OK, just want to make sure the point is made. You're trying to trade the real estate market like the stock market....looking for appreciation. I'm OK with that if that's what you want to do. But let me point out that somebody thought Miami condos were a good deal at the peak. Those could have been guys who had been buying all along, and have now lost some or all of their profits. Or they could have been newbe's who just discovered Miami real estate. Hard to say. The point is that you better be damn smart about where the real estate is going to do what you're talking about, because there are some significant costs to hold and sell, and you better be sure that your timing is actually a time like 3 years ago, and not a time like 6 months ago. To contrast that, I only buy at a discount similar to what I set forth in my post. That means that had I been in Miami (I wasn't), I probably wouldn't have been able to buy anything. But the point I want to stress is that I would have missed buying at the peak. I was in So. California at the peak in 1989. From there the price dropped let's say 30% or so over the next few years. Anyone who had bought anywhere near the peak lost money for quite a few years. But someone who bought at a large discount of the type I'm describing had a cushion if he needed it (and he did if he held the property). In fact, if someone bought with the type of discount I'm talking about, he would have cushioned the entire decline that followed. And that's the point really, that buying "distressed" real estate at discount is the only way I know of to play the real estate game safely. "Flipping" in a rising market presumes that the rise continues, and that you are able to predict that. Yes, it's true I won't be able to buy in a hot market....but I may have properties that I hold from a time prior to the hot market, that I sell at top dollar. Nothing like selling above your listing price in a competitive bid! Each to his own though...if you would prefer to predict the real estate market, be my guest. Good luck with it. OldTrader
im into rentin' and wouldnt dream about sellin' anythin'..maybe buyin' every now and then if the opportunity arises otherwise flippin' bricks too risky for me..if u are after serious advice ask et member Banjo...hes an espert in estate/housin'.
I have had experience in flipping houses in the late '70's - early '90's and I have learned, the hard way, the ins and outs of what to do and not to do. Maybe I can save you some grief. This is what I have learned. I read a book in 1978 on buying, fixing up then selling or refinancing apartments and homes. I was green enough to think the book gave me all I needed to go out and make these kinds of deals work. I ran into one brick wall after another. After reading other simular books I discovered that these authors all say the same thing, "Don't worry about the details of the transactions, just go with the "basic idea" and the details will fall into place." Wrong! My not knowing the details made me feel and look like the world's biggest idiot. Not knowing the details can kill you. Another problem I had was negative thinking brokers and realtors. They are mainly concerned about their commissions. Their favorite kind of deals are: 20% down, you qualify for a new loan, you go through a lengthy escrow, you pay points and fees, you close escrow and move into the house with your wife and 2.3 kids and live happily ever after. This is not the way Investors work and that is what is so hard for many agents to get through their heads. The first thing they look for is, "where is my commission coming from?" If they see a creative transaction that they have no experience in dealing with, they will shoot your plans out of the water. I have had agents look at my offers and laugh at me from across their desk and even call in their fellow agents to look at my "stupid" offer and join in a good laugh at my expense. What they were really telling me was that they had no experience with creative offers and did not want to look like they knew less then their client so they try to steer me back toward the "normal" way of buying a property so they could maintain their "I'm an expert" facade. Normal deals are safe for them. Some agents are very creative and worth their weight in gold. It took me a while but I began to realize that the books I was reading were accurate and these deals do work but they were not as easy as implied. Before doing any deals: 1. Study books and tape sets on creative real estate transactions. Get to know this stuff inside and out. Don't brag to any one what you are going to do. Keep quite. People love to pull others down. 2. Go to the Law library and get copies of all of the forms you will need to make various types of transactions work and study them with a fine tooth comb. 3. Go to a real estate lawyer and have him walk you through the various steps that you will encounter in each type of transaction. Do the same with an Escrow agent. Pay them some money to teach you. These pros may not be "creative doers" and may try to discourage you but they do know what can and cannot be done leagally. Remember, it is technical info you are looking for. 4. Learn all you can about "Subject to..." clauses. These can help you back out of a bad deal if you have to without losing a penny. Talk with a lawyer about these. 5. Learn good communication skills. Listen to the other person. Understand where they are coming from. Always think "win-win." Look people in the eye when you talk with them and when shaking hands. Be firm but pleasant. Talk "with" the person, not "to" the person. Study books on poise, self-confidence, body language, voice, dressing for success, etc. But, don't over do it. 6. Find several cash investors who are serious about properties and can move like lightening when the time comes. You want serious investors only. No foot draggers! Get to know them and their needs and ideas. Let them know what you do and make sure they know that you work at your own pace. Don't let them push you. Having serious cash investors in the wings can work miracles for you, both for the transaction and for your self-confidence! Stay in the driver's seat. Most good deals will not be found through Realtors at first. They sniff out these deals long before you ever see one. I have dealt with some very good agents but I must have dealt with some of the worst to. But, if you have to deal with an agent here is what I suggest: A. Look and behave like you know what you are doing. If you buy a fancy solid gold writing pen to impress the pros, learn how to use it before you get there. Look and act professional but don't over do it. B. Tell the agent up front that you are an investor, not a home buyer. You buy to re-sell, not to live in. Tell him that you don't use your own money. In other words, be upfront and honest with the agent. If he dosen't like what you do in any way shape or form, look them in the eye, shake their hand, smile, thank them for their time and walk out! Don't let them mold you! C. Don't "grandstand." Be honest. Don't make comments or promises that you may not be able to keep. Don't drop names of people you don't know. Forget the, "Aristotle Onassis and I put that deal together..." if it is not true. If it is true, a subtle hint works better. Don't make yourself appear to be someone you are not. I bring this up because I had dealings with a guy pulling this crap on me. It made me want to puke. Now, straight from the shoulder - A good solid education in real estate transactions is the most important thing a person can develop. Not only will you be more successful in closing deals but you will also be able to find deals where others can't, including today's market. Looking like a professional and behaving like a professional is extreamly important but if you do not have the knowledge, there are pros out there who will see right through you and the doors will slam in your face. I have been chewed up many times in my early days. You have got to know what you are doing. You don't strap on skates for the first time and then take on Peggy Fleming. She will eat your lunch, big time! If I had to start over again, I would follow these ideas. They would have saved me so much grief, time, money and some hair. I hope this help's you. -1bigsteve (o:
You're welcome, Brownsfan. I hope you get all the success you are looking for in real estate investing. One thing I forgot to mention. There are many books and tapes on real estate investing, and stock trading and anything else for that matter, written by people who may have been slandered, sued, retired, dissapeared or whatever. Don't let the negative publicity prevent you from studying their material. Successful people have a bullseye printed on their backs and the media loves to bring successful people down and everyone loves a "scam" story. It makes them feel good. Just because some former "guru" is now being slandered doesn't mean he/she is guilty. Their information may be right on target. Just because Mike Tyson has troubles in his life does not prove that he does not know how to throw a punch. I once attended a real estate 2 day training program of a guy who misrepresented himself. I saw through his facade but I took the course anyway and I'm glad I did. What his course taught was 100% accurate (I verified it all later) and it was taught by expert real estate investors who had years of proven experience. I learned the details of double escrows, assignment of contracts, lease options, etc. It really got me going. There will always be someone trying to pee on your ideas but with a good solid education in real estate you will be able to cut through the piss and once the "experts" realize that you know what you are doing the pissing will stop. Pros love to "stay in control" and they do that by making you think you don't know anything. It can be very humiliating. I still have bite marks and pee stains on me and I can still remember the humiliation I felt walking out of their offices feeling like I was 2" tall. Once I got the knowledge in my head, which gave me self-confidence, the snow jobs stopped. When you find a good professional hang on to him or her. They are out there. I wish you well. Have fun. -1bigsteve (o:
Actually, it is never too late for making money in real estate. There will always be someone who needs to unload a house quickly. If you have the knowledge in making deals work, and know where and how to find these deals before the masses do, you can knock the clackers off the competition and make money. Knowledge is not power. Knowledge + action = power. It takes a lot of effort to find those deals but they are out there in any market. Even now. -1bigsteve (o:
It is like trading full of fakes & sharks. Check out the gurus here: http://www.johntreed.com/Reedgururating.html I do not know why you want to fight against the RE down trend. May be you have more money to spare/risk. Good luck!