ecdonovan said:
This guy has a partner, also a carpenter friend to do work as needed and a son to do yard work. The all help at one time or another. He is in Georgia so the weather does not shut him down in the winter. I also believe he works with a Realtor so when they show the places they sell quickly. I would love to have the nerve to try it. The only thing is I do not have the people to trust or get to do labor.
He came in, landscaped, repaired, painted and decorated a little. Knowing my luck when I would try the market would collapse and I would be stuck paying a mortgage on a property I could not get my money out of.
Ed
? ? Most good rehabbers bring people in to do everything and do most of it simultaneously but 30 days is still pretty damned amazing, must be one hell of a hot area.. I agree with you, though, some areas are all but volitile if you ask me. In alot of these areas prices are driven up all to hell by uneducated consumers and wannabe investors with more money than sense.? You have to look at the area and determine in your own mind what supports these values and if the answer is "not much".. be careful :=)
? ? ? ? ? ? ?The guy you're talking about probably thinks the area will lose value and so he's turning properties over for a profit.. getting in and out before any thing happens to lower the prices. The guy has made enough money that he could not possibly lose money now no matter what happens now - and real estate isn't like the market where your investment can go to hell over night so easily.
? Real Estate is a much better investment than stock if you dont mind doing your own legwork and getting involved with your investment. Real Estate is low risk for large return whereas the market is usually a high risk for large returns OR low risk for small returns. Buying common shares of stock you have NO control over your investment - Buying property you have ALL OF THE CONTROL.. that makes the difference.
? ? ? ? ? ? ? ? ? ?Also if you're in an area where property values make sense owning real estate gives you some all but amazing tax benefits. Just don't get caught up overleveraged with dangeous types of financing. Interest only loans are fine when you're sure of cashflow and appreciation, for example and a variable rate loan can be dangerous unless you have a good reason for using one.
? ?I know alot of so called real estate experts who are going to be taking a fast train to hell soon because they're dependant on low vacancy and interest rates.? Imagine what will happen to a sucker who owns 100 properties in an overvalued area. When the prices come back down to earth all of his tennants are going to be able to afford their own homes again and POOF there goes his income and his equity all at once. BLAM..
Another thing to remember if you're wanting to turn property over is that you can't usually save yourself anything by doing the work yourself. Doing major rehab yourself just ties up capital and increases your holding cost. It is good to do a few small things like cleanup and a little painting yourself but that ought to be the extent of it. Trying to do it all yourself WILL cost you even if you're one of the best carpentry/construction men out there. Unless you've got a crew to go with it.
The point is - don't tie a hundred grand up for an extra month or three in order to save a few grand which will be eaten by extra holding costs any way. Spend a little extra and save yourself all of the hard work and holding costs - you'll be able to get on to another deal and make more money that way.
If you do it that way you can usually do TWO deals in the time of one, so while you spend just a bit more in the short term you end up profiting twice as much in the long run.
? Sorry about my rambling over here
I ramble on and on like an old man some times
