Posted by cork horner on April 16, 2010 at 24:34:19:
how secure is your loc? Lenders tend to pull it. It’s better in YOUR hands, imo.
I believe in sub2 and various l/o using landtrust agreements.
If you can find good ground partners the rust belt is good…u can buy houses 10k and under.
cork horner
san diego
Beginner+ $30,000 line. Where to start? - Posted by Krosny
Posted by Krosny on April 14, 2010 at 22:11:25:
Hi,
I am a rank beginner and real estate terms look like chinese arithmetic to me(wraparound mortages, subject to…huh? Not to mention the resulting complex tax, state specific and legal issues seemingly every deal creates. At least after reading some of these CRE articles, that is the impression I get. I have excellent credit and access to a $30,000 line of credit at around 14%. Need to quit my truck drinving job(I want to live outside of my truck and remember what a date was like). Was wondering how a fairly slow-minded but hardworking guy like me could get started using that line of credit without being asked to stupidly risk it all on a single deal. Thought Lonnie deals(mobile home) might be a low risk way to learn but Texas law seems to thwart Lonnie deals. Any comments would be welcome.
Re: Beginner+ $30,000 line. Where to start? - Posted by arlan
Posted by arlan on April 28, 2010 at 09:58:55:
Find a cheap house. I mean cheap. Lets say 15,000-20,000. Use the balance to fix up, modestly cheap. Then rent it. Now you are an investor. Then go to a local bank or S & L and get an equity loan on this free and clear rental property. You could probably get 80% of the BPO or drive by value of $30,000. Take that $24,000 and find 2 really cheap foreclosures. They are available. Use what ever cash you can scrape together, Zero interest credit cards, etc. to fix them up a little to rent. Then get equity loans on the 2 new deals, Lets say you get $18,000 each. Buy 2 more houses. Now you have 5 rentals. Monthly net cash flow of $1,000.00. Then take the portfolio to a different bank because the first will not give more than 6 equity loans, and get a $150,000 line of credit. After paying off the equity loans of $60,000, buy 5 more cheap houses. Now you have 10 rentals. Before you know it you will own 34 rentals, 3 comercial buildings, a vacation double wide in New Mexico(also rented out on a short term basis to pay for, owe the bank lots of money that my tennants are paying for.
I also do a couple of flips per year, and build 1 spec new construction at a time. About 2 per year.
Cheap houses make money. Especially stinky houses that no one wants.
That is my story.
PS - My first rent house was purchased in the fall of 2003. I have been full time in this business since August 2005.
Re: Beginner+ $30,000 line. Where to start? - Posted by Don (VA)
Posted by Don (VA) on April 16, 2010 at 14:48:13:
Yup. Don’t quit your day job.
Consider wholesaling. It costs nothing (or virtually nothing), just some of your time. The line of credit isn’t enough to do much with and that 14% interest is kind of high. Try not to touch that at all.
Look up articles on wholesaling here. That’d be a good place to start.
Don Tepper
Confucious say “Don’t Quit Dayjob” - Posted by greengourd
Posted by greengourd on April 15, 2010 at 10:03:16:
If your $30k were $300k I’d say maybe start thinking of quitting, but not with just $30k as there’s no reliable way that can buy anything in RE that’s going to provide you with immed income equal to what your job does.
Also I’d urge you to meet and visit with some TX LD guys and see what/how they’re coping with “reforms” that Austin’s enacted.
Old TX saying “Legislature’s back in session so the Republic’s in danger again!”…been true all my life in TX and still as true today.