22 Years Old and wanting more...
- Thread starter geeman
- Start date
geeman,
Where about's do you live? I live in Gambrills, MD [just moved]. Having just purchased a house in the area, let me be the first to inform you that it is quite a sellers market out there. Lot's of buyers, very few sellers. None of the houses we looked at were anywhere close to below market value. I'd say about 1/2 were ridiculously priced for the condition of the house [like carpeting in the bathrooms and kitchen - ewww].
A hot real estate market always brings out the "flipping loonies" with stories of how so and so made gobs of money. Unfortunately, those people that didn't make as much money, or complain about the hard work in fixing up houses, etc., are conspicuously missing from those "paid advertisements."
I would certainly take the recommendations and do some more research before you go enter the world of real estate. There were a whole lot more fees than I had anticipated.
There's nothing wrong with being young and ambitious. But don't get caught up in the get rich quick schemes [like penny stock trading, etc.]. At one time I wanted a cool car as well, but the costs and insurance were much too high. Not too mention that I figured people would think too much about what I was compensating for. I didn't want to be that guy.
Keep on saving, maxing out Roth + TSP, and self-educating on investing, real estate, etc.
- Alec
Where about's do you live? I live in Gambrills, MD [just moved]. Having just purchased a house in the area, let me be the first to inform you that it is quite a sellers market out there. Lot's of buyers, very few sellers. None of the houses we looked at were anywhere close to below market value. I'd say about 1/2 were ridiculously priced for the condition of the house [like carpeting in the bathrooms and kitchen - ewww].
A hot real estate market always brings out the "flipping loonies" with stories of how so and so made gobs of money. Unfortunately, those people that didn't make as much money, or complain about the hard work in fixing up houses, etc., are conspicuously missing from those "paid advertisements."
I would certainly take the recommendations and do some more research before you go enter the world of real estate. There were a whole lot more fees than I had anticipated.
There's nothing wrong with being young and ambitious. But don't get caught up in the get rich quick schemes [like penny stock trading, etc.]. At one time I wanted a cool car as well, but the costs and insurance were much too high. Not too mention that I figured people would think too much about what I was compensating for.
I didn't want to be that guy.Keep on saving, maxing out Roth + TSP, and self-educating on investing, real estate, etc.
- Alec
lets-retire
Thinks s/he gets paid by the post
- Joined
- Dec 28, 2004
- Messages
- 1,798
Your asking for opinions so here's mine. If your interested in real estate investing then invest in your own house first. If after a couple of years if the market is still good then sell and buy better. Of course you will have to save your rear off while owning your house.
The DW works for a mortgage company and has seen several people do this and live in very nice houses many quit thier jobs and do this for thier income. Those who have quit typically have several million in assets. The down side to this is having to move every couple of years. If the market goes south you don't sell and you still have a decent place to live.
My expirience has shown that the best deals are in old rental houses. The lanlords typically keep the houses just up to standards so they can keep renting it. When they go to sell they have to discount the house. If it is not in knockdown condition you can live in it while fixing it up. So far the most inconvienent fix was remodeling the kitchen. We wound up removing the ceiling and most of the drywall.
To sum up...Don't buy the new car until your old one breaks and it is more cost effective to buy a new one, don't invest in real estate until you own your own house, pay cash for all consumables, use credit only to purchase appreciating assets.
The DW works for a mortgage company and has seen several people do this and live in very nice houses many quit thier jobs and do this for thier income. Those who have quit typically have several million in assets. The down side to this is having to move every couple of years. If the market goes south you don't sell and you still have a decent place to live.
My expirience has shown that the best deals are in old rental houses. The lanlords typically keep the houses just up to standards so they can keep renting it. When they go to sell they have to discount the house. If it is not in knockdown condition you can live in it while fixing it up. So far the most inconvienent fix was remodeling the kitchen. We wound up removing the ceiling and most of the drywall.
To sum up...Don't buy the new car until your old one breaks and it is more cost effective to buy a new one, don't invest in real estate until you own your own house, pay cash for all consumables, use credit only to purchase appreciating assets.
Hey I got blasted over my age when I signed on so blast away
geeman I think you need to change your mentality. Being driven is good but being obsessive is not.
Oh yeah I have one for you that fits your criteria. Fly to Vietname, open a savings account and then brokerage account. Buy Vietnam stocks as it seeks potential economic deals with the US and others. Might make a fortune or might lose every friggin cent or you may have trouble getting money out. How does that sound?
geeman I think you need to change your mentality. Being driven is good but being obsessive is not.
Oh yeah I have one for you that fits your criteria. Fly to Vietname, open a savings account and then brokerage account. Buy Vietnam stocks as it seeks potential economic deals with the US and others. Might make a fortune or might lose every friggin cent or you may have trouble getting money out. How does that sound?
I have my 401K information infront of me now. It says...
*an annual variable asset charge of 1.20% is calculated and deducted daily as a part of the unit value of each of my variable investment options.
* your employer matches 1% of your contribution. The employer matching contributuion does not apply to applicable contributions that exceed $1,000.
* In 2005 the before tax contribution amount is 100%, with a minimum of 1%, of your compensation or $14,000 whichever is less. The max contribution amount will increase by $1,000 each year through 2006 to $15,000 then it will be indexed in $500 increments.
* There is a benefit disbursement fee of $50.00
Then I have a list of investment options...
Is this worth investing in
*an annual variable asset charge of 1.20% is calculated and deducted daily as a part of the unit value of each of my variable investment options.
* your employer matches 1% of your contribution. The employer matching contributuion does not apply to applicable contributions that exceed $1,000.
* In 2005 the before tax contribution amount is 100%, with a minimum of 1%, of your compensation or $14,000 whichever is less. The max contribution amount will increase by $1,000 each year through 2006 to $15,000 then it will be indexed in $500 increments.
* There is a benefit disbursement fee of $50.00
Then I have a list of investment options...
Is this worth investing in
Gleeman, that description of benefits is about incomprehensible. Talk to your HR person and ask what it means, with real dollars as an example. It reads as if your employer doesn't have to contribute more than 10 bucks.
Ewww.. I'd check to see if this 1.2% is added on top of the expenses of the investment options. So, if one investment option charges 0.50%, the total fee is 1.7%. Sounds like you've got variable annuities in the 401(k), which are totally inappropriate in that tax deferred account. Yuck. Might be better off getting the match and then using Roth IRA + taxable accounts.
So, I take it you're not a federal employee, but a contractor (?).
- Alec
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
When everyone thinks its a no brainer to 'flip' real estate, chances are pretty good the flare gun that signals the end of the bull market has been fired. You might have another year or two on that money maker, if you live in the right place and there are still people at the bottom of the buyer pile willing to sign up 75% of their gross income to afford the interest-only mortgage on their first home that pushes all the other property prices up a notch. Oh yeah, and a bank willing to write that mortgage.
When I was in my early 20's, I worked 3 jobs. That sucked. But there is a sacrifice and risk component to getting rich quick...
When I was in my early 20's, I worked 3 jobs. That sucked. But there is a sacrifice and risk component to getting rich quick...
geeman,
What I've been doing in real estate is a little different than the normal buy, rehab and sell, or buy wait a few months and sell. The problem with buying real estate is how much you pay for it! If you can buy with a little equity ie 15k or more in equity, then it may be worth a second look to buy. To determine if there's any equity value in a house, there's websites out there that can run comparables for you at a minimal cost. I always try to buy owner financing. If owner financing isn't available, there are investment property loans available assuming the loan to value (LTV) ratio falls below the lender's set percentage (75% sometimes).
Then I lease/option the home out to a new tenant. The tenant puts down between 3K and 20K as an option deposit to buy the house at a price which is usually somewhat higher than current market value (allows for appreciation). Then charge them rent which is around what your payments are. The benefits are 1) the tenant treats the house as their own 2) the tenant pays for all maintenance - no phone calls 3) if tenant decides not to buy the house, the option deposit is non-refundable 4) if house sells, then your profit is locked in. So, assuming you can find 1) find a house that meets the criteria and 2) find a tenant with a little cash to put down, you can make money doing this. The risks are 1) not being able to find a tenant and being stuck with a large lease payment to the owner 2) miscalculating the equity (not a big problem if you have a tenant) Make the lease term short ie 1 year so the option can be renegotiated if there's good appreciation in your area.
Also, get a vision statement of exactly what you want to do and how you want to make money in real estate. If you don't have a game plan, you'll get too distracted by what's out there, and believe me, there's a lot of things out there to distract you.
Best of luck.
What I've been doing in real estate is a little different than the normal buy, rehab and sell, or buy wait a few months and sell. The problem with buying real estate is how much you pay for it! If you can buy with a little equity ie 15k or more in equity, then it may be worth a second look to buy. To determine if there's any equity value in a house, there's websites out there that can run comparables for you at a minimal cost. I always try to buy owner financing. If owner financing isn't available, there are investment property loans available assuming the loan to value (LTV) ratio falls below the lender's set percentage (75% sometimes).
Then I lease/option the home out to a new tenant. The tenant puts down between 3K and 20K as an option deposit to buy the house at a price which is usually somewhat higher than current market value (allows for appreciation). Then charge them rent which is around what your payments are. The benefits are 1) the tenant treats the house as their own 2) the tenant pays for all maintenance - no phone calls 3) if tenant decides not to buy the house, the option deposit is non-refundable 4) if house sells, then your profit is locked in. So, assuming you can find 1) find a house that meets the criteria and 2) find a tenant with a little cash to put down, you can make money doing this. The risks are 1) not being able to find a tenant and being stuck with a large lease payment to the owner 2) miscalculating the equity (not a big problem if you have a tenant) Make the lease term short ie 1 year so the option can be renegotiated if there's good appreciation in your area.
Also, get a vision statement of exactly what you want to do and how you want to make money in real estate. If you don't have a game plan, you'll get too distracted by what's out there, and believe me, there's a lot of things out there to distract you.
Best of luck.
REWahoo
Give me a museum and I'll fill it. (Picasso) Give
comixfan said:
Aaaaaaaaaaarrrrrrrrrrrrrrrrgghhhhhhhhhhh!!!!!!!!
Flashback..deep breaths...just corporate mumbo-jumbo... not real.. you'll be OK... it will go a way if you just don't think about it....
Whew! That was a close one.
REW
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
We might need to revisit that corporate mumbo jumbo generator thread...
REWahoo! said:Aaaaaaaaaaarrrrrrrrrrrrrrrrgghhhhhhhhhhh!!!!!!!!
Flashback..deep breaths...just corporate mumbo-jumbo... not real.. you'll be OK... it will go a way if you just don't think about it....
Whew! That was a close one.
REW
Yeah, I'm working hard so maybe one day, I too can delete all of those annoying buzz words from my vocabulary. sorry dude, just trying to help out a fellow overachiever.
retire@40
Thinks s/he gets paid by the post
- Joined
- Feb 16, 2004
- Messages
- 2,670
Notth said:
Ya, the equities market stinks. It hasn't moved in 5 years. But, boy, you just can't go wrong with real estate. Everyone I know has made TONS of money just buying and selling real estate. You can do it with any kind of real estate, condos, multi-family, even raw land and bridges.
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
retire@40 said:
Slight re-write: replace the words "real estate" with 'internet IPOs' or 'tech stocks'. Shake. Wait 5 years. Rinse and repeat.
Notth said:
You can't live in an internet IPO although some wanted to after ignoring the warning signs. I never bought into the tech stock hype, because there was no underlying value and no earnings. All speculative.
There is underlying value in real estate and always will be. However, eventually even the interest only loans won't be able to support the 30% a year appreciation that we've been seeing. The real estate market is probably headed for a soft landing. In some parts of the country the ride may be a little bumpier ie Cali, NY and Fl.
cute fuzzy bunny
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Sure. But i'm unfamiliar with any boomtown real estate regions where you can "make money for sure, everyone else has!" where the cost of the property is anywhere NEAR the underlying value.
chris2008
Thinks s/he gets paid by the post
Hello,
have a look at "Millioniares in the making" on www.money.com, for example at this one:
http://money.cnn.com/2005/06/13/pf/millionaire/rp_vincent/index.htm
and this:
http://money.cnn.com/2005/05/26/pf/millionaire/rp_tieu/index.htm
Saving and careful plannig is the trick - and not a desire for Porsches at age of 23
Take care,
Chris
have a look at "Millioniares in the making" on www.money.com, for example at this one:
http://money.cnn.com/2005/06/13/pf/millionaire/rp_vincent/index.htm
and this:
http://money.cnn.com/2005/05/26/pf/millionaire/rp_tieu/index.htm
Saving and careful plannig is the trick - and not a desire for Porsches at age of 23
Take care,
Chris
unclemick
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Aw Rite!
No guts - no glory. Do your research - find the old Porsche low production model - not too butt ugly(not a fan here) - that's hit the turn in it's depreciation curve - has a reasonable chance to become a classic - join a club and learn maintance/where the best mechanics are.
Try not to bang it up driving - especially since you have an 'appreciating?' asset.
I did manage to put my XKE off the road a few times in my Colorado days - nothing unfixable though. Sold way too early - no A/C and transferred to New Orleans.
No guts - no glory. Do your research - find the old Porsche low production model - not too butt ugly(not a fan here) - that's hit the turn in it's depreciation curve - has a reasonable chance to become a classic - join a club and learn maintance/where the best mechanics are.
Try not to bang it up driving - especially since you have an 'appreciating?' asset.
I did manage to put my XKE off the road a few times in my Colorado days - nothing unfixable though. Sold way too early - no A/C and transferred to New Orleans.
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