Starting Out....again...!
just starting out.. again. i was excpecting to come into a few dollars a while ago and use those funds for rei but things didnt work out for me. i was discouraged for awhile so i ceased to proceed. i still want to get started at rei and wanted to know if im on the right track. im considering taking a home equity loan for about 50k and use that to invest in new construction homes in an area thats on the rise. (fla, az, etc..)of course i know i have to do some research in the areas im interested in. im also looking to use a mgt co. to forsee my properties. im looking to finance as low as 10% where possible. then renting this home or homes to build up some more equity. is it ok to break even or is a positive cash flow a must to be succesfull. i have excellent credit and have been procrastinating for the longest time now. id rather not get involved with rehabs at this time. i ve also stumbled upon readings on Marshall Reddick RE. and wanted to know if anyone has any input on this subject? thx... 
I know there are alot of "just do it" posters here who will probably encourage you, I will advise caution.
You are talking about making your first deal a new construction in an area unknown to you and having someone else manage it for you. To me that is scary stuff.
Also sounds like a very hands off approach, I have the impression that you don't really want to be involved in real estate, but are looking for a profitable way to use your money. I don't know if that is correct, or even that it matters, just what I felt reading the post.
In my opinion, it is benificial for first deals to be very hands on so you get the most education possible from the experience, and are in control of the situation.
I had a property for several years that was out of state and I used a management company. I did OK overall, but I always felt I was being taken by them. From a couple thousand miles away it's hard to know what really happens. I hated it and eventually sold the property. I have no plans to hold things long distance again.
Personally, I wouldn't consider a property that doesn't cash flow. Some will say that if there is expected high appreciation it's worth doing, they may be right, but I couldn't bring myself to do it that way. Something about bubbles. I expect if/when interest rates rise prices will drop accordingly, a $1000 dollar a month house will still cost $1000 per month, just the price will drop to offset the interest payment, a property that cashflows nicely to start with should be ok. God I hope anyway LOL.
I also got the same vibe. You might find it beneficial to hook up with an investor in your area that will pay 10-18% return on your money and will secure it with a mortgage. You may also want to get in touch with a hard money lender that can help you place the loans. They pre-screen people and you typically get the same rate of return. Only difference is typically they charge some upfront points to the borrower for their fee.
I also advise an area of caution in new construction. This is a game of the bigger boys and usually requires a better team than investing in older real estate.
Good luck. Where there's a will there's a way! Don't be afraid to fail but make sure to learn enough to avoid anything fatal! Have fun!
thanks for the replies and advice. very much appreciated. sorry i sound a bit like a sour puss. its not that i dont want to get into all types of rei investing. im just looking to get started with something as simple as possible just to get my feet wet. i ve always been the cautious type when it comes to something new. the more i learn the more i get involved. the reason i choose areas like fla, az, aside from the fact that they're still developing, is because the re costs are so much less than they are here in ny. anyway thanks again, ill keep my eyes and ears open and hopefully find something that fits real soon...
JM11 from Staten Isl
My god you must stay where you are. Here is your chance to be King of the Hill.
Ok arrange an equity line on your home. So you have $50,000 or so available. Now just do not touch it yet. You are going out and examine everything in your specific area. Forget the zeros in value. It is all relative. Use no money, play in paper until you get confidence and experience.
Example: Go down to the local real estate office, pick out the fatest ugliest salesperson you can find. No no not me I'm out here in LaLa land, but we all look alike, most have drifted into the profession having failed elsewhere. Now you ask them to expose their listings and to explain to you the goods and bads. After all you are going to use them and they stand to make money. So show you everything.
Thus starts your true education. Hard to imagine you can learn from the likes of us. But you can. Ask questions and do not be afraid to play the fool. They all think most people are fools so enjoy it.
You will learn alot, but do nothing yet. Now you will start the next part. Down to the Hall of Records or Court House wherever foreclosures are handled. Once again you hang around and you will find ex court employees and all kinds of people who do little researches into cases and foreclosures. Learn the exact path followed from missed payment to sale to redemption periods if any. Learn it all.
This is like school but it is much more interesting cause this is a "Street School"
These are the best ways to learn, It is fun and interesting and you are learning something that you will be using.
OK. Start there. Do not invest your equity money until you learn the street.
Try and do all this in a few weeks. I am an old man, I am trying to enjoy these Golden years which incidently just plain Suck! When you think you know all the paths that properties take as they go delinquent and you know how the Real Estate Agents act and where their information comes from. Then post back here and all the Gurus( posting as Newbees) will advise you. You will not get rich but you will be well off. And, it is a lot of fun.
Lucius
thanks for your advice lucious ! it s much appreciated i printed out your reply and will follow your advice and hopefully make good on this as soon as possible. thanks again...
Just do it jm11.
Lucius know his thing. Don't listen to those how would like to see you fail. AZ, FL and pre-construction purchase also sounds great to me. Builders need money and will spend it all. So far you heard few good pointers as for the streets so what are you waiting for? Go spend your time and come back reporting live form Staten Island place. Deals are everywhere. Keep you job though or the next time your go to D' Agustiono, keep the shopping cart. It comes handy when you have a lots of stuff to push. I am newbie and I did my first couple of deals just weeks after I start reading several books and few posts on this and other RE investor sites. Lufos directed me well and I am still hopping to make some money in few weeks so I can gratefully forward him his part.
Good luck! Good bless and happy investing!!!! [ Edited by DealerJo on Date 03/14/2004 ]