Any Adivce For A New Guy?
Hi, of coure I am new to this forum, but do know a bit about REI. (At the least I know half the jargon from reading a few books and courses). Still my knowledge is far from superior or even adequate really.
You see my goals are to obtain, quite frankly as much income property as I can. Seriously if that's 10 homes, or 100, I want to get every rental opportunity in my area. (I live 15 min out side of Oklahoma City, Oklahoma). Multi-family property, condos, single family homes anything and everything that is a good investment. ( Can you tell I am in my 20's 
)
One of my concerns is that I am not sure how many homes a bank will allow a single person to have loans on. I am not a financial expert but knowing the caution of banks, I am thinking 2 or 3 max. If that's true (and I am pretty sure it is, correct me if I am wrong), then how am I to own more property than that? Do I need to incorporate inorder to get more than 2 or 3 homes?
Now I am a realistic investor, I know I will not get every single opportunity for various reasons , but I can try!
Still this is my financial situation. I have 50k in cash. I can get 2 or three 5k loans if I want too. My Fico score is not high enough to get a conventional loan, but it should be soon enough (paying off my car loan first).
So what should I do? How can I begin to invest in RE? I'd like to get some income property soon, but I am thinking I might need to invest the 50k in rehabs first to build more capital. Any help would be great.
I plan to call a few family friends that are into REI (They live out of my state), and get their word too. Still I like this forum so far and the more adivsors I have the better. 
Thanks so much,
Chris
First of all, welcome to the site.
My advice would be to roam around on the site for several days and see what all is discussed. Many of your exact questions have been asked and answered here .
If you don't mind the work, and like to make money, then you can't go wrong in REI. I wish someone had steered me in this direction in my 20's.
About your delima. With $50K, the banks shouldn't be an obstical for you. Before you start releasing you funds to every ideas mentioned review several of the other forums.
Rehabbing would be a good place to start. The purchases would be reasonable and in many cases, only a down payment is needed to get control of the property.
Good Luck of your new venture
20's no problem. "IF THE DREAM IS BIG ENOUGH, THE FACTS DON'T COUNT
I'm 27 and I kick myself for not starting when I was 21.
As for banks.....Different banks have different limits. Some are 3, others 5, others 10. When you hit a max with one bank, move on to another. Move properties into Trusts and LLC's because then YOU don't own them.
Keep in mind that you will have slimmer margins and more headaches when you use a bank. Learn Sub. to, Lease Optioning, etc so that you don't have to rely on a bank or let them tell you what you can and cannot do.
50K to use....that's great, but how far will it go if you are buying traditionally? It will go a VERY long ways if you are buying creativly, but only far enough for a couple of deals if you're buying conventionally. Many people use up all of their capital on their first 3 deals and THEN learn how to do the business with "no money down"
As far as getting every deal.....It won't happen. There are too many deals of too many varieties for one person to get all of them in Oklahoma City. You'll be far better if you specialize in one or two areas, and then as you come across other things, get a commission for finding them for other people, or simply trade referals. There will be deals on farms, movie theaters, trailer parks, foreclosures, FSBO's, tax liens, warehouses, office buildings etc. Learn to do one thing incredibly well, than lots of things mediocrely.
Very good sound advice hibby76
Well this info is great, thanks esuccess, and hibby76. Much appreciated.
I see that creative investing is the only way to go to get as much property as I can. Sub to? I saw a "Sub-to" or "Subject-to" forum on here, I'm not familar with that...Any way lease options I have an idea of...
I'm thinking though...50k will earn me about 2-3 properties conventionally, but creative investing can go much further? Could I double that with creative investing?
Well I've got alot of reading to do on this entire site...I feel I really should make my capital grow into more cash if I can, before I go all out for income property. Any advice on forums to check out that would focus on creative ways to turn my 50k into more k's besides rehabbing?
Thanks so much,
Chris.
Chris,
This is my response to another similar post. It works, I am doing it every day. It's with lower end properties, but they are out there with all the foreclosures. Focus on 3 bd for the higher rent.
Let me give you a scenario.....
Purchase a 25k property cash.. (3bd home in a rougher area, but still ok)
Rehab it for 10k.....
Rent it for 750/month
Get it appraised for 60k
Finance it with 20% down....
Closing Costs are 3k...
Put 10k in your pocket at closing, pay NO income tax as this cash is financed
Have a positve cash flow of $200 + per month...
Do this 200 times over the next 10 years, pay off all your properties with extra cash flow, then check your cash flow and equity....
BTW Small local banks will do many more than 3 mortgages. I currently have 11 with one bank. The have a limit of 1.7 mil exposure which will get me to about 30 properties before I move on.
Food for thought
[addsig]
Quote:
On 2004-01-10 13:00, telemon wrote:
Chris,
This is my response to another similar post. It works, I am doing it every day. It's with lower end properties, but they are out there with all the foreclosures. Focus on 3 bd for the higher rent.
Let me give you a scenario.....
Purchase a 25k property cash.. (3bd home in a rougher area, but still ok)
Rehab it for 10k.....
Rent it for 750/month
Get it appraised for 60k
Finance it with 20% down....
Closing Costs are 3k...
Put 10k in your pocket at closing, pay NO income tax as this cash is financed
Have a positve cash flow of $200 + per month...
Do this 200 times over the next 10 years, pay off all your properties with extra cash flow, then check your cash flow and equity....
BTW Small local banks will do many more than 3 mortgages. I currently have 11 with one bank. The have a limit of 1.7 mil exposure which will get me to about 30 properties before I move on.
Food for thought <IMG SRC="images/forum/smilies/icon_smile.gif">
Telmon,
To preface, I am new to REI. In your scenario above you have to start with 25k cash..am I reading your post correct? What if your an investor that doesn't have that much cash to work with but would like to somehow make your scenario work...any suggestions?
Thanks!
Find a hard money lender who will loan for the purchase and the rehab. They are out there, might be a bit pricey but in just a couple of deals you should have the cash to go it on your own without a lender.
[addsig]
To Creative Investor Members,
I too am a new guy. My wife and I have decided to get into real estate investing. I have a grasp of the jargon from reading books but what I lack is real world experience. I am nervous about jumping right into this and would like any advice that I you would be willing to give. I would like to know how I locate properties with owners that are willing to participate in "Creative Real Estate" transactions. Also, how do I locate a broker that specializes in this type of real estate. A few real estate brokers that I have talked to have stated that either I can't buy real estate this way or they have blown me off. Thank you for time,
Collins
Welcome Collins!
Keep surfing around the forums. It won't take long to get the info you need. Good luck!
Quote:I'm thinking though...50k will earn me about 2-3 properties conventionally, but creative investing can go much further? Could I double that with creative investing?
Let's say you find a seller that will let you assume their mortgage, and with it $6K in equity. You pay $500 for appraisals and inspections, $1000 for closing and other costs, and give them $1000 to move out of the house. You then sell it to someone either on a sale (double close) or lease option. They either cash you out (and you get $4500 in your pocket) or sell it on a L.O. and get a cash flow of a few hundred a month, and they either buy or refi within 3 years and then you get $4500 plus appreciation.
Keep in mind, the example above isn't an amazing deal. Many investors on this forum would walk away from it, but you can make money.
The amount of cash on hand affects how many deals you can do simultaneously, but you will frequently get it right back at close.
Get some knowledge and skills and it won't be too long before you laugh at yourself because you used to think that you could only do 6 deals with $50,000.