Re: what do I do next??? - Posted by Ronald * Starr
Posted by Ronald * Starr on June 26, 2001 at 15:14:53:
You’re doing well, I would judge. Typically the net wealth of real estate investors does not go up much at the beginning. Maybe even down, because of the transaction costs that sunk into buying properties and are not recoverable. Having 4 properties already is fine. Expect to take about 10-12-15 years to achieve financial freedom with real estate. Unless you really are a ball of fire and have no other life.
Just sitting with properties for the long term is fine.
Paying down the loans early is a personal choice. Try to think through why you want to do it and what other alternatives you might do. Generally, I would rather pay the loans down minimally unless they are lines of credit, in which case I will pay whatever I can on them, knowing that I can borrow it out again easily if I need it. Otherwise, I would rather keep my cash liquid to pay for some bargain I run across. Having the money tied up as equity in properties does not appeal to me.
Some people do very well with vacant land. It is a bit of a tough racket since the only incme is usually from selling. Rarely will you have rent. You might have some mineral income if you have oil or gas on the property, but I think that is unlikely in AZ.
You have to buy very low and then sell at or near market value. Is there any demand for vacant or “raw” properties in your area? Talk to a lot of the real estate agents. Check sales records in the assessor’s office. What kinds of properties sell?
You can buy bargains at probate sales, foreclosures, tax sales, and tax liens, and just solicting owners from time to time. See Roy Stubblefield’s web site on tax liens. See Jack Reed’s excellent book 'How to Buy Real Estate for at Least 20% Below Market Value" website johntreed.com .
Then sell on easy terms. It works a lot like “Lonnie Deals” in mobile homes. Except there will be a lot of people who buy for the future and then will default on their loan to you. Be prepared to foreclose and resell the properties to somebody else when you get them back on the foreclosure sales.
Since you say you have time, study now. Study real estate investing books. If you can take a course at a community college, you might want to do that.
Scope out the real estate situation in your area, county. Look for records of bargain buys in the country records and then try to figure out or find out how the buyers did it. Talk to the sellers if you can.
Look for a need and fill it. Look for a niche – there are riches in niches.
Learn what works where you are and what you like to do. Then you will continue doing it until you are as rich as you want to get.
Good Investing*****Ron Starr**********