GOOD REI ideas? - Posted by ShELToN_n_VA

Real Estate Investing
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Posted by GL - ON on March 21, 2003 at 11:13:19:

Estimated $250 to $300 million. That sounds low if he really owned 24,000 apartments, built with government grants and low cost loans and owned most of them since the 50’s. But with clever estate planning and tax strategies who knows?

It is practically impossible to get any sense out of a reporter or writer when it comes to financial matters. I have read many books about successful business people and the authors are routinely baffled by business transactions that should be as clear as glass to a 10 year old child.

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GOOD REI ideas? - Posted by ShELToN_n_VA

Posted by ShELToN_n_VA on March 20, 2003 at 16:07:54:

Hey everybody,

I am a college student(junior) and I just got my tax refund back. It was about $2500. I don’t know what to do with it right now. I wanted know if you guys had any good ideas on how to turn that $2500 into around $9000 in two years, So I can pay my student loans off when I graduate(or before I graduate).

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Re: GOOD REI ideas? - Posted by GL - ON

Posted by GL - ON on March 20, 2003 at 18:20:14:

  1. Go to this web site and get the free Ebook on lease options.

http://www.resultsnow.com/p358.html

  1. Follow the advice about calling a House for Rent ad and renting with an option to buy.

3)Lease option a house.

4)Rent out rooms. You should definitely make a profit each month doing this. Don’t forget your rooms will be empty during summer vacation. Offer your tenants reduced rent for those months, and they can leave their stuff there and have a room when the school year starts. Get your tenants to sign a lease. Make sure you get a parent or guardian to sign the lease too .

  1. Before you graduate sell the house to the parent of a new student. Show them how their kid can live rent free, make extra money and possibly sell the house at the end of 4 or 5 years for a profit big enough to pay for their education.

I hope that is easy enough. You probably won’t even need the whole $2500 but you should keep it in the bank for emergencies.

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Re: GOOD REI ideas? - Posted by David Krulac

Posted by David Krulac on March 20, 2003 at 17:23:14:

buy a house live in it and rent rooms to other students. Sell house in 2 years when you graduate.

David Krulac
Central Pennsylvania

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Re: GOOD REI ideas? - Posted by eric-fl

Posted by eric-fl on March 20, 2003 at 16:47:56:

I posted to another college student on this board about a week ago, although it’s probably off the board at this point, and the current archives aren’t searchable. The upshot of my post was, if you are in college, will continue to be for a little while, and might not immediately leave the area upon graduation, you should probably own the place you are living in. Then, rent out the remaining rooms, and have the parents co-sign everything. Obviously, the more rooms you can get, the better. Make sure the property is near campus. Even if it’s just a break even today, in a few years, when you move out, rents will probably continue to inflate at some rate, in most areas, while your payment will remain the same. Plus, you get better cash flow renting by the room rather than by the dwelling. It’s the whole “why buy the cow” thing, and the same reason a slice of pie costs $2.25, but a whole pie costs $9. It makes more economic sense to buy the whole pie, but sometimes you don’t want a whole pie, just a slice (room). You get the idea. Plus, you get tax breaks, when you own real estate, which you get none of when you rent. That’s money in your pocket, too, and is not something to take lightly. Finally, when you go to sell your property, if you hang on to it for at least a couple of years, it will probably be worth more than the day you bought it, and that will be more money too. All the different profit centers created through the ownership of real estate will probably take care of your student loans, and then some.

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Re: GOOD REI ideas? - Posted by ShELToN_n_VA

Posted by ShELToN_n_VA on March 20, 2003 at 18:41:52:

thanx! I will read it ASAP! but wouldn’t that make me a landlord? from what I have been reading, on this site, being a landlord in the industry is a bad thing. is it really?

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Re: GOOD REI ideas? - Posted by ShELToN_n_VA

Posted by ShELToN_n_VA on March 20, 2003 at 18:05:13:

you think $2500 is enough money to put down on a house? Wouldn’t this make me a landlord? isn’t that a bad thing in the REI industry?

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Re: GOOD REI ideas? - Posted by ShELToN_n_VA

Posted by ShELToN_n_VA on March 20, 2003 at 16:53:20:

sounds great, but can all of this be done with $2500? Whatelse would I need to do something like this? How EXACTLY is it done?(step-by-step process)

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Re: GOOD REI ideas? - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on March 20, 2003 at 18:53:57:

Shelton–(VA)---------------

Are you a shill for the renters union? I don’t see much here on the CREONLINE.COM website about landlording being a bad thing. Some individuals may post that they don’t want to be landlords. That is a different thing. Some people don’t like to be giving good service to other people, which is what is required to be a rental property owner.

I started out in college buying an apparently four bedroom house, renting out three rooms to help with the expenses, including the mortgage payment. Paid about $23K for the house. Sold for $315K 26 years later.

Typically, if you have normal transaction costs, holding a house for only two years is not a good idea. More than three years, probably is a good idea. But, if you follow the advice to do a lease-option, your closing costs will be lower. Also, if you don’t use a real estate brokerage to sell, that is a good idea.

Good InvestingRon Starr***********

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Donald Trump, Bronchick, Legrand, Robt. Allen, - Posted by David Krulac

Posted by David Krulac on March 21, 2003 at 08:07:37:

Ronald Starr, Frank Chin, GL-ON, and a whole bunch more of the people that you see here are landlords.
Perish the thought that landlording is bad. For the long haul, through good times and bad, landlording is a get rich slow procedure, but it is get rich!

David Krulac
Central Pennsylvania

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Re: GOOD REI ideas? - Posted by RichV(FL)

Posted by RichV(FL) on March 20, 2003 at 20:55:20:

SHELTON!

Listen to me! Being a landlord is not a bad thing.

We are not all Mr. Potters from “Its a Wonderful Life”

Listen to Daivd and the others…you can make good money in this business and not be a tyrant, evil landlord…like me :wink: lol.

Good luck

RichV(FL)

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Re: GOOD REI ideas? - Posted by David Krulac

Posted by David Krulac on March 20, 2003 at 18:37:38:

  1. yes
  2. yes
  3. no
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Re: GOOD REI ideas? - Posted by eric-fl

Posted by eric-fl on March 20, 2003 at 17:17:37:

Shelton, few of the participants here have the time or inclination to give you a step-by-step. That’s what the books and courses are for, conveniently available for sale right here! And no, I do not have any financial stake in this site. You certainly don’t have to buy anything - I’m always an evangelist for the public library. People just don’t realize how far most of them have come in the last 20 years. An excellent book I’d recommend to start with is “Investing in Real Estate”, by John McLean, which is probably available at your local library, or if not there, definitely through your local bookstore, or Amazon. Also, read the articles here - they’re free.

Once you feel comfortable with the basics, decide on which strategy you might try to use to acquire that first property. You may not even have to use “creative” techniques. There are many programs available for first-time homebuyers that you may be able to qualify for, which will signifigantly lower the amount of cash you need. Are you a veteran? 0 down. Does your local city have a “challenge fund”? Also, check out HUD, they have lot’s of great programs as well.

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Re: GOOD REI ideas? - Posted by ShELToN_n_VA

Posted by ShELToN_n_VA on March 20, 2003 at 19:25:00:

thanx! I get the idea! Buy a home close to campus for about $60 - $80 grand. Use my $2500 as a down payment. get loan from a private lender. charge(in rent) at least $500 more than my monthly loan payment. That way, after 3 years I should have at least $9000-$10000 to pay back my student loans.

how long should the loan be? (15 years?)
does part of that $500 go toward house expenses or do the tenants pay for that?

Is this accurate, close, or way-off? any advice on the specifics?

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Re: GOOD REI ideas? - Posted by Phong

Posted by Phong on March 20, 2003 at 19:15:01:

I wish somebody had told me about all these creative RE investment ideas when I was in college? Could have gotten at least 100K in equity by now… You should follow these guys’ advice…

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How about Fred Trump? - Posted by GL - ON

Posted by GL - ON on March 21, 2003 at 08:16:45:

You don’t hear much about him but he has his famous son Donald beat hollow.

In one of his books Donald mentions that his old man owns 24,000 apartments in Queens New York and environs. Most of them paid for, if not all of them.

If those apartments are worth $100,000 per unit that makes $2,400,000,000 (two billion four hundred million) in real estate alone.

Most of them he built himself over a period of 40 years. Apparently he builds and then he rents - he never sells.

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Squeeze the garlic eaters LOL - Posted by GL-ON

Posted by GL-ON on March 20, 2003 at 21:14:44:

Mr. Potter the 2 faced old crab. ROTFLMAO.

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Re: GOOD REI ideas? - Posted by ShELToN_n_VA

Posted by ShELToN_n_VA on March 20, 2003 at 18:11:00:

thanx, that was very helpful. I will try everything you said!

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Re: GOOD REI ideas? - Posted by GL - ON

Posted by GL - ON on March 20, 2003 at 20:17:34:

If you live off campus how much does it cost to rent a bedroom with access to bathroom kitchen and living room?
That is how much you can charge each person.

How many rooms can you rent in the house you buy? The bigger the house the more you can rent. If you keep one room for yourself and you score a 4 bedroom house that means 3 rents coming in.

Now how much can you rent a house for?

Let’s say a 4 bedroom 2 bath house rents for $1000. Where did I get that number? I pulled it out of my butt. If you want a more accurate number check out the for rent ads in the paper.

How much can you rent a room for? Let’s say $350 a month. Where did I get that number? The same place as the house rent.

3X $350 = $1050. Subtract $1000 house rent. Result you make $50 a month AND you get a free place to live. Is that OK? What are you paying now? Put that much in the bank each month along with the $50 and the $2500 you didn’t spend yet.

Now let’s say houses cost $100,000. Where did I get that number? The same place I got the rent numbers. Once again, check out the papers.

So in the rental agreement you also got an option to buy the house for $90,000 anytime in the next 3 years. Why $90,000? Why not? If the owner sells the regular way they will have to pay out 6% real estate commission and that is $6,000 right off the bat. Plus you never get your asking price do you? So why shouldn’t you negotiate a good price?

So you have the right to buy the house for $90,000. How much do you think houses will go up in the next 2 years? 5% a year? 10%? Who knows? Let’s say 5% a year. That means the $100,000 house will be worth $110,000. Do you think you could sell a $110,000 house for $99,000 by yourself? If you can, there is your $9000 student loan paid off. Plus you still have the $2500 plus the $50 a month times 24 months = $1200 plus the rent you didn’t pay which is $350 a month times 24 months = $8400.

$9,000 plus $1200 plus $8400 = $18,600

Is that OK? You may not do that well but you may do better. Check out what houses costs and what guys are paying for rooms and figure it out for yourself.

Now let me ask you. Is being a landlord a good thing or a bad thing?

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Re: GOOD REI ideas? - Posted by ebromano

Posted by ebromano on March 20, 2003 at 19:48:31:

S-

You could try and buy a property if you have a source of income and good credit. If you would want a simpler way to get the job done, you could try a lease/option deal. Find a property that you can do a L/O with. Rent out the rooms as said before. When you are getting ready to graduate, talk to you tenants parents about selling the property to them. Show them how they could make some money when THEIR child gets ready to graduate. Sell the house and pocket the spread.

A good way to do this is to target burnt out landlords. You can go to kinko’s and get some postcards made for cheap. Gp to the courthouse and get every landlord that is filling evictions. Send them you postcard. I am sure that within a month or two, you will find a property. Stay with it every week until you find the RIGHT property.

If you ever have any questions, post here or you can e-mail me. Good luck.