How do I start investing in real estate?

[Fishindude77]

I'm a builder. Had a client that had outgrown their existing facility and needed to relocate. Wasn't much nice stuff suitable for them to rent in the area so we built them a new place on a long term lease. Did it with two partners and paid cash, it was a $1.2 mil deal. Have done a couple of these deals.

Borrowing 75% or so of the cost wouldn't be much trouble if you have good credit, some assets, a solid tenant and a good business plan. Commercial loans on stuff like this will typically be in the 5-7% range if borrowers are solid.

You can do commercial rentals at all different price levels. Might be able to buy a building and set up for a small business as cheap as $1 - 200,000. Some places like beauty shops, small stores, auto repair shops, service businesses, etc. don't need large square footage or a prime (expensive) location.

[DaveInPgh]

https://www.loopnet.com

One source for commercial properties (and businesses) for sale.

[butler]

Has anyone looked into HomeUnion? They are supposed to provide end-to-end services ---- from buying to property management.

I have not invested anything through them yet. I do have a rental property which I am managing by myself. And have recently started investing in fundrise.com.

[snafu]

One neat, easy to track and understand process is to participate in an ETF REIT. I'm watching a chain of Assisted Living apartments and am waiting for an anticipated annual drop of value to jump in.

[LivingAlmostLarge]

snafu what chain and is it a specific REIT?

[Outdoorsygal]

For those that are doing it successfully, is there a goto book or website I can start learning how to do it right? We are thinking about taking the first step with a vacation home somewhere. Is that a good first step? Or should I dive right in with full time rentals? Appreciate your help. Tom

We were just talking today about investing in real estate. Drove to some of the MLS listings for sale. But we would likely start with some land we own then put a modular home on it and re-sell it. Then with that money keep flipping houses. Many of his friends did this for a decade or so but that was in the 90's. We don't expect to do really well but enough $$ to make it worth our time. Just another angle to mull over.

Many of the rentals here come with trash service. That is because the water and trash companies are making the Landlords liable for their tenants unpaid bills. If not paid up, the new tenants are not able to get trash or water service.

[DaveInPgh]

Has anyone looked into HomeUnion? They are supposed to provide end-to-end services ---- from buying to property management.

I have not invested anything through them yet. I do have a rental property which I am managing by myself. And have recently started investing in fundrise.com.

Although you have only been investing with them for a brief period, are you able to provide any positive or negative feedback regarding Fundrise?

Mint.com just sent me an advertisement regarding Fundrise

[DaveInPgh]

Never mind regarding the feedback regarding Fundrise. I found an article about the CFO being fired where he suggests it was because he raised concerns about “serious fraudulent behavior." The CEO disputes it and says the fired employee tried to extort the company.

Who to believe?

Well, the article states that the co-founder and half brother of the CEO (other co-founder) left to start his own company. The CEO's responses regarding his brother just makes him sound like a major douchebag.

Of course that doesn't prove fraudulent behavior, but it makes me uncomfortable enough to not consider Fundrise for an investment.

[TexasHusker]

I think you should go for full time rentals. According to me they are more beneficial than vacation home.

Thanks and Regards
Rishika

I actually switched from residential rentals to vacation rentals, as I have found the yield to be several points higher.

[Outdoorsygal]

I actually switched from residential rentals to vacation rentals, as I have found the yield to be several points higher.

Are you using AirB&B by chance??

[Outdoorsygal]

I saw my post in this thread from just 6 months ago. Interesting

But I will add to this old discussion. I understand if you are not already in this business (Realtor, Contractor, etc) and know it well, that to start with what you know is always safe. We bought land but knew the land well before buying. Knew it had springs on it not listed. Knew that when we found an old listing for the same property online that it showed a 1920 cabin that meant saving 25-30K in County Permit fees since it already shows a house. And knew there could be a Gold mine on it, which could be more of a liability or could be hugely beneficial depending. It's caved in and on the side of a cliff so thank god no one can fall into it. And I found a way to maybe not pay taxes on the re-sale if it occurs less than 1 yr+1 day (Long term capitol gains) just due to my husbands health issue. So it was bought for 50K ($51,500 exactly) and we have it for sale for 125K but not totally sure now we want to sell it. We might keep it and build on it. It will sell for 99K for sure but we listed it much higher

[tripods68]

Tom,

Vacation home isn't a good place to start for investing in real estate property since it mostly vacant for most of the year. You won't recoup what you pay for in taxes and maintenance/management.

You need a goal or purpose why you want to invest in real estate. Is it to generate cash flow short term, or long term? How much are you willing to pay for? All cash, or partly finance? If so how much do you want to invest in fixing the property before you can rent it out.

Real estate investment main purpose is to generate Cash Flow, if so how long do you want to be a landlord? 2 years, or 5 years. Are you willing to put the hassle of owning/managing a property?

[TexasHusker]

Are you using AirB&B by chance??

I do not but you certainly can!

[TexasHusker]

Tom,

Vacation home isn't a good place to start for investing in real estate property since it mostly vacant for most of the year. You won't recoup what you pay for in taxes and maintenance/management.

All of this is 100 percent not true. I have a $150,000 cabin that rents over $30,000 a year. I have a $110,000 one that does about $20K per year. Even after 30% mgt fees, utilities, taxes, repairs and maintenance (all of which are fully deductible), the annual yield is quite good. Plus, the value of the asset appreciates over time - often considerably so.

If you commit a couple hours a week, you can ramp up the returns substantially by managing it yourself. It's not hard - I did it for years.

[tripods68]

All of this is 100 percent not true. I have a $150,000 cabin that rents over $30,000 a year. I have a $110,000 one that does about $20K per year.

It doesn't have to be 100% true, that's not the point i'm making either.

Most people that dive in real estate are not very "savvy", often learn the hard way, costing them thousands of dollars at first that they may never recoup in rental fee. Buying a property that have a lot of issue takes a way capital investments. Finding an investment that makes sense takes whole lot amount of time. Finding a particular location, zip code and be able to work with realtors in that area and negotiate a very good deal. The cost of acquiring a property; closing cost, realtor fees. Once you acquire a property how much do you want to spend to make it a to code, or renovation cost? Do you have a trust GC, or do you want it do the work yourself. How much do you want to spend to maximized the rental fee in your area? It's takes years to be an expert or be good in real estate.

Don't make it sound as easy because you say so. It isn't true. Real estate isn't for everyone that why most failed.