8ballEinstein said:
Hmmm...I'm curious what the downside is.
I'm asking because it seems attractive to me. Of course, I know squat about this but, I did attend an interesting seminar on the subject recently. I'd like to hear where you think the smart money is going.
Hey 8ballEinstein,
There are a lot of good things that can come from investing in real estate. I don't mean to discourage you. The biggest problem right now is that we are still in a declining real estate market. You could buy a property today and have it lose 10% or more before the market moves up again. During the time that you are waiting for the market to go in the other direction, you will be faced with repair issues (as most forclosure homes are not taken care of by the owners), mortage payments while your gettting it fixed and looking for tennants, expenses that come along with the puchase itself, and probably a half dozen or so more expenses that the forclosure gurus fail to tell you.
I've done well in some transactions. Others were a flop. Part of the reason that I have actually been able to show a profit is because I have a RE license and many of the fees involved either do not apply to me or I get a break from people that I know in the industry.
The last fix and flip that I did was a nightmare. I put 3 months of time and about 25k into the place just to have the tennants literally destroy every cosmetic feature of the home. It left a bad taste in my mouth. I'm sure I'll do it again but I feel that this market is way too unpredicable to be banking on immediate returns.
I'm not going to say that I am an expert on this, but I have flipped a dozen properties or so, I associate with people who do this, and nobody seems to be in a hurry to buy residential right now.
I'd say just do your homework before you buy something. Investigate contractor fees, costs of purchase, resale, finance charges, advertising, etc.
I would also get a good realtor to assist you if you haven't done it before. They will have most of the resources you will need to help you pencil out the figures.
Take care and good luck should you decide that doing something with real estate is right for you.
Louis
PS: Based upon recent studies, the forclosure rate should remain high until mid 2010. Time is on your side