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Old 10-25-2010, 03:49 PM
 
2,592 posts, read 4,891,085 times
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Quote:
Originally Posted by nigelstephnie View Post
There are many businessman who go for real estate now a days cause they found easy money.
You hardly ever hear about all the businessman that lose their money in real estate. You only hear about the ones that made out. Real estate like many things is still a risky business.
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Old 10-25-2010, 04:05 PM
 
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when you loose you loose big because its usually leveraged and you can loose many times what you put in.
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Old 10-27-2010, 02:14 AM
 
Location: Troy, Il
764 posts, read 1,462,230 times
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^ Thats why Dave says to only invest in rental property if you can pay 100% cash. It's true that most people can't afford to do that but then Dave says " well then you can't afford it." Makes sence to me. I know that a lot of people believe in leveraging real estate property because it gets such higher returns on your investment, but there is something they never take into account in any of the real estate books i've read....personal labor. A lot of work for a high return on a little cash invested = even less cash pocketed. (Big pain for small gain)
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Old 10-27-2010, 02:59 AM
 
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ill sum up my experiences landlording...ITS GREAT WHEN ITS GREAT BUT THE EVENTUAL AGGREVATION MAKES IT A HORROR SHOW.

no matter how picky you are chosing tenants eventually divorce ,illness etc turn even the best of tenants bad. then depending where you are you now have courts ,judges and lost revenue to contend with.

not something i would want to do anymore as a passive investment.
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Old 10-27-2010, 08:45 AM
 
398 posts, read 767,984 times
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Quote:
Originally Posted by StealthRabbit View Post


Oh, but the correct mix of RE CAN be quite passive. 20 - 40 units will avail opportunity to hire a manager. Commercial NNN you just collect checks, the tenant does all repairs and pays your taxes and insurance. A good quality REIT (Be Careful ) can be passive and Profitable as well as cash flow.
Do some states require you to be a landlord of single, or smaller unit rentals before you can become a landlord of 20-40 unit buildings?

I could be wrong but in NY I beleive this is the case. You can not just decide one day to buy a multiple unit building and rent it out, legally.
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Old 10-27-2010, 08:50 AM
 
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I never heard of any thing like that in ny
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Old 10-27-2010, 12:16 PM
 
Location: Chicagoland
5,728 posts, read 9,290,566 times
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Obviously, everyone's experiences are different.... I have been highly leveraged in investment real estate for almost 20 years and it has worked out great for us. I am not trying to sell a book or anything, just presenting that it can work well for the right person, in the right market (despite all the warnings from others - and I've heard them all).

Yes, we have had to work hard (especially in the beginning when we were doing our own renovating and maintenance). But we are proud of what we have built and the freedom it has afforded our family. It has not been the horror story that many others have experienced. We started with absolutely nothing, scrimped and saved to acquire real estate, and then leveraged that into buying other businesses. Now, during this recession, we are not worrying about how to find a job. We work for ourselves.

With rentals, there are many things you can do to minimize problems including such basic things as conducting thorough credit/background checks, getting higher security deposits and co-signers, following eviction processes by the book, buying in areas that have more landlord protections, etc.

Last edited by GoCUBS1; 10-27-2010 at 12:33 PM..
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Old 10-27-2010, 03:01 PM
 
2,592 posts, read 4,891,085 times
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Quote:
Originally Posted by mathjak107 View Post
ill sum up my experiences landlording...ITS GREAT WHEN ITS GREAT BUT THE EVENTUAL AGGREVATION MAKES IT A HORROR SHOW.

no matter how picky you are chosing tenants eventually divorce ,illness etc turn even the best of tenants bad. then depending where you are you now have courts ,judges and lost revenue to contend with.

not something i would want to do anymore as a passive investment.
Agreed. I've talked with many landlords and some like and others hate it. It certaintly isn't for everyone. All will agree though, it is not easy. I still hear people talk about buying a single-family home as an investment. This is the wrong thinking. It is a place to live and will cost you money.
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Old 11-03-2010, 07:58 AM
 
62 posts, read 139,417 times
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Perhaps my post will be removed for violating forum rules, but I would highly recommend the website BiggerPockets. It is a social networking site of real estate investors, agents, brokers, bankers, etc. that provide great information in their threads on investing in RE, you'll have nearly every question answered - and if not you can ask it and have it answered directly in the forums....and it's free.

As to this being a good time to buy real estate, yes I think so. Housing prices are still down significantly, if not completely bottomed, but you cannot time the absolute bottom in any market - it's akin to catching a falling knife.

Bottom line is this:
1)Interest rates are at historic low's - get a fixed interest loan and lock the rate in
2)You can leverage your investment by putting only 20% - can't do that in stocks (you can margin but not 80/20)
3)Real estate provides positive cash flow (if you make the right investment)
4)Real estate is just that - a real asset - it provides shelter and a home
5)Bad real estate markets and unafforadble housing promote renting
6)Inflation will return and it's an inflation hedge as well as the fact that rents will increase over time
7)RE is perhaps the greatest tax shelter of all (especially if you are a "real estate professional" in the IRS' eyes)
8)RE investments can be made to be passive
9)Our population is set to increase at least 50% in the next 25-30 years or so - housing stock will be short supply.

For these reasons, RE is a great investment IMO. Get on BiggerPockets and do some research as to how to properly find positive cash flow investment properties in good areas.
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Old 11-03-2010, 10:09 AM
 
Location: Chicagoland
5,728 posts, read 9,290,566 times
Reputation: 6927
Quote:
Originally Posted by jaham View Post
Perhaps my post will be removed for violating forum rules, but I would highly recommend the website BiggerPockets. It is a social networking site of real estate investors, agents, brokers, bankers, etc. that provide great information in their threads on investing in RE, you'll have nearly every question answered - and if not you can ask it and have it answered directly in the forums....and it's free.

As to this being a good time to buy real estate, yes I think so. Housing prices are still down significantly, if not completely bottomed, but you cannot time the absolute bottom in any market - it's akin to catching a falling knife.

Bottom line is this:
1)Interest rates are at historic low's - get a fixed interest loan and lock the rate in
2)You can leverage your investment by putting only 20% - can't do that in stocks (you can margin but not 80/20)
3)Real estate provides positive cash flow (if you make the right investment)
4)Real estate is just that - a real asset - it provides shelter and a home
5)Bad real estate markets and unafforadble housing promote renting
6)Inflation will return and it's an inflation hedge as well as the fact that rents will increase over time
7)RE is perhaps the greatest tax shelter of all (especially if you are a "real estate professional" in the IRS' eyes)
8)RE investments can be made to be passive
9)Our population is set to increase at least 50% in the next 25-30 years or so - housing stock will be short supply.

For these reasons, RE is a great investment IMO. Get on BiggerPockets and do some research as to how to properly find positive cash flow investment properties in good areas.
Great post. I also want to add that, unlike other posters, I do not find real estate investing/landlording particulary hard/stressful as compared to other endeavors I have undertaken. I found it harder working 60+ hour work weeks at a corporate job.

R.E. may be more active than stocks, etc., but I agree it can be made more passive. I find, if you buy the right property and have the right processes in place, it is fairly easy to manage (and, for me, even enjoyable). I suppose some people find dealing with tenants very stressful, though I have rarely felt this way (even after 15 years and many tenants). IMO, real estate (and small business start-up) are some of the best avenues for those of humble beginnings to prosper based on their own talent, hard work, risk tolerance, and ability to highly leverage their initial investment.
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