Anyone with experience in buy and hold and rent? Or with house flipping?
I have been watching HGTV recently and am therefore an expert.
Want to get some stories and advice. Thinking about putting a down payment on a triplex and not living it it; 25% and first time property manager. Bad idea?
ah, I been thinking about this myself.
the thing is, is ...money. you need money. start saving chum. you don't want to get in debt and then lose it all like a dummy, and end up rip.
better to save up, try it out, if it works, ka ching! if it don't ...start over :(
What?
i can make the same amount of money investing in an reit unless the property value is increasing 5%+ a year. And those properties have a tendency to already be expensive.
He means you already have to have a big chunk of change available for down payment on a mortgage.
Maybe you can do some creative financing but typical financing you're gonna need cash down payment + cash reserves if you don't have property management experience and it's an investment property.
There's just a part of me that wants to own the underlying asset. I want to have 100% equity in multiple properties. They can cash flow or I can sell them eventually.
But yeah, REIT is lower risk I suppose with comparable short term rewards?
what do you mean what? if you don't get it . this aint for you kid
Buy, hold, and rent is all fine.
DONT get into flipping if you dont know what you are doing, I see way too many amateurs do this and get fucked.
Here's some golden rules of flipping:
1) Assume it will cost much more to fix up than you are anticipating. Assume the worst!
2) Remember taxes, fees, and closing costs when buying and selling the home! You'll lose money on the purchase and the sale!
3) After the fixup costs the, other bullshit, you should be seeking to make at least $50k on a home flip. Any less than this and the small margin will get you into trouble!
I see so many idiots lose their ass. Many fix ups on homes are $50k to $100k. Don't be the idiot that thinks $10k will fix a home.
These things cost a lot:
> flooring
> appliances
> any electrical work or plumbing
> roofing
Can you AT LEAST tell us which country you are in? Fuck, this should be a prereq for ANY real estate thread. Different countries have vastly different RE markets these days.
I've been thinking about this too. I've been building a dividend stock portfolio and like some rental RE. I'm still doing some research in my area.
I would go for renting out commercial, only. No flipping, no developing, and certainly not renting out houses, because most people are pigs.
youtube.com
Anyway, I learned a lot from this huge thread on this different board.
forumserver.twoplustwo.com
>mortgage
that's how you fuck up and turn investment into someone elses investment.
This guy knows what he is talking about.
The only way you can profitably flip houses without luck is to be very experienced with one of the trades (like plumbing) and know a decent amount about the others, so you can minimise the cost. You would then take your time and do as much of it yourself as possible by basically sacrificing your personal life and spare time.
on the tv show it looks easy
Thanks good pieces of advice
Thanks I'll check it out
Just invest in a REIT instead. Less headache.
>not knowing how a mortgage works
selling pays it off retard
unless you fucked up and sold at a loss
well on average buying and selling real estate will result in a net loss but with leverage your losses are multiplied.
Renting is a pain in the ass if you don't get background checks. Immigrants will steal the appliances and you can't find them because they never give their real names.
Don't trust drivers licenses. Anyone can get a drivers license without a birth cert or an SS.
Wtf i don't get it?
With a mortgage, you let your tenants in effect pay the mortgage, while you keep the equity, and sell hopefully at a profit to the initial investment. In effect you are basically leveraging your already accumulated capital into more capital, while the poor/tenant is forced to survive in the current market?
>With a mortgage, you let your tenants in effect pay the mortgage
yeah this is as far as most retard gets in the thought process. but it's wrong. mortgage is just part of the total cost. you have to take the total costs with a home in account which is around 7-8% a year. if you can rent it out for more than that you hit jackpot. but most places you won't be able to. in murrica there are places where you can turn a decent profit over this, in my country you would bleed out the ass.
but to give you an example what is wrong with leverage:
you pay 20% down, and you pay 3% mortgage and 5% cost on the total value of your real estate.
that means relative to your investment you pay 40% in costs. it's fucking insane. meanwhile you get 1% in rent (which is quiet good it's half of that here) which you multiply by 5 also because leverage. so 5% in 40% out. great fucking deal. even with the equity you get this is a nightmare unless rent prices are super high.
sorry i'm tired i forgot to multiply the rent by 12, so it's 60% in 40% out yeah but that's like i said at super high rents.
i'm paying something like 0.39% rent, with that the figures would be 23,4% in and 40% out. while it technically covers the mortgage you will as i said bleed out your ass all things considered.
if you remove equity from the picture only then you can compare renting and buying. it comes out to me for 30 years like this: 180% i would pay for renting and 250% i would pay for buying with mortgage in 30 years. neither of them contain equity or the price of equity.
simple math for me renting is awesome.
at other places buying will be awesome of course. it always comes back to a single thing: rent/buy price ratio.
I had a good idea for "house" "flipping" in San Francisco where I'd find a rental house, advertise for roommates online, then charge them more than I'm paying to earn ~400 or ~500 monthly. You can be a Master Tenant without living in the unit so that was fine, but it turns out in San Francisco the Master Tenant can't pay more than they are paying for the unit OR can't increase the rent by what the Master Tenant is originally paying.
I truly feel I'd be great at connecting renters with rentals, I've noticed there's many problems with how rentals are advertised and how there's never sufficient information provided. But because I don't have any capital and won't for quite a few years I suppose I can do nothing related to real estate in this city. Sucks.
This is just subletting, and can be a great way to piss off your landlord. Works great for cheap houses in slummy areas that the landlord doesn't care about.
If you think you're great at "connecting renters with landlords" just become a real estate agent.