Posted by Buck_GA on July 30, 2002 at 17:52:30:
Brian,
Foreclosures can be a risky business. I recommend you take a course specifically on that topic. Search the archives for “foreclosures” and “courses” and see what you find.
Good luck
Buck
Equity Line and auctions question - Posted by Brian D
Posted by Brian D on July 30, 2002 at 16:58:34:
I am not what you call a seasoned pro yet, but I want to become one. This is my situation. I’ve got one luxery duplex (in which I live), and a 2 bedroom rental with $140 per mo. positive cashflow. I could rent my side of the duplex out and have about a $250 per mo. cash flow on the whole place, but my wife likes living there. She is about to have a baby in a couple months, and we will be losing her income for a while. At my normal job (I work for a land developer), I make about 80% of what we need to scrape by. I just picked up my Colorado real estate license, and am thinking about selling houses on the weekend or doing some appraising. My wife and I have excellent credit, and we owe nothing. I have about $45K in equity in my two houses, and a credit line with the bank for $30K that I can use for whatever.
I’m thinking about trying to buy tax auction properties or foreclosures at 50 cents on the dollar, but I don’t know enough about it, and I can’t afford a screw up.
Does anyone have any advice?
Should I maybe forget about investing until my wife goes back to work?
Thanks.
Brian
Re: Equity Line and auctions question - Posted by JT-IN
Posted by JT-IN on July 31, 2002 at 07:12:25:
Brian:
I 2nd Ron Starr’s comments on requiring experience to invest in the foreclosure and tax lien field. Investing is no place to get the experience, either. Possibly shadowing, which is attending many auctions, reasearching each deal and silently entering a bid (just in your head) until you have it completely figured out, can work. It is also very important to figure out “why” each thing that happens, happens. Truely understanding the “whys” can keep you out of trouble in the foreclosure business. It is very technical with the law, and until you understand it, another venue would serve you best.
The turn around time can also work against your goals and time horizons here. Some of these props and liens don’t exactly go full circle in a few months, but can take much longer to realize a profit.
I concur with Ron’s idea of RE appraiser, or just continuing to invest creatively for a few more deals. Thsi could quite easily make up the income deficit that you will be experiencing due to your wifes maternity leave. Who knows, maybe you could acquire enough income in her absense to allow her to be a stay-at-home mom, byt the time she is ready to go back to work. This is entirely possible in the RE investment business.
BTW, congrats on the news of the child… really special; better than buying a million dollar profit of RE investment all in one day… Best wishes.
JT-IN
Re: Equity Line and auctions question - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on July 30, 2002 at 18:26:54:
Brian–(CO)------------------
I don’t want to discourage you from investing, even while your wife is home. But, I’d suggest shelving the foreclosures or tax auctions idea until you are a very experienced pro at investing. I do not think that they are suitable for beginners.
I suggest you try something else. If your market is hot like around here, appraisal work sounds good to me.
You may have some special knowledge about land and land development that would allow you to make deals that most of us would miss, ignore, or screwup. Use the resources you have to maximize your competitive advantage–particularly if you can do so in a small niche ignored by most investors.
Good InvestingRon Starr