Investors First Purchase
I have been and starting out looking at real estate books and have been stuck on what I should concentrate on for my first purchase. One of my friends got his start by buying condos. I also have heard that condos are hard to sell and don't appreciate.
This investor should
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hello --- not a typist so excuse the typos RE is magic the ultimate way to develop a position of absolute financial security and independence.... ck out the idea of lower end sfh available in all parts of the country with a little bit of care learn to analys and limit cash out out try the ivestor pak AVAILABLE AT REEA.COMMM CK OUT your local reia assoc library if u are in the FL area visit us we have lots of free stuff and available help for vey low cost I will be glad to share specific ideas... stay away from condos as some one else is making financial deciasions that will affect u and without a unique [osition your income is determined by others not a good way to go
What you should concentrate on depends on your interests, skills, and ability to take risk.
You have noted a concern regarding condos. They do not appreciate. You must have good rental income to cover your debt service.
I went for older doubles. They rent to lower income people. I paid $50,000 for them, and rent each side for $500. When I bought my doubles, I financed $40,000. My payments are $425 PITI (principal, interest, taxes and insurance). That leaves $575 in cash flow. I have a crew that does all of my work. When you consider life expectancies of mechanical systems, vacancies, etc., my overhead runs about $320 per month. That leaves me with $255 per month in "in my pocket" income.
I prefer 3 bedrooms to 2 bedrooms. When in a crunch, you can lower your rent to entice someone looking for a two bedroom into your unit, therefore increasing your market. You cannot increase the 2 bedroom market by pulling in people that need 3 bedrooms. You don't have the required space. You can bring int he singles market, but they move too often as a whole for me.
Looking for under priced homes that you can flip is another good way to make money. Someone needs to move, or they need to sell because they got in over their head. You come in to save the day. You buy, then you sell. You take the risk that you can sell quickly enough and at a high enough price to make a profit.
If you have a lot of cash, you can consider buying and then being the bank by selling on land contract. Get 12% on your money.
I hope this helps.
Russ