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Real Estate Investment as a Career


Lightning
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Had a few buddies over my house the other night and we got to talking about real estate investment, specifically "fixer-uppers", handy-man-specials, foreclosures, and desperate or motivated sellers. A friend of mine (actually the guy who sold me my own house) got into a beautiful house in a brand new neighborhood near me back in January, thanks to a seller going through a divorce that HAD to sell. He ended up getting a house worth about 420k (current selling/market value) for 382k. In less then 2 months, he finished the basement himself (working iwth friends and some know-how), put up some crown molding and new paint around the first floor, installed a small shed at the back of the yard, did about 2-3k worth of landscaping out front (new front hedges, ceder mulch, some retaining wall block, etc.), and severely cleaned up the garage. With those relatively easy upgrades and some weekends of hard elbow grease, his house is now one of the nicest in the development, and in less than 6 months and 10k dollars in upgrades he could now EASILY sell it for 450-460.

 

It got me thinking as we discussed, does anyone actually do this for a career on here (or know anyone who does)? What would be the minimums youd need to get started? (equity in your own home to use as down payments on a second property, an investor to fund the projects, hefty savings account, etc.).

 

I have SEVERAL out of work friends with construction know-how (guys who are jack of all trades with this kind of thing!) who would be MORE than happy to work with me or for me if I could get the projects funded. Obviously there is some risk as with any other investment, but Im just wondering who here actually does this...Does anyone you know make a career simply out of buying and selling houses all year? (aka "Flipping properties") :)

 

All thoughts/input appreciated as always guys!

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Had a few buddies over my house the other night and we got to talking about real estate investment, specifically "fixer-uppers", handy-man-specials, foreclosures, and desperate or motivated sellers. A friend of mine (actually the guy who sold me my own house) got into a beautiful house in a brand new neighborhood near me back in January, thanks to a seller going through a divorce that HAD to sell.  He ended up getting a house worth about 420k (current selling/market value) for 382k.  In less then 2 months, he finished the basement himself (working iwth friends and some know-how), put up some crown molding and new paint around the first floor, installed a small shed at the back of the yard, did about 2-3k worth of landscaping out front (new front hedges, ceder mulch, some retaining wall block, etc.), and severely cleaned up the garage.  With those relatively easy upgrades and some weekends of hard elbow grease, his house is now one of the nicest in the development, and in less than 6 months and 10k dollars in upgrades he could now EASILY sell it for 450-460.

 

It got me thinking as we discussed, does anyone actually do this for a career on here (or know anyone who does)?  What would be the minimums youd need to get started? (equity in your own home to use as down payments on a second property, an investor to fund the projects, hefty savings account, etc.).  

 

I have SEVERAL out of work friends with construction know-how (guys who are jack of all trades with this kind of thing!) who would be MORE than happy to work with me or for me if I could get the projects funded.  Obviously there is some risk as with any other investment, but Im just wondering who here actually does this...Does anyone you know make a career simply out of buying and selling houses all year?  (aka "Flipping properties") :)

 

All thoughts/input appreciated as always guys!

 

My sisters fiance(Rob) and one of his friends(Jared) do this, but on a bit of a larger scale.

 

They usually go in an purchase apartment buildings(20-50 units) or townhouses, gut/renovate them, then resell.

 

They have a crew of about 6-7 guys that work for them.

 

The last time I was in town they had just finished off 96 townhouses in calgary, I think I hear they picked them up for about $150-170/unit and are now selling for about $285+

 

I don't know how the financing is working, I know Jared has been very sucessful in realestate in calgary and also owns 2 bars. But they are both doing very well for themselves.

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Ive been thinking about it for a while now too. There is a guy that I work with that buys larger commercial real estate buildings in downtown Miami. He leases them to tenants, and makes a killing while the value appreciates. I think he was saying that his best building gives him between 10k-15k a month in profit. He is currently investing in duplexes, triplexes?, and quad buildings in Atlanta. He is making big bucks off of those as well. I honestly dont know why he even has a 9-5 with the money he is making on the side....

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Residential is ok money, Commercial you can make a killing but the deals are hard to find. Nonetheless you need to know what you are doing in both areas before you loose your ass. Best is to go to your local Real Estate club in your area and go from there.

 

But do your research before jumping into anything, we are in a shifting market.

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I've pondered this for a while, it'd be nice to have more than one source of income.

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I do about 10 flips a year. The advantage I have is, as a home inspector, I am involved with contractors and realtors all day every day. Good money can be made in residential properties, But with the market in the state it is in in most part of the country you must be very careful.

 

I have found that you must turn quickly or else carrying cost will kill you. If you are planning on doing the work yourself be certain you can do it quickly.

 

 

Also beware of closing cost both when you buy and when you sell, between the 2 they can cost 5-10% of the price of the property. Paying cash can help minimize this.

 

You can PM me if you have any questions

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A teacher of mine made millions using the Carlton Sheets process.

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Thanks for the advice guys. :partyman: Vinnie I will definitely take you up on that offer for advice as the need arises, I appreciate that! :)

 

I have wondered about Cartlton Sheets program for a long time. I met someone once who told me thats how they got started years ago, always wondered just how effective his techniques are if you follow the steps..

 

I may have to check them out!

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Mike,

 

the teacher im talking about is a Marketing Management Proffesor. He is legally blind. He has people that he pays to drive him around, or kayaks to work. If he can do it I am sure we can do it.

 

http://www.quain.com/biography.php

 

http://www.quain.com/

 

BTW his books are phenominal and so are his courses. :D

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Thanks Mike, i checked out his site. Seems like a pretty inspirational guy! Its awesome to have Professors like that!

 

By the way Im sure we can do it too. ;) Just gotta make the right moves NOW. :D

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Residential is ok money, Commercial you can make a killing but the deals are hard to find.

 

Preach on! I just got a 33k sqft warehouse under contract that I'll be condo-ing into 6 units where I'll have at least a 149% return in a year. The last 6 commercial deals that I've done have given me at least 90% return on my money. What all the S. Florida investors neglected during the real estate boom was the commercial market, while we have a 11 year surplus of condos we have a terrible shortage of commercial warehouse space.

 

And yes, you need to know the area backwards and forwards before you make a move, everything I've done has been in two neighboring cities.

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I'll have at least a 149% return in a year

 

I had one deal where I had a 500k offer over what I had it under contract for within a week. I turned it around and it appraised about 900k more than what I purchased it for. It is cash flowing very well now too.

 

Plenty of deals out there, need to master the art of adding value to commercial properties.

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I'll have at least a 149% return in a year

 

I had one deal where I had a 500k offer over what I had it under contract for within a week. I turned it around and it appraised about 900k more than what I purchased it for. It is cash flowing very well now too.

 

Plenty of deals out there, need to master the art of adding value to commercial properties.

 

I cant WAIT to get into this...

 

Im going to have to take it one step at a time though. :)

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Residential is ok money, Commercial you can make a killing but the deals are hard to find.

 

Preach on! I just got a 33k sqft warehouse under contract that I'll be condo-ing into 6 units where I'll have at least a 149% return in a year. The last 6 commercial deals that I've done have given me at least 90% return on my money. What all the S. Florida investors neglected during the real estate boom was the commercial market, while we have a 11 year surplus of condos we have a terrible shortage of commercial warehouse space.

 

And yes, you need to know the area backwards and forwards before you make a move, everything I've done has been in two neighboring cities.

 

Thats the type of stuff i want to get into right there. Like Lightning said,"One step at a time." Whats the median asking price for a decent commerical building in yall area.

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We have to be patient.... :x

 

It sucks that 90% of the time you have to have money to make money. Especially in RE. I personally would like to get into the forclosure market, but you have to have a large amount of cash on hand..

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It sucks that 90% of the time you have to have money to make money. Especially in RE. I personally would like to get into the forclosure market, but you have to have a large amount of cash on hand..

 

Oh yah forgot to tell you, on that paticular deal I went in 0 down :shock:

You dont need money to make money, you need to know how to add value and put the deals together.

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WOW!

 

You have my attention. I would like more details please. PM me

 

-Mike :D

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It sucks that 90% of the time you have to have money to make money. Especially in RE. I personally would like to get into the forclosure market, but you have to have a large amount of cash on hand..

 

Oh yah forgot to tell you, on that paticular deal I went in 0 down :shock:

You dont need money to make money, you need to know how to add value and put the deals together.

 

I know how to add value and I know how to sell. I am in a sales position right now. It is possible to make that much money on a deal, but I've never seen a 900k return on investment in a week on something that you put 0 down on. Also how can you add THAT much value to a RE investment in a week. Thats the only reason I ask.

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Who said it was a week? I had an offer for 500k more in a week, becuase it was a great deal that I purchased well below market value. Adding value takes a hell of along time depending on the project.

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I am sorry I misunderstood your statement. Hence questioning that large amount of return in such a small amount of time. Those deals were happening frequently in the S.FL market 1-3 years ago. Now they are very few and far between.

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Oh yah forgot to tell you, on that paticular deal I went in 0 down  :shock:

 

I'm doing this condo deal with 0 down as well, I just had to give a $320k second on some water front property I have on the Miami river. I have my fingers crossed, if I flip the building as is I can expect to double my money, if I condo it, its even better...

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I cant WAIT to get into this...

 

Im going to have to take it one step at a time though. :)

 

Take your time, its not easy at all, not to mention the time between deals when you have ZERO liquid. If youre good its great, but its also a great way to race to an early grave...

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