Nickajack Angler
Well-known member
Everytime I visit with my father in law, I shake my head and wonder why I never invested in rental property as younger man. He lived in Green Bay, WI for 50 yrs and each time a friend, neighbor or family member moved out of town, he bought their home or duplex. When he "retired" to Ark. about 8 yrs ago, he sold them all (last I heard, 60+ properties) and had quite a payday when he did so. He now golfs and fishes and sails at really great places all over the world. When my wife came home from Ark. after her recent visit, I wasn't surprised that he had snapped up about 10 properties in his community and rents to friends!!! It makes me think of ways I can make some headway toward retirement, so I thought I'd share some insight with those of you that are around the same age and wonder about investing in Real Estate. We know it works, but HOW?
FLIP THAT HOUSE -
My friends know that a buddy and I "flipped" 8 houses in the last two years. It creates a lot of discussion and I'm always amazed at how many people watch that show or ones like it and feel they have what it takes to do this tactic to make some money in real estate.
Commonly I am asked "Is now a good time to flip a house, in this market?" The answer to that is not a simple one. When you can buy a house for $150k. Put $5-$10k into it, and sell it for $190k = $30k+ profit in 60 days!!! - is the "Flip that house" business model. There are these "success" stories we all hear about, but it's more about being prepared, getting informed and having experience in your own home ownership. It IS NOT THAT EASY... Those shows on TV don't show you the houses they lost $60k on or maybe still own and are having to rent at a loss... Should a "flip" be considered?
If you understand the current market is deluged with many homes on the market and these homes are taking a long time to sell - then you know the above example is becoming less likely for many investors who seek this type of risk/reward. Many sellers are strained by the lack of buying activity. But if you are secure and want to try to seize the positive market condition to make money (Buying low and selling high), now may be a good time to build your real estate empire. Homes prices have finally fallen from people accepting much less than they originally intended when they started the selling process - our home in MN recently took from May to Jan to sell - $100k less than our starting ask price. If you can invest in a home that can be cleaned up and rented with as little effort as possible, you would be in a better position for the opportunity to make some long term gains for the next trend "UP" in the real estate market. I see a lot of people in the small community I live in, buying small houses for families that need a "quality" place to rent - there is VERY LITTLE rental property in Marion Cty. that's not an apt and not a"run down home". With a little paint, maybe appliances, light fixtures and water fixtures, you can really spruce up a home that can draw a quality renter - with truly minimal money and some elbow grease. The rent pays for much of the home if not all of it (many are at or around $100k!) as well as the tax advantages of renting property (seek advice from a professional tax planner). If you like the "Flip that House" idea, you may have a much longer time to sell that improved property and not turn a profit until it sells, which currently is much longer than other times in the last 25 yrs. Your cost in the project goes up as each month passes. And renting for profit is subject to your obtaining the property at a low enough cost, low enough that you can make a dollar. Renting property as an investment strategy is not for the faint at heart, but for those of you that enjoy "making" something... Enjoy the sense of accomplishment to make a house a home, and especially you have the ability to do much of the work yourself, you could find a great time in history to turn that into savings for the future; if not a profession. Hopefully it will be easier to pay for college when it's time for Louie to go. Instead of cashing out 401k's and other investments, we can sell a home and take the proceeds and have no worries.
I have worked in Financial Services for over 18 yrs and pretty much have an opinion on most topics anyway... if you are in need of help in obtaining financing for a home, or have issues you would like to bounce off of someone, I am happy to help any of my friends on CFF that have given to me in the same way. Mortgage, credit, finance issues.
FLIP THAT HOUSE -
My friends know that a buddy and I "flipped" 8 houses in the last two years. It creates a lot of discussion and I'm always amazed at how many people watch that show or ones like it and feel they have what it takes to do this tactic to make some money in real estate.
Commonly I am asked "Is now a good time to flip a house, in this market?" The answer to that is not a simple one. When you can buy a house for $150k. Put $5-$10k into it, and sell it for $190k = $30k+ profit in 60 days!!! - is the "Flip that house" business model. There are these "success" stories we all hear about, but it's more about being prepared, getting informed and having experience in your own home ownership. It IS NOT THAT EASY... Those shows on TV don't show you the houses they lost $60k on or maybe still own and are having to rent at a loss... Should a "flip" be considered?
If you understand the current market is deluged with many homes on the market and these homes are taking a long time to sell - then you know the above example is becoming less likely for many investors who seek this type of risk/reward. Many sellers are strained by the lack of buying activity. But if you are secure and want to try to seize the positive market condition to make money (Buying low and selling high), now may be a good time to build your real estate empire. Homes prices have finally fallen from people accepting much less than they originally intended when they started the selling process - our home in MN recently took from May to Jan to sell - $100k less than our starting ask price. If you can invest in a home that can be cleaned up and rented with as little effort as possible, you would be in a better position for the opportunity to make some long term gains for the next trend "UP" in the real estate market. I see a lot of people in the small community I live in, buying small houses for families that need a "quality" place to rent - there is VERY LITTLE rental property in Marion Cty. that's not an apt and not a"run down home". With a little paint, maybe appliances, light fixtures and water fixtures, you can really spruce up a home that can draw a quality renter - with truly minimal money and some elbow grease. The rent pays for much of the home if not all of it (many are at or around $100k!) as well as the tax advantages of renting property (seek advice from a professional tax planner). If you like the "Flip that House" idea, you may have a much longer time to sell that improved property and not turn a profit until it sells, which currently is much longer than other times in the last 25 yrs. Your cost in the project goes up as each month passes. And renting for profit is subject to your obtaining the property at a low enough cost, low enough that you can make a dollar. Renting property as an investment strategy is not for the faint at heart, but for those of you that enjoy "making" something... Enjoy the sense of accomplishment to make a house a home, and especially you have the ability to do much of the work yourself, you could find a great time in history to turn that into savings for the future; if not a profession. Hopefully it will be easier to pay for college when it's time for Louie to go. Instead of cashing out 401k's and other investments, we can sell a home and take the proceeds and have no worries.
I have worked in Financial Services for over 18 yrs and pretty much have an opinion on most topics anyway... if you are in need of help in obtaining financing for a home, or have issues you would like to bounce off of someone, I am happy to help any of my friends on CFF that have given to me in the same way. Mortgage, credit, finance issues.
