "bought right" so I am quite comfortable with it. Can see why
others might not be however.

John Galt

This happened yesterday. I noticed that one of the
neighbors has put their place up for sale, so I stopped and picked up an info sheet from the little box attached
to the "FOR SALE" sign. 200 feet of river frontage
and 2 cottages (smaller but nice) for $129,900!!!!!!!!!!!
When I got home and showed my wife, she says
"Let's buy it, that's the deal of the century!" Well, I agree it's the deal of the century, or something close.
However (A) I am "land poor" at the moment (B)
I am trying to simplify my life and (C) No matter how you
slice it this looks like work to me. Ten years ago
the sellers would have had my offer by now. Five
years ago I would have been crunching numbers
furiously. Now, I will happily let someone else buy it.

John Galt

[cute fuzzy bunny]

On the other hand, what you've been doing so far has been working for you...so why change now

Place needs work? Find a nice couple that you can let live in the property rent free in exchange for a maintenance and repair schedule. Hire a management company to rent it out.

Just buy it, tweak it a little, raise the sales price to make a small profit and wait for the sale.

Hello Cut-throat! I owned a bunch of land here in
Illinois. We only used it for hunting and I don't hunt any more. I sold it all over the past 2 years and moved all
the money into Texas real estate, which entails more
bother and more expense. However, I think it will work out just
fine. Stay tuned for periodic updates.

John Galt