younginvestor2013
Recycles dryer sheets
- Joined
- Feb 6, 2013
- Messages
- 226
Thanks for all of your encouraging words and comments.
When I look at my scenario at a high level, the two biggest things holding me back from making any moves are primarily:
1) My indecisiveness/uncertainty on where I will live long term
2) My lack of business idea/plan
#1 above could be mitigated if I were to start an online business.
I am attracted to the idea of buying real estate, but as I mentioned, I don’t want to make a big decision and then move. Unless I put a substantial amount of cash down (more than 20%), my budget ($200-250k) only gets me a condo which are subject to HOAs, special assessments, and general lack of control. I’ve thought about buying a two or three flat (for those of you familiar with the Chicago RE market….), but those run anywhere from $500k and up. And, usually most two/three flats are older and require a lot of maintenance. There are some new construction two/three flats, but regardless (as I mentioned), they are pricey.
I’ve thought about going the condo route where I would live in the condo at first, then rent it out at a later date, if necessary. However, all of my research has shown that condos are simply not good investments (low to basically 0% cap rates). So, if I do buy a condo, I wouldn’t buy it as an investment vehicle.
As far as franchises go:
I will admit I am largely unfamiliar with the franchising business. I also am aware that you are still succumbed to corporate’s policies and processes. However, I would imagine it is not that “black and white”; I would imagine that with more “up and coming” franchises there is a little more subjectivity/lack of defined processes. For example, I have a distant acquaintance who opened up a Mexican franchise in Colorado (he is not the franchisor but a franchisee). Since there are only 5 locations aside from his, he was able to receive some sort of franchising rights over his territory. I’m not exactly sure of the stipulations, but I think it is something like he is the only franchisee allowed to open more in a specified territory; and, if anyone wants to they are either not permitted to or (if he chooses to allow it) he gets a cut of the royalties. Again I’m not exactly sure. Regardless, I think going with an “up and coming” franchise would be a little bigger of a risk (perhaps less start up costs though?) but might result in more control and potential success. On the other hand, opening a McDonald’s would probably cost more (I’ve heard their start up costs near $1m), but might result in almost guaranteed profits yet with more control exerted by corporate.
When I look at my scenario at a high level, the two biggest things holding me back from making any moves are primarily:
1) My indecisiveness/uncertainty on where I will live long term
2) My lack of business idea/plan
#1 above could be mitigated if I were to start an online business.
I am attracted to the idea of buying real estate, but as I mentioned, I don’t want to make a big decision and then move. Unless I put a substantial amount of cash down (more than 20%), my budget ($200-250k) only gets me a condo which are subject to HOAs, special assessments, and general lack of control. I’ve thought about buying a two or three flat (for those of you familiar with the Chicago RE market….), but those run anywhere from $500k and up. And, usually most two/three flats are older and require a lot of maintenance. There are some new construction two/three flats, but regardless (as I mentioned), they are pricey.
I’ve thought about going the condo route where I would live in the condo at first, then rent it out at a later date, if necessary. However, all of my research has shown that condos are simply not good investments (low to basically 0% cap rates). So, if I do buy a condo, I wouldn’t buy it as an investment vehicle.
As far as franchises go:
I will admit I am largely unfamiliar with the franchising business. I also am aware that you are still succumbed to corporate’s policies and processes. However, I would imagine it is not that “black and white”; I would imagine that with more “up and coming” franchises there is a little more subjectivity/lack of defined processes. For example, I have a distant acquaintance who opened up a Mexican franchise in Colorado (he is not the franchisor but a franchisee). Since there are only 5 locations aside from his, he was able to receive some sort of franchising rights over his territory. I’m not exactly sure of the stipulations, but I think it is something like he is the only franchisee allowed to open more in a specified territory; and, if anyone wants to they are either not permitted to or (if he chooses to allow it) he gets a cut of the royalties. Again I’m not exactly sure. Regardless, I think going with an “up and coming” franchise would be a little bigger of a risk (perhaps less start up costs though?) but might result in more control and potential success. On the other hand, opening a McDonald’s would probably cost more (I’ve heard their start up costs near $1m), but might result in almost guaranteed profits yet with more control exerted by corporate.
