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  1. #1
    Registered User DoragonKingu's Avatar
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    Investing in Real Estate

    Looking to invest in Real Estate it seems like a great sector to build wealth. How does a novice investor get the ball rolling? I was doing some research came across this service called "Fundrise" does anyone know anything about it? Is it a legit real estate investing opportunity?
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  2. #2
    Registered User whitepaper's Avatar
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    Originally Posted by friesbruh View Post
    Know nothing about it.

    Best way to RE invest is to do it debt-free. In some parts of the country (my old hood), that would buy a house and pay for the reno which would appraise and sell for roughly 55k, get 51k at have about $46,100 after tax left to roll in to another property to do the same. Take that 45k, Spend 20k, reno with 20-25k, resell for 85, get 79k at close, have about 71k after setting aside federal tax, then roll that in to another property.

    Other way you can do it is to finance it which, if done on an incredibly small scale as above, can be done to make you money. IE, buy a house cash (youd have to save up this) but then open lines of credit at HD, Menards, Lowes, where ever and use that to finance it but that is only if you DIY it.

    I bought my old house for 9k, spent about 25k (in lines of credit) and another 5k in personal costs, sold for 72k, got 66k at closing, net profit of about 27k but did all the work myself but that chit took a solid year to do.

    So there ya go. start small and build on it. Dont know chit about apps on investing.

    You're buying entire homes for 9k? Where the fuk is this even possible today in any decent area with an inhabitant count of more than 5?
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  3. #3
    Registered User iloveus's Avatar
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    No longer will the excuse of “I have too many bills to pay to quit my job and enter the Fastlane full time” remain valid. We are building your shelter. We are building your money tree. We are building the castle from which you will wage your war.

    This thread is targeted for those of you who currently have:
    A stream of income from your lame J.O.B., from your own business (need 2 years of 1099 history for this to work if self-employed), from your full blown Fastlane venture or from your sugar daddy/ momma (whatever) and
    Currently do not have an FHA mortgage
    We are going to learn how to purchase a duplex, 3-flat or 4-flat with as little as 3.5% down that will cash-flow and pay for itself.

    Are you tired of paying your landlord your hard earned wage each month and having nothing to show for it? Do you wish you had a money tree in your backyard? Good. Let’s rock and roll.

    Let’s break down what you will need to do into a simple list:

    1. Contact / engage a mortgage broker​
    Hop on Yelp! and search for the best mortgage broker in your city. Pick one who has high remarks in their reviews. Don’t get bogged down searching for the perfect mortgage broker. There are thousands in every city. Call a few and pick the one that pays attention to you (answers quickly, calls you back quickly, etc.)
    Obtain a mortgage pre-approval (broker will walk you through the steps) for an FHA mortgage (broker will walk you through all the documents they need you to sign)
    i. An FHA mortgage is a tool that first time home buyers who will be owner-occupants (move into the property) can utilize

    ii. Broker will run your credit (FHA minimum score threshold is around 550 I think, so hopefully you are a responsible, bill-paying-son-of-a-b*tch)!

    3. Once you are pre-approved, the mortgage broker will get you the loan you need once your real estate broker (step 2) finds you the property you want. They will charge you a fee at closing (likely 1%, or 1 “point”) which can be rolled into your loan

    2. Engage a real estate broker​
    Same thing, head to Yelp! and pick based on reviews. Call a few and tell them what you are searching for:
    Tell your broker you want to look for owner-occupant Freddie Mac (HomeSteps), Fannie Mae (HomePath) properties that are between 2 to 4 units (our ideal number is 3 or 4 units)
    i. The reason we like Fannie and Freddie foreclosures is because owner-occupant buyers have a 14 day window to bid on these properties before investors. This restriction is intended to keep real estate investors from driving up the price of houses on the home buying citizens of America. Which is good for you, Mr. first time home-buyer!​

    3. Look at some properties (criteria)​
    Check out properties you think fit the size criteria, and that are in a good area of your city. Try to stick near big transportation hubs (trains) and try to pick an up-and-coming neighborhood (read: follow the hipsters)
    i. Hipster neighborhoods are the next places that will “turn” economically in a given city, and are great spots to realize cash flow​
    2. Hop on PadMapper.com (good for checking rents in an area) to see what kind of rents you can expect from the property you are looking at

    i. Example (all made up): 3 unit, Seattle with all units having 2 beds 1 bath.
    Rents in the area are $1,000 per unit on average (same size, quality, finishes, etc.)
    3. Take the gross amount of rents and apply a safe buffer of 50% for expenses:

    i. 3 units x $1,000 = $3,000 per month gross rents x 50% = $1,500 expenses
    This means you keep $1,500 in your pocket (your “NOI” or Net Operating Income)
    4. Figure out a buffer for your mortgage (and any possible cash flow)

    i. If you paid $200,000 for this property @ 4.25% for 30-years and 3.5% down, your monthly payment would be ~$1,500. Voila, no mortgage
    This doesn’t take into account that most months you will not hit 50% expenses. Some will be 0% (very cash positive), some will be 150% (cash drain) so be sure to keep reserves set aside from the good months for when the bad months come around
    ii. You make your money when you BUY not when you sell​

    4. Pull the trigger!​
    I would recommend looking at 15 to 20 properties with your agent and getting a good feel for the market. You will start to recognize trends.
    This whole process will only take 2 months or so and sets you up for months of lower-stress productivity. Stop subscribing to get rich quick mindset. Good things require process and take time.

    If this interests you, just start calling people! Just because you talk to brokers doesn’t mean you HAVE to buy something. Good brokers will hold your hand through the whole process. If a property was recently rehabbed or isn't more than 10 years old...then use 40% for expenses when you do your quick-check math. If a property has under market rents...don't pay for what the property "COULD" be operating at. Pay what it is currently worth knowing that when you increase the rents you will cover your mortgage and realize equity appreciation. Just use common sense.

    If you think you can spend your resources in a better place, or make the “jobless” leap without buying your “castle”, then please do. This thread is for people stuck in a job or who are too timid to take a leap of faith without first building a small form of support.

    I did not even touch on the fact that you can utilize an FHA 203-k loan, and get rehab construction rolled up into your loan amount, or the larger fundamentals of apartment investing, but that is because I am not trying to teach you how to be a guru here, I am simply providing a path to ease your monthly financial burden.

    If you are going to make this move and want to hit a home run, DO YOUR RESEARCH and take a dive down the rabbit hole. If you don’t want to spend a ton of time learning how to hit a home run, that’s alright because you must remember that singles, doubles and triples (pun intended) still put points on the board in the long-run. Just get moving NOW!

    Read some apartment investing books over the course of a few weeks and then plan your path to freedom carefully. Don’t shoot in the dark, but make sure you do in fact shoot. No deal will ever be perfect. The timing will never be right. Pull the trigger now.
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  4. #4
    Registered User paulinkansas's Avatar
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    Originally Posted by whitepaper View Post
    You're buying entire homes for 9k? Where the fuk is this even possible today in any decent area with an inhabitant count of more than 5?
    Coffeyville Kansas. The last 4 houses I bought were bank foreclosures, 3 BR with central heat and air. I paid $9500 for each one. They needed about $1000 of work to fix any minor problems or to update something. I spend another $1500-$2000 to put in furniture and appliances. Put the utilities cable and internet in my name and I rent them out by the week. A motel room with 2 beds is $400/week. I rent out the furnished houses for $600/week. There is a refinery in my town of 9000. Refinery contractors are the only people I rent out my places to. They get a per diem, my places cost the same as a motel, and they can cook and do laundry. My official day job is giving pre employment drug screens to the travelling contractors coming here for work. A few years ago the Hugh Hefner in me started to come out. All my places are decorated like Hugh Hefner himself decorated it. Welders, pipefitters and boilermakers are my typical tenants. Big burly guys that drive jacked up 4x4s, chew tobacco in their sleep, smell like diesel fuel and have neck tats.
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  5. #5
    Trancebrah _zman's Avatar
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    A good starting point is buying a house for yourself. Something that needs updates. Do the work yourself and sell in a few years for a tax free profit. Rinse and repeat. Unless you have enough borrowing power, then you may want to consider alternatives.

    I bought one and worked on it for 8 years, not in a real rush to fix it up. It was bought @$170 and now it's worth $275. Loan has $110 left. Debating on refinancing or cashing out and moving to the west coast and do it again or chill for a year/travel.
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  6. #6
    Manlet with Credentials Jasonw1178's Avatar
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    Originally Posted by _zman View Post
    A good starting point is buying a house for yourself. Something that needs updates. Do the work yourself and sell in a few years for a tax free profit. Rinse and repeat. Unless you have enough borrowing power, then you may want to consider alternatives.

    I bought one and worked on it for 8 years, not in a real rush to fix it up. It was bought @$170 and now it's worth $275. Loan has $110 left. Debating on refinancing or cashing out and moving to the west coast and do it again or chill for a year/travel.
    Be careful with that. A lot of people dump a lot of money into a house thinking they will increase their home's value by a margin that will more than cover the cost, and find out the hard way that isn't always so. 90% of your home's value is based on square footage and location. Of course, something not fucntional or wrong with the house can deduct from the value, and premium features will make the house more sellable but not really help the value. Mainly because 95% of home buyers need a mortgage and banks really don't care about that kind of thing. Laminated particalboard or marble, the bank just sees a countertop. Driveway needs to be reparied, backed up septic system, missing countertops, that will deduct from the value.

    I used to be a person who would argue that you do get your money back, but learned from other people's mistakes.
    Last edited by Jasonw1178; 02-18-2020 at 07:25 PM.
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  7. #7
    Registered User friesbruh's Avatar
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    Yup.

    House next door to me went for 6k. The one on the other side went for 24k. Two across the street went for about 13 & 19k. One on the corner diagonal went for 17k. Mine was 9k. Keep in mind, the 6 & 9k homes were complete chitholes but the ARV (after rehab value) on em was anywhere from 55-74k and the one diagonal will be worth about 109k after some work is done to it.

    Theyre everywhere bruh.
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  8. #8
    Registered User paulinkansas's Avatar
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    What he ^^^ said. Amazon had a distribution center in my town. It relocated about 8 years ago. 1600 jobs lost overnight. People left town. Lots of bank foreclosures and nobody moving to this town. So I started buying them and doing niche rentals with my furnished houses to refinery contractors.

    Whenever one door closes, another opens. You have to find that door. It's usually behind a curtain, and a big tough guy is guarding it.
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  9. #9
    Trancebrah _zman's Avatar
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    Originally Posted by Jasonw1178 View Post
    Be careful with that. A lot of people dump a lot of money into a house thinking they will increase their home's value by a margin that will more than cover the cost, and find out the hard way that isn't always so. 90% of your home's value is based on square footage and location. Of course, something not fucntional or wrong with the house can deduct from the value, and premium features will make the house more sellable but not really help the value. Mainly because 95% of home buyers need a mortgage and banks really don't care about that kind of thing. Laminated particalboard or marble, the bank just sees a countertop. Driveway needs to be reparied, backed up septic system, missing countertops, that will deduct from the value.

    I used to be a person who would argue that you do get your money back, but learned from other people's mistakes.
    My background is real-estate ownership, management and controller in commercial/residential properties, with degrees in finance and investment science.
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