OfflineHello Everyone:
I am fairly new here but certainly not new to the business of real estate. I started out at nineteen with my first property. Back then, I did not realize that one deal would take me to where I am at today.
I read through alot of what is said here. People are struggling to get started. I have to ask myself a million dollar question and that would be why?
Everyone has the tools through Dean to become successful, why are they not being utilized?
If you read the books and spend time here, then you should be ready to get going unless you just do not understand whta is being said. That is okay too.
The first thing you need to do is make sure this business is really for you. If your not going to enjoy looking at properties, analyzing deals, doing deals, then this is not going to be a business you will see long term success in.
Once you know that this business is for you, then it is time to figure out how to make it work for you. This is where planning comes into play.
How much money do you want to make net in your pocket? if you say a million dollars, that is fine, but know that you will be in this business very long term if all you are going to focus strictly on residential properties.
Investors who make a million dollars are those who are involved with commercial real estate. This is not all investor, but many. Some investors see million dollar incomes and net worth's from residential property investments exclusively.
You need to find one or two techniques to work through in your business. I like lease options and quick turning. I am not talking about flipping. Personally I think you trade pennies for real dollars when you flip properties. If this is your plan, then run with it, all I am saying is it is not for me.
When I quick turn, I buy low, make adjustments to the property, called repositioning and then sell at a marked up price, which for my business model falls between what I paid not reflective of the closing costs, the costs for repositioning and then pricing the property at a price point that enables me to stay below the fair market value.
An example of a deal would be for example, buying for $200,000.00, having costs of $35,000.00 associated with repositioning then adding $35,000.00. So in this deal I have a total of $235,000.00. Now if this property is worth $500,000.00, it might be priced at $300,000.00, so I am making $65,000.00 on one deal.
I think you need to just get out there and run with it. You can spend time looking at profits on paper or go out there and take those profits from paper to your bank account.
and by "repositioning" you mean rehabbing?
Cathy B
Follow my progress at:
http://www.deangraziosi.com/real-estate-forums/investing-journals/44397/...
It could be a rehab issue, management, low rents, any number of things. Great question.
Correct me if i'm wrong here but repositioning is the art of pushing a property to its highest and best use. So that could be rehabbing and staging in a normal blue coller area also looking at say a 4 family you found cheap say 200000.00 on the lake front or ocean front in a high density area and changing use to condos, then doing some work and selling them all out at 2000000. a piece making a nice a profit etc. Think differently see what you can do. Look at the area look what you have to work with etc. There is a lot of normal things and a lot of wild things to do out there. you don't neccessarly have to do what everyone else is doing the tools and techniques work pretty much the same all over. I know this guy who just does sliver buildings in downtown areas where he can get odd size properties cheap to work with. sorry to but in.
Al
Nice posting Mlaurita but don't you need money to do this, How can one do without money?
Thanks,
"With God ALL Things Are Possible"
"With God All Things Are Possible Matt. 19:26"
"Give a Man a Dollar he's Rich For The Day, Teach a Man To Make a Dollar
He's Rich For Life" - T. Grant
Great question. If your buying right and by that I mean below market and your doing a rehab, the funds should be borrowed from a hard equity lender or private funder than repaid when you sell or repaid out of cashflow.
If your going to rent or lease purchase, you should use private funds, when immediately reselling, use hard equity money which is also known as hard money.