LostWaffle

Thanks everyone for the advice. It looks like I will be pursuing the low down payment option as much as possible.

Special thanks to those that pm'ed me with additional thoughts.

Mingster, you are absolutely right. Real estate investing in CA is about 3 times as slow unless you make 3 times as much as everyone else. That's why I am moving back to New Jersey. It's been a good 10 years here in CA. I plan to come back when I'm financially free!

Scot

Mingster - do what "under-rated" has discussed in other threads if you are comfortable with knowing the market. Buy based on appreciation (of course when california breaks off into the sea, don't blame me).... get a long term interest only loan....get enough rent to cover your loan, taxes, insurance and some maint....then hope like hell it goes up $100k in the next 10 years, then sell it.

that plan sounds great on paper, but for where I live, houses don't appreciate in a predictible manner....... some big houses on the mtn. over looking the city have gone up pretty nicely over the past 5 years, but they were $500k originally.....not a good rental.....

Lost Waffle - a common mistake we have seen locally is when a buyer buys maybe 10-12 houses in a package deal (usually the seller just suckered the buyer)..... then finances over 30 years.... then for some reason thinks this is how you retire right now....... then all the sudden 2 houses need roofs and there is no extra $ for that..... one guy had to claim bankruptcy after about 18 months of owning 10 houses.... he over paid by about $10k per house, but was under the impression he would have soooo much extra cashflow that he could retire.....ahahah...

under-rated

Who ever said you get rich over night is an idiot. Investing long term and stability or managed debt is the way to wealth. People go broke buying into a regressed market place. As far as hoping for appreciation, you're only hoping when you invest in an undesirable area or market place. 100k in ten years, I net that on a property in 6 months to a year regularly. The real estate market in your part of the U.S. sounds broke, I'm not saying that it isn't a nice place to live, just property values increase by supply and demand, California and Seattle, WA perfect examples, but again only in desirable locations. I have no point to prove, my strategy works fine for me, people lose their a$$ in debt, I buy them out, not to screw them over but to relieve them from their high interest mortgage they couldn't afford to pay down. . . Needless to say, we both did eachother a favor, distress seller is relieved, I bought in 30% below market value.

I don't mind sharing this information, because it takes time to learn how to go about these things. As far as going broke in real estate, only if you're dumb enough to buy regressed properties at market value, then secure a mortgage that can't debt service itself. The only person you can blame is yourself, know what you're doing before you seek advice from someone less than professional, remember that one. Cuz, I wait for people to make mistakes, like I said I'll buy them out Interest Only, and below market!

Scot

under-rated - I never understand why someone would sell their property for 30% below market.... why wouldn't they just list if for sale through a realtor and sell it at 90% of what is is worth?

Not to insult , but that sounds like one of those info-mercials..... "i was having lunch and overhead someone saying how the bank was going to take their house, so I turned around and we worked out a deal where I buy their house and they save their credit"......

i completely understand buying a house for close to market value if you have a good idea that the market is going to go up quickly...........

Right now (especially with informercials), the market seems to be flooded with "investors" who are willing to pay damn near market value (or more) for almost any real estate.....

I am content with my plan for now..... central pennsylvania is not the most desirable place to live... it is fine, but people aren't flocking here begging to buy houses......

mingster

i think what under-rated does (and i'm guessing) is buying repo housing, or housing close to repo. you'll need a really good network of realtors in the area to do this properly. my realtor actually told me about this: although the housing market has been great, the economy or job market hasn't been awesome. you hear about people living off credit cards and mortgage their equities all the time. well, one day or another the debt will catch up with them, and they will have no choice but to cover and leave.

i think that's how a person with tremendous wealth can walk into a situation and say "i have cash now to relief you of this burden, but to do that this is the price i will pay"

Scot

Richard...I guess that is what it is??? Around here just about each Real Estate Broker has an agent or two that buy houses, so they scoop them up before anyone else. In our newspaper there are about 10 ads that offer to buy houses for cash with quick turnaround..... so there seem to be lots of people in that market.

Around the city there are lots of signs "we buy properties for cash"..... i talked to some city inspectors and they said most of these type of people are total assholes just looking to rip the sellers, then rip the new buyers when the try to sell the houses......but they continue to stay in business somehow.

Every time I see an all brick apartment building with 4-10 units the sellers will want $50-$60k per unit.......but the rent will only be $500-$550 per month (only 2 bedroom, 1 bath apts usually)...plus a fair amount of vacancies due to people buying houses instead of paying rent.... for $50k i can get two decent sized houses with 3-4 bedrooms each and $600-$625/mo each rent.....

under-rated

Scot - seller in distress, one word "BANKRUPTCY". Who would sell their estate 30% below value, the sad thing is I can offer far below this, sometimes people surrender their estate to avoid bankruptcy you can always buy another house, you ruin your finances it will take years to rebuild.

Rich, you're smart enough to realize this. That's what I do.

under-rated

[QUOTE]Originally posted by Scot
Richard...I guess that is what it is???

JohnE

[QUOTE]Originally posted by under-rated

under-rated

Those are all very good questions, however I prefer to not get to exclusive about this.