Newbie question - Posted by Champ

Posted by GL(ON) on December 21, 2006 at 09:57:17:

You are in over your head here. I wish I could tell you in 2 minutes what to do but it took me 20 years to learn and I can’t boil it down that far.

Best advice I can give you is to read some success stories and other articles on this site to get some ideas of what you can do with real estate.

Real estate is so versatilve you can accomplish practically any type of financial goal with it. So figure out what kind of investing you are interested in. Figure out where you want to be a year from now, 5 years, even 10 years from now. Map out a plan then start studying investing, and then go out and make a start. Come back any time you have any questions and someone will help you.

Newbie question - Posted by Champ

Posted by Champ on December 21, 2006 at 08:36:27:

I would like to purchase a couple rentals in an area that I used to live in. There are two that I am currently inquiring about. One is a 4plex and the other is a duplex. the are on sale for $175,000 and the other is for 225,000. I e-mailed the realtor to see if it was fully occupied and how much it was renting for. Are there any other questions I should ask? Also since I am not in the local area I am not there to actrually see the property so I will be depending on friends and family to do some of the legwork if I do decide to do it. I don’t have the best credit either. my score is around 630. Is this a good idea? And if I decide to do it, can I get %100 financing?

Re: Newbie question - Posted by Mike-MD

Posted by Mike-MD on December 21, 2006 at 19:27:20:

I am not a Newbie, but sure not a very experienced investor. I own 2 properties and will sell both to finance a bigger one that is being built. In the past few months, I have looked at many options of buying, selling and financing to try and keep one or all 3 of these. Since you are a Newbie, stick with one of the properties so you don’t get in ove your head–even though they may be good deals. David B adn GL(ON) bring up some good points, but go slow. Someone in the industry told me “steady plodding” is the way to go.

Re: Newbie question - Posted by DavidB

Posted by DavidB on December 21, 2006 at 10:37:11:

You’re on the right track, but there’s much to consider in what you are suggesting. First, focus on the 4plex. Do you know the area where this building is located? Is it appreciating? What’s the area like? What state is this in? What are the 4 units renting for now? What are comparable rents in the area? Figure out what the total income you can expect if all 4 units are rented out for the year. Then you need to look at expenses. If you get a mortgage (and 100% investment will be costly, especially with a 630 Fico). Add up your mortgage costs, insurance, taxes, upkeep (is it an old building? what kind of shape is it in?). YOu also need to figure in that you probably won’t keep all units rented all year. Typically you should subtract out about 25% of the total income you figured up above. This will give you an idea if this deal makes sense. I would caution as a newbie not to do a deal from afar, unless you feel that the market is especially strong and growing or you get an amazing price based on it being a declining market.As you can see there are many things to analyze before you make a decision. Get more details and come back here and we can further analyze how the deal looks.