Real Estate Investing
While it takes $200 - $500 to get started in those businesses, you can buy rental property with no money down. Some investors flip properties (buy and sell immediately). My experience is with buying and managing rental properties. I'm often asked about timing... When is the best time to get into this sort of endeavor? The answer of course, depends on you, more than on the market That means when you have the time, some investment cash, and the desire.
With rental property, cash flow is the name of the game. Whether you use a significant down payment or creative financing to keep your payments and maintenance costs below the rental income you receive, it matters little once you've bought a rental. What you want is a property that pays for itself and gains in value and equity every year. What you don't want is an alligator that takes a large bite out of your family's income every month. For this reason I prefer single-family homes as rentals. They're much easier to rent. Commercial property can stay empty for months at a time, and apartments leave me cold.
You should have a pretty good idea about your exit strategy going in.
It will have a direct impact on how you set up purchase financing.
Some investors buy several properties (that fit their strict criteria) over a few months time. These people usually act strictly in a management role. They tend to put their emphasis on refinancing, bidding out repairs, taking bids on insurance coverage, and similar actions. Others use the one-a-year, fix-up strategy. These folks often do their own repairs and maintenance. Either way, cash flow is king! Some real estate investing businesses partner a money person with an operation person and employ either of the above strategies. What resources do you need within the first six months?
How do you find this attorney? Ask a clerk at your local court where eviction cases are heard. This attorney will save you time, money, and most importantly... aggravation. Over time you pick up other resources as needed, such as a carpet layer, roofer, and estate attorney. How do you find property to buy? Several ways, including:
Someone like your attorney may put you in touch with a tired landlord looking to sell out. These are the people that understand the need for creative financing and cash flow. You should have a pretty good idea about your exit strategy going in. It will have a direct impact on how you set up purchase financing. If you change your mind later, you can do some finance restructuring. Here's an Arizona residential rental real estate investing resource. Most other states have a similar resource. Will you want to sell out and retire eventually? Or will you keep the properties, and pass them on to your kids? There are many tax and estate planning issues involved. Real estate investing can provide current income and long term equity build up. If yours is a short-term real estate investing strategy (10 years, or so) you'll probably sell out and take your equity earnings. If you're into real estate investing as a long-term venture, you may eventually want to pay off each property. You can do it with excess cash flow. Start with the smallest mortgage, pay it off first, then work on the others one by one. Over time your investments should do very well. If you buy 5 homes at 20% below the current market (very do-able) and keep them twenty years, you should have a million dollar portfolio. And over those years you can enjoy positive cash flow and depreciation.
Real estate investing is serious business that most anyone can do successfully.
Here are links to the other South of Flagstaff Arizona real
estate pages...
Pinewood and
Munds Park real estate
Timber
frame homes are unique and elegant
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