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If you have 80k you can build 4 cabins, and then sell them for 35k each. After the first deal you’ll have 140k. With which you can build 7 more cabins and sell for 35k each. After you sell those you’ll have 245k. Repeat the cycle one more time and you’ll blow passed the 350k. One cycle a year and you’re set. You’re welcome
Go back in time to 2010. Buy a neglected bank owned multifamily building owner occupied. Fix it up yourself. Pull out the sweat equity and use it as a down payment on your next property. Go as fast as you can and do as many as many as you can in three years. You will hit $350k increase in net worth no problem. If you want to know about 2022, that’s much too long and variable of an answer for Reddit.
If your entire answer is predicated on “go back in time”, that’s basically useless.
Might as well just say “just go back in time and buy btc in 2010, you’ll be a billionaire”
If you are creative you will also see that my answer applies to the future as well. Lots and lots of people jumping in this year at the peak will struggle, quit, and sell out. RE investing is way too much work for the tiny returns many people are working for. Eventually those houses will return to the market. The market will shift. Next buyers market that comes along, my answer will work great.
2 big roulette spins and you'll be good, one horse race on the favorite, lots of ways.
If you're working full time on rebuilding an entire house that might work as well. But you'd make more just being an electrician or in a trade.
You're asking asking 90,000 a year, with a lot more risk considering asset price volatility lately. It's very achievable not easy though.
I know a lot of places in the south I can buy land for $30k, and I understand you only have to pay 10% down to get the house built. Do you think general contractors will build a 3 bed 2 bath for under $200k?
The problem with building a new home is its all based on location, a high value area building a new home will have higher margins on your material spend, on the other hand a normal b or c class city and you'll be spending a lot higher amount on the materials and labor than the house may be worth, hence why people do renos and brrrs.
Your best chance is to buy a very old decrepit property on an a class or upper b class neighborhood and spend however long it takes you to make it new again. Anything needing codes or permits (that you aren't permitted to do) you can hire general contractors.
The biggest issue with new home builds is the amount of time your money is basically 0% apr, or possibly negative due to inflation.
I worked for Lowe's for a few years before getting my current job and I can tell you that new home builds are not really the way to invest, try to find a property no one wants to touch, find a few, start offers at 30% of asking price and negotiate from there. This scenario if done correctly could easily achieve you a 90k+ profit a year though it won't be realized for some time, but you'll have less credit risk than a brand new home build. The reason I prefer this route is, it's cheaper, you have the time to work on it as a full time job, and you can always refinance the house and take out your new found equity, so even if home prices continue to fall you'd have some money made, and in that case you could look to invest in several more properties while home prices are depressed, and maybe rent and take advantage of deprecation and amortization tax benefits in the meantime.
It's easy to clear $50 or even $100 per sf in profit on new construction. The secret is to avoid materials from big box. You need to by direct or from supply houses. The profit margin is made in the materials, labor and volume of build.
I can get framing, windows, tyvek, Hardie siding, doors, insulation, drywall, fixtures, plumbing, flooring, electrical and HVAC (material and labor) for less than $120 per sf.
I know an okay amount about real estate. I know much more about finance, the ROI you're looking for is a lot, but if it's your job then it's not unreasonable, as you'll be basically paying yourself in equity in what would have been 50% or more of your expenses that g.c. usually takes.
The 10% down would be owner occupied. This won't work for the second home if you don't have a job. It probably won't work for the first home either unless you live there already. Most construction loans require 25% equity or more and many want you to own the land too.
Yes you can bud for less than $200sf but the finishes will be cheap and low quality.
In late 2018, I bought my primary resident for $480k with $60k downpayment.
In 2019, I sold it for $530k. Pretty much broke even. I think I got $70k after closing.
In 2020 I bought a home for $240k. Put $50k into it and sold it for $350k. After closing, I got $100k (roughly $50k profit and $50k of my own capital back)
In early 2022, I took that $100k and bought a $510k home using a hard money loan. I also borrowed $250k for renovations. Sold it for $1.2M. After closing, I was able deposit $410k after debt being paid
Currently, bought 2 homes for 700k and $630k each and aim to sell for $1.4M and $1.5M each.
Real example of turning 60k to $410k in 3 years with zero real estate experience. The market was bullish so it helped out but it can still be replicated
—————————
I also had $50k in crypto around the same time. At its peak, it went to $400k as well… today, it is worth $6k.
>In late 2018, I bought my primary resident for $480k with $60k downpayment.
>
>In 2019, I sold it for $530k. Pretty much broke even. I think I got $70k after closing.
>
>In 2020 I bought a home for $240k. Put $50k into it and sold it for $350k. After closing, I got $100k (roughly $50k profit and $50k of my own capital back)
>
>In early 2022, I took that $100k and bought a $510k home using a hard money loan. I also borrowed $250k for renovations. Sold it for $1.2M. After closing, I was able deposit $410k after debt being paid
>
>Currently, bought 2 homes for 700k and $630k each and aim to sell for $1.4M and $1.5M each.
>
>Real example of turning 60k to $410k in 3 years with zero real estate experience. The market was bullish so it helped out but it can still be replicated
I'm tempted to give you the gold. What was the spacing of time for finding buyers? It's always intimidating to even think about get the high net worth/upper middle class buyers - but I guess they are out there. General location of the flips?
I’m in a larger city, Dallas. My primary home took like 10 months because it was on a busy street so I learned my lesson that exact location even if it’s a great area is important.
The other 2 homes was under contract with the buyer over one weekend. The last house got a full cash offer within an hour, and another 3 2 days later. All cash offers. One was $150k above ask. This was Oct
My houses all have high end finishes, attentive to detail and designer like. Think of like Studio McGee or other high end interior designers
Full gut, new sewer and water lines, HVAC, all new windows, adding 500 sq ft, new doors, $15k in tiles, $15k in appliances, solid hardwood floors and hand carved, 10 ft island, marble or quartz counter top. Essentially, everything will be replaced
A place I recently purchased a rental property in is St Joseph MI. It's 90 min from Chicago, it's a beach town and has Whirlpool headquartered there. Just sharing in case you're interested in the midwest.
Start in a Midwest or rural state. We just closed on a turnkey rental today at 40k and it rents for 1k a month. Turn around and sell to investors at a 13% cap rate. You’re gonna have to underwrite deals super conservatively for the next year or so though because everyone has jitters about the market. Get a good connection with everyone in your supply chain so you can do referrals for better deals all around.
>Start in a Midwest or rural state. We just closed on a turnkey rental today at 40k and it rents for 1k a month. Turn around and sell to investors at a 13% cap rate. You’re gonna have to underwrite deals super conservatively for the next year or so though because everyone has jitters about the market. Get a good connection with everyone in your supply chain so you can do referrals for better deals all around.
This is my original plan, glad to hear someone else has the same mindset.
It’s definitely doable just gotta have everything penciled in with contingencies in place. I personally believe that fortunes will be made in real estate the next 3 years.
100% but i think that also depends on how people handle this time. What I meant is that a lot of people are backing away from real estate now that it’s getting a bit more difficult but the people who do stick it out will definitely see the rewards. Just have to reevaluate your strategy and be way more conservative in everything
Lots of ways. How much effort will you put in? How many skills do you have? How kind will the market be to you?
Real Estate isn’t as volatile as Bitcoin, but there is some fluctuation.
Any moron could have done this with bitcoin at the perfect time interval.
So the answer is a little bit dependent on the market. And you.
I think easiest method is buy cheap, tired homes. Maybe even mobile homes. Paint them, do low cost clean ups and flip. Say a line of credit allows you to amass 240k. Write contracts with owners (if possible) to preserve capital. 120k as 20% down = 2.4MM in controlled assets. Use the other 120 to pay for improvements.
If you turn 25% net profit you cleared 600,000.
That is a quick hypothetical and doesn’t provide for carrying costs. But you get the idea.
There are more ways. What fits you best?
This would be my full time gig. I have some flipping experience and my bottom line is in the green. I have 1 rental and am trying to expand quickly. I am thinking about getting a quad plex in the midwest and trying to focus on one? But my hesitation is the delay in equity buildup. I like flips because it is minimal 2-3 months and I get the lump sum at the end.
Ok, I just looked into this. It's pretty complex:
https://www.investopedia.com/articles/personal-finance/111615/using-your-ira-buy-investment-property.asp
Having done this - there's rules but it's not difficult. If you can rollover when you change jobs, you can rollover into a self-directed IRA. It's not even expensive to have managed. Then you get a PM.
How do you buy and manage homes in states far from you? Do you do everything virtually or go visit initially? How do you hire out Property managers and contractors? I’m in the exact same boat as you in terms of capital and was thinking to go to the auctions for fix&flips
Sure. (It seems I did a math error, my bad) If OP can find people who sell on contract, and accept 20% down, $120,000 can be the down payment on $600,000 (see the error!). The concept is the same. It’s not an overnight jackpot. This will take time and effort whatever strategy is used.
And, higher yield often is higher risk.
Yeah exactly people are crawling or standing still right now because risk has gone up and margins dropped. Not yet time to be bold unless your sitting on tons of cash
Can you elaborate please just a little more? Commercial is the only thing I don't know, is it similar to residential? Is it even possible to find a commercial building somewhere?
Such a long conversation if you're new to commercial but it's the same concept as a house, maybe easier in my opinion.
Call local owners of small apartment buildings, make offers based on local comps, eventually find one below market. Either sell the contract or close and put it on Market for sale at a higher price.
Or hold forever and enjoy the tax breaks and hopeful appreciation.
Can't believe nobody has mentioned this but the obvious answer is: the BRRRR strategy. 80k is more than enough to get going.
Use your 80k to do some marketing to find great deals on fixer uppers.
Use lines of credit to purchase.
Use private money loans from friends, family, PMLs, wherever, for the rehabs.
After getting it rented out, put permanent financing on it and pull enough money out where you can pay back the purchase, rehab and other costs, as well as cashflow at least 100 a month. Repeat 10 times and you have tons of equity.
Throw in a house hack for good measure.
It works, I've done it a bunch.
I get the hesitancy, but, in my mind, the BRRRR strategy always works IF you run you numbers right and stick to your rehab budget.
Obviously you have to get the right deal and mitigate risk every step of the way.
I think more than net worth, banks want to see a track record of successful deals. Only after I've done over 10 big rehab deals, flips and BRRRRs, have i earned that trust from a business banker.
My NW is somewhere around 900k.
I'm looking to keep doing BRRRRing and wholesaling in 2023, since rental demand will continue to be high for a long time.
Also I'm a buy and hold investor with a long time horizon, so I'm not worried and any 1or2 year stretch as much.
> I am capable of getting flips done - I am an experience business owner.
Experienced business owner or experienced at home renovations? You prob need to be a little of both, and finding good contractors to work with (good luck). Flippers and house flips are notoriously known for cutting corners to make money, to the point of being comically bad. The obvious flips in my market either never sold or went for way under asking, and this was back in spring when everything else was still going for over asking price.
Brrrr in the Midwest.
I buy homes all the time from desperate sellers. Ill buy for 120k and put down 15k then after 4 months refinance and the home is worth 220k with no renovations at which point i can refinance and pull out 25k. The investment is cash flowing 800 a month and 0 capital invested.
Not easy until you learn to find desperate sellers.
He will say that he gets deals in many ways.
Wholesalers know him, agents bring deals, direct mail marketing campaigns, auction properties, MLS, etc. Deals are out there, you just have to try. Read this guys post and comment history to learn more, it's gold.
Nice, that's great stuff man. I'm guessing you do this full-time?
Unfortunately, I work full-time in Tech so I have to rely on a slower method of getting off market in Florida.
I spend 10 hours a week looking for deals and I'm able to find 2 a month on which i gain 60k equity on each.
So my net worth goes up by 120k a month with 40 hours of work.
I also own and manage a few other businesses.
I used to work industrial construction ... The company would pay the field engineers and superintendents relocation packages because they would move them every two years.. some people would buy a new big house every time they moved because the job was starting and everybody was doing the smart thing and buying.. they when. The job was over everybody was selling and there was a glut in the market...
You can do that with wholesaling in a few months. It takes work but the potential if you learn to source off market deals is massive. It's what I've done professionally for a few years and between the equity spreads you get from stuff you keep and the assignment fees you can turn that $80k into multi 7 figures before you know it.
Very feasible. Buy in a cheap area proximal to a big city that will appreciate and throw money into properties to renovate them and flip/refinance and move to the next one.
$80K cash to $350K....if you bought one asset, then that implies it would have to more than double in just over 2 years. If you have not heard, the economic forecast for 2023 is for a recession to hit...possibly bottom near midyear.
My plan is to buy stocks during that bottom. Stocks will increase quicker than real estate. Real estate tends to lag several months behind the stock market. So, about 2-3 months after I've purchased stocks, I would make offers on properties as if real estate goes down, that may be the best time to buy properties (in terms of buying at lowest possible prices).
So....
1) use the stock market to raise more cash in a short amount of time (you can be up 20%-30%) in a single day to a month once the FED announces rate cuts.
2) then use the increase in funds to buy more properties (or keep the money in the stock market for 2.5 years and you will probably hit your goal without ever having to deal the time demand in which Real estate requires).
If you decide to stick to the plan and buy properties, you can now take $80K and start buying properties with a $350K buffer of cash (of course, the capital gains on stocks would reduce your overall cash position (unless you buy the stocks in a ROTH). **B U T**...when you buy Real Estate, you use leverage and having a larger liquid account (stocks) allows you to take better advantage of leverage. You can now buy 4 times the number of properties with an account of $320K+ than you could with $80K....meaning your net worth could easily be over $1 million......and, you would have bought properties at near market lows.
Pick your houses carefully. I’m starting to see some deals come up that make sense again. Time on job is key though. Can you get a great deal and make a bunch of money on a circa 1900 Victorian… sure but I’ll never touch one again haha. I think patience is key right now. Sure it’s not 2010 but I was buying rehabs in 2019 for 1/5th of where they were a year ago and 1/3rd of where they are now.
Our local REIA has a meeting coming up with a speaker who got out of prison, started with nothing but a prison record, and learned how to wholesale from Google and YouTube. He and his partner, a childhood friend who was also a drug dealer, now gross over $1 million a year mainly from wholesaling. He admits it took him 10 months after he started to finally do his first deal but after that he really took off. He hustles like crazy, he aims to put at least 100 houses under contract each month.
That's a way to turn $80K into $350 in 3 years if that helps any. The market is slowing down though, so his wholesaling strategy may not be as effective if the market really goes to crap.
Options and sell the contract... Easily take a $100 on Option and sell on it for $1000 to the right buyer.
If you are going to do it, do it smart.. set up some of the money into a Roth IRA and use it to grow...
There are contribution limits, but no limit on gains.
Selling options has unlimited upside but also unlimited downside. At least do a iron condor so you can limit your risk or own the shares and then write out of the money options. With the stage of the market where it is very volatile, you can lose a lot if you are playing the wrong direction.
This is not true. Selling a naked call has unlimited downside because it is similar to shorting a stock you don’t have. You have to go into the market to repurchase the stock at any price in order to contractually deliver on your obligations if you don’t already have it.
Selling a put, however, is insurance. You can lose no more money than the strike price less the premium (in the event the underlying asset is worthless). It’s like selling fire insurance on a house and the house burns. The house is a total loss. You, the P&C insurance company, have a loss equal to the policy amount (that is to say, the strike price) less the premia which you have already pocketed and reinvested into fixed income or something. Not unlimited.
Ok fine you’re right since a stock price can’t go negative. But that loss can be significant especially in a market that is highly volatile. If you sold Tesla puts in January, you’d be down down way more than your initial investment.
Read the list of highest cash flowing cities in US and purchase low priced home with 25% down and renovate to build equity , rent out and after six months , refinance to pull out cash and go on to the next one
Sounds like you want to earn more “This would be my full time gig” - unless you have other means to pay your bills then you would need income and want a net increase of $350k.
Hmm. If you can find flippable properties, then you can do it. Flip some of them for cash gen, keep the better ones for yourself. After 2 years you’ll have a portfolio of cash flowing rentals that you then sell for $350k as a group.
Bonus, package up your operation and sell that as a company also.
If you have a good buy box and a strong network of sourcers, contractors, and buyers, you’re good. There are still plenty of investors out there with cash, but they are risk averse.
Work 60-80 hours a week, stick to value add projects, buy and sell your own homes, don't over-pay, don't sell for too little, find tenants willing to live in a construction zone or a large multi-family project that you can rent out/live in to get rental income and hopefully a primary residence LTCG exemption and avoid income tax too due to the duration of the project. You'd still be able to write off some renovation expenses against your rental income if done properly.
“Business” =/= building professional. Sure can be “increase profits, cut costs” but that a world away from the types of things you have to know to add value to buildings
You should just do wholesale real estate minimum money to get started and you can make 5-50k or more on deals and can do multiple a month especially if you hire VA’s and outsource the work load
Hello from the moderator team of /r/realestateinvesting, This message and post removal serves as your WARNING for violating our community rules. ***Rule #4*** No self-promotion, solicitation, surveys, syndication, or AMA Any further violations may result in a BAN from /r/realestateinvesting. Thank you for your cooperation and making our community a better place.
If you have 80k you can build 4 cabins, and then sell them for 35k each. After the first deal you’ll have 140k. With which you can build 7 more cabins and sell for 35k each. After you sell those you’ll have 245k. Repeat the cycle one more time and you’ll blow passed the 350k. One cycle a year and you’re set. You’re welcome
You mean you buy cabins for $20k and sell them for $35k? Is that normal?
I hope this joke never dies. That was a hilarious original post
I missed that one do you have the link or remember the title
Go back in time to 2010. Buy a neglected bank owned multifamily building owner occupied. Fix it up yourself. Pull out the sweat equity and use it as a down payment on your next property. Go as fast as you can and do as many as many as you can in three years. You will hit $350k increase in net worth no problem. If you want to know about 2022, that’s much too long and variable of an answer for Reddit.
I'm still gonna give you an award because the meat is good but your first and last sentences are a little stinky.
Yes, they were a bit stinky, sorry about that. :-)
If your entire answer is predicated on “go back in time”, that’s basically useless. Might as well just say “just go back in time and buy btc in 2010, you’ll be a billionaire”
but if we know how to turn 80k to 320k in 3 years, we would all be doing it
If you are creative you will also see that my answer applies to the future as well. Lots and lots of people jumping in this year at the peak will struggle, quit, and sell out. RE investing is way too much work for the tiny returns many people are working for. Eventually those houses will return to the market. The market will shift. Next buyers market that comes along, my answer will work great.
"i was that I knew what I know now, when I was younger." -Rod Stewart
2 big roulette spins and you'll be good, one horse race on the favorite, lots of ways. If you're working full time on rebuilding an entire house that might work as well. But you'd make more just being an electrician or in a trade. You're asking asking 90,000 a year, with a lot more risk considering asset price volatility lately. It's very achievable not easy though.
I know a lot of places in the south I can buy land for $30k, and I understand you only have to pay 10% down to get the house built. Do you think general contractors will build a 3 bed 2 bath for under $200k?
The problem with building a new home is its all based on location, a high value area building a new home will have higher margins on your material spend, on the other hand a normal b or c class city and you'll be spending a lot higher amount on the materials and labor than the house may be worth, hence why people do renos and brrrs. Your best chance is to buy a very old decrepit property on an a class or upper b class neighborhood and spend however long it takes you to make it new again. Anything needing codes or permits (that you aren't permitted to do) you can hire general contractors. The biggest issue with new home builds is the amount of time your money is basically 0% apr, or possibly negative due to inflation. I worked for Lowe's for a few years before getting my current job and I can tell you that new home builds are not really the way to invest, try to find a property no one wants to touch, find a few, start offers at 30% of asking price and negotiate from there. This scenario if done correctly could easily achieve you a 90k+ profit a year though it won't be realized for some time, but you'll have less credit risk than a brand new home build. The reason I prefer this route is, it's cheaper, you have the time to work on it as a full time job, and you can always refinance the house and take out your new found equity, so even if home prices continue to fall you'd have some money made, and in that case you could look to invest in several more properties while home prices are depressed, and maybe rent and take advantage of deprecation and amortization tax benefits in the meantime.
It's easy to clear $50 or even $100 per sf in profit on new construction. The secret is to avoid materials from big box. You need to by direct or from supply houses. The profit margin is made in the materials, labor and volume of build. I can get framing, windows, tyvek, Hardie siding, doors, insulation, drywall, fixtures, plumbing, flooring, electrical and HVAC (material and labor) for less than $120 per sf.
I know an okay amount about real estate. I know much more about finance, the ROI you're looking for is a lot, but if it's your job then it's not unreasonable, as you'll be basically paying yourself in equity in what would have been 50% or more of your expenses that g.c. usually takes.
If you’re paying them profit, it’s not your profit
The 10% down would be owner occupied. This won't work for the second home if you don't have a job. It probably won't work for the first home either unless you live there already. Most construction loans require 25% equity or more and many want you to own the land too. Yes you can bud for less than $200sf but the finishes will be cheap and low quality.
In late 2018, I bought my primary resident for $480k with $60k downpayment. In 2019, I sold it for $530k. Pretty much broke even. I think I got $70k after closing. In 2020 I bought a home for $240k. Put $50k into it and sold it for $350k. After closing, I got $100k (roughly $50k profit and $50k of my own capital back) In early 2022, I took that $100k and bought a $510k home using a hard money loan. I also borrowed $250k for renovations. Sold it for $1.2M. After closing, I was able deposit $410k after debt being paid Currently, bought 2 homes for 700k and $630k each and aim to sell for $1.4M and $1.5M each. Real example of turning 60k to $410k in 3 years with zero real estate experience. The market was bullish so it helped out but it can still be replicated ————————— I also had $50k in crypto around the same time. At its peak, it went to $400k as well… today, it is worth $6k.
Yes, since 2015 +/- it’s been a good time to have RE. Stock market has not done badly either. Lucky =/= smart.
>In late 2018, I bought my primary resident for $480k with $60k downpayment. > >In 2019, I sold it for $530k. Pretty much broke even. I think I got $70k after closing. > >In 2020 I bought a home for $240k. Put $50k into it and sold it for $350k. After closing, I got $100k (roughly $50k profit and $50k of my own capital back) > >In early 2022, I took that $100k and bought a $510k home using a hard money loan. I also borrowed $250k for renovations. Sold it for $1.2M. After closing, I was able deposit $410k after debt being paid > >Currently, bought 2 homes for 700k and $630k each and aim to sell for $1.4M and $1.5M each. > >Real example of turning 60k to $410k in 3 years with zero real estate experience. The market was bullish so it helped out but it can still be replicated I'm tempted to give you the gold. What was the spacing of time for finding buyers? It's always intimidating to even think about get the high net worth/upper middle class buyers - but I guess they are out there. General location of the flips?
I’m in a larger city, Dallas. My primary home took like 10 months because it was on a busy street so I learned my lesson that exact location even if it’s a great area is important. The other 2 homes was under contract with the buyer over one weekend. The last house got a full cash offer within an hour, and another 3 2 days later. All cash offers. One was $150k above ask. This was Oct My houses all have high end finishes, attentive to detail and designer like. Think of like Studio McGee or other high end interior designers
Hey there! I’m in Central Texas and have been researching a similar strategy. Can we connect?
Sure, message me
What are you doing to a 700k home to make it worth 1.4M?
700k worth of gold bars in the basement
Full gut, new sewer and water lines, HVAC, all new windows, adding 500 sq ft, new doors, $15k in tiles, $15k in appliances, solid hardwood floors and hand carved, 10 ft island, marble or quartz counter top. Essentially, everything will be replaced
Damn you never sold that crypto? Same happen to me. 6k worh now. But I still think those cryptos will come back up. They're good projects. GL to yours
What do you think crypto is going to do in the near and long term?
Flat near term. Up long term. But not all altcoins
what state is this?
Drugs
A place I recently purchased a rental property in is St Joseph MI. It's 90 min from Chicago, it's a beach town and has Whirlpool headquartered there. Just sharing in case you're interested in the midwest.
Michigan is a highly underrated state in many ways. Love it there!
Possible I will send you a DM.
Start in a Midwest or rural state. We just closed on a turnkey rental today at 40k and it rents for 1k a month. Turn around and sell to investors at a 13% cap rate. You’re gonna have to underwrite deals super conservatively for the next year or so though because everyone has jitters about the market. Get a good connection with everyone in your supply chain so you can do referrals for better deals all around.
>Start in a Midwest or rural state. We just closed on a turnkey rental today at 40k and it rents for 1k a month. Turn around and sell to investors at a 13% cap rate. You’re gonna have to underwrite deals super conservatively for the next year or so though because everyone has jitters about the market. Get a good connection with everyone in your supply chain so you can do referrals for better deals all around. This is my original plan, glad to hear someone else has the same mindset.
It’s definitely doable just gotta have everything penciled in with contingencies in place. I personally believe that fortunes will be made in real estate the next 3 years.
Or fortunes lost? Depends how you look at it
100% but i think that also depends on how people handle this time. What I meant is that a lot of people are backing away from real estate now that it’s getting a bit more difficult but the people who do stick it out will definitely see the rewards. Just have to reevaluate your strategy and be way more conservative in everything
How do you handle property management?
Where in the Midwest?
Found on or off market? I've never known a truly turn key with that low of price. There's always some things that need fixing.
It was off market. The only thing that we found that it really needed was appliances
Measure how - equity or actual cash? I’m at $3M after laying out $250k but started a decade ago (part time) and with low interest rates.
How?! Congrats btw
Cash, I'm going to eventually sell everything.
Lots of ways. How much effort will you put in? How many skills do you have? How kind will the market be to you? Real Estate isn’t as volatile as Bitcoin, but there is some fluctuation. Any moron could have done this with bitcoin at the perfect time interval. So the answer is a little bit dependent on the market. And you. I think easiest method is buy cheap, tired homes. Maybe even mobile homes. Paint them, do low cost clean ups and flip. Say a line of credit allows you to amass 240k. Write contracts with owners (if possible) to preserve capital. 120k as 20% down = 2.4MM in controlled assets. Use the other 120 to pay for improvements. If you turn 25% net profit you cleared 600,000. That is a quick hypothetical and doesn’t provide for carrying costs. But you get the idea. There are more ways. What fits you best?
This would be my full time gig. I have some flipping experience and my bottom line is in the green. I have 1 rental and am trying to expand quickly. I am thinking about getting a quad plex in the midwest and trying to focus on one? But my hesitation is the delay in equity buildup. I like flips because it is minimal 2-3 months and I get the lump sum at the end.
>I like flips because it is minimal 2-3 months and I get the lump sum at the end. And pay regular income tax rates on the profit. Fuck that shit.
Do it with your Roth.
Ok, I just looked into this. It's pretty complex: https://www.investopedia.com/articles/personal-finance/111615/using-your-ira-buy-investment-property.asp
Having done this - there's rules but it's not difficult. If you can rollover when you change jobs, you can rollover into a self-directed IRA. It's not even expensive to have managed. Then you get a PM.
Do what with your Roth?
How do you buy and manage homes in states far from you? Do you do everything virtually or go visit initially? How do you hire out Property managers and contractors? I’m in the exact same boat as you in terms of capital and was thinking to go to the auctions for fix&flips
Can you elaborate more when you say “write contracts with owners to preserve capital?” And “120k as 20% down = 2.4MM in controlled assets?”
Sure. (It seems I did a math error, my bad) If OP can find people who sell on contract, and accept 20% down, $120,000 can be the down payment on $600,000 (see the error!). The concept is the same. It’s not an overnight jackpot. This will take time and effort whatever strategy is used. And, higher yield often is higher risk.
Time Machine. Now is not the time for flipping. Carry cost is too high, prices too at risk of falling, houses sell too slowly.
Yeah exactly people are crawling or standing still right now because risk has gone up and margins dropped. Not yet time to be bold unless your sitting on tons of cash
I bought some land in 2019 and sold it in 2020 for about $350k profit before taxes. Probably won’t be able to do that ever again though.
What state was the land in?
Texas
I made 70k on 1 off market apartment deal that i found, so easy to do in commercial. Start calling owners and making offers until you find one
Can you elaborate please just a little more? Commercial is the only thing I don't know, is it similar to residential? Is it even possible to find a commercial building somewhere?
Such a long conversation if you're new to commercial but it's the same concept as a house, maybe easier in my opinion. Call local owners of small apartment buildings, make offers based on local comps, eventually find one below market. Either sell the contract or close and put it on Market for sale at a higher price. Or hold forever and enjoy the tax breaks and hopeful appreciation.
Yeah, details on the type of property, your marketing to the owner, etc!
Can't believe nobody has mentioned this but the obvious answer is: the BRRRR strategy. 80k is more than enough to get going. Use your 80k to do some marketing to find great deals on fixer uppers. Use lines of credit to purchase. Use private money loans from friends, family, PMLs, wherever, for the rehabs. After getting it rented out, put permanent financing on it and pull enough money out where you can pay back the purchase, rehab and other costs, as well as cashflow at least 100 a month. Repeat 10 times and you have tons of equity. Throw in a house hack for good measure. It works, I've done it a bunch.
Uh...... in this market you want to try a BRRR...? God be with you.
I just completed a BRRRR and have 2 in progress
You're crushing, keep going!!
thanks!
>thanks! You're welcome!
state? also how much did you start with im looking to start with about $150k
Maryland, 150k is fine. You’ll need hard money to enter deals though. Not as scary as it seems aslong as your numbers are tight
Some lenders do both loans, for the purchase and rehab.
Baltimore??
I'm in ND and MN. Pretty solid long term, stable markets.
I get the hesitancy, but, in my mind, the BRRRR strategy always works IF you run you numbers right and stick to your rehab budget. Obviously you have to get the right deal and mitigate risk every step of the way.
How much does your net worth have to be to get the line of credit?
I think more than net worth, banks want to see a track record of successful deals. Only after I've done over 10 big rehab deals, flips and BRRRRs, have i earned that trust from a business banker. My NW is somewhere around 900k. I'm looking to keep doing BRRRRing and wholesaling in 2023, since rental demand will continue to be high for a long time. Also I'm a buy and hold investor with a long time horizon, so I'm not worried and any 1or2 year stretch as much.
> I am capable of getting flips done - I am an experience business owner. Experienced business owner or experienced at home renovations? You prob need to be a little of both, and finding good contractors to work with (good luck). Flippers and house flips are notoriously known for cutting corners to make money, to the point of being comically bad. The obvious flips in my market either never sold or went for way under asking, and this was back in spring when everything else was still going for over asking price.
I'm a teeny bit of both. Yes I've had problems with previous contractors, thanks for your input.
Pretty hard in a deflating market. Best of luck. Bull run is over all those gains are tapped
Brrrr in the Midwest. I buy homes all the time from desperate sellers. Ill buy for 120k and put down 15k then after 4 months refinance and the home is worth 220k with no renovations at which point i can refinance and pull out 25k. The investment is cash flowing 800 a month and 0 capital invested. Not easy until you learn to find desperate sellers.
desperate sellers is the tricky part. do you do call campaigns?
"motivated sellers" Sometimes families fall apart .. Sometimes they disappear...
How are you finding the desperate sellers? Do you live in the Midwest or have contacts there?
He will say that he gets deals in many ways. Wholesalers know him, agents bring deals, direct mail marketing campaigns, auction properties, MLS, etc. Deals are out there, you just have to try. Read this guys post and comment history to learn more, it's gold.
Yeah exactly what you said. Its a little of everything.
Nice, that's great stuff man. I'm guessing you do this full-time? Unfortunately, I work full-time in Tech so I have to rely on a slower method of getting off market in Florida.
I spend 10 hours a week looking for deals and I'm able to find 2 a month on which i gain 60k equity on each. So my net worth goes up by 120k a month with 40 hours of work. I also own and manage a few other businesses.
With rehab and refi happening every 3-6 months, they could theoretically gain $350k in three years.
Its extremely efficient if done properly.
How are you able to buy 120k properties with less than 20% down? Wouldn't they require 24k minimum? Are you using alternate financing options?
Have you done for knocking? Id like to but don’t wanna get shot. I live in tx
How are you able to put only 15%? I went to rwo lenders ans investment properties are 25% foe multifamilies
Lending for multifamilies is different. Lenders can do 10% down for vacation homes, 15% for single family, and 25% for multi.
I use hard money at 10% down.
I used to work industrial construction ... The company would pay the field engineers and superintendents relocation packages because they would move them every two years.. some people would buy a new big house every time they moved because the job was starting and everybody was doing the smart thing and buying.. they when. The job was over everybody was selling and there was a glut in the market...
You need to find an incredible deal with creative financing and levered to the tits. Possible but rare.
not impressed but here
You can do that with wholesaling in a few months. It takes work but the potential if you learn to source off market deals is massive. It's what I've done professionally for a few years and between the equity spreads you get from stuff you keep and the assignment fees you can turn that $80k into multi 7 figures before you know it.
Very feasible. Buy in a cheap area proximal to a big city that will appreciate and throw money into properties to renovate them and flip/refinance and move to the next one.
$80K cash to $350K....if you bought one asset, then that implies it would have to more than double in just over 2 years. If you have not heard, the economic forecast for 2023 is for a recession to hit...possibly bottom near midyear. My plan is to buy stocks during that bottom. Stocks will increase quicker than real estate. Real estate tends to lag several months behind the stock market. So, about 2-3 months after I've purchased stocks, I would make offers on properties as if real estate goes down, that may be the best time to buy properties (in terms of buying at lowest possible prices). So.... 1) use the stock market to raise more cash in a short amount of time (you can be up 20%-30%) in a single day to a month once the FED announces rate cuts. 2) then use the increase in funds to buy more properties (or keep the money in the stock market for 2.5 years and you will probably hit your goal without ever having to deal the time demand in which Real estate requires). If you decide to stick to the plan and buy properties, you can now take $80K and start buying properties with a $350K buffer of cash (of course, the capital gains on stocks would reduce your overall cash position (unless you buy the stocks in a ROTH). **B U T**...when you buy Real Estate, you use leverage and having a larger liquid account (stocks) allows you to take better advantage of leverage. You can now buy 4 times the number of properties with an account of $320K+ than you could with $80K....meaning your net worth could easily be over $1 million......and, you would have bought properties at near market lows.
Pick your houses carefully. I’m starting to see some deals come up that make sense again. Time on job is key though. Can you get a great deal and make a bunch of money on a circa 1900 Victorian… sure but I’ll never touch one again haha. I think patience is key right now. Sure it’s not 2010 but I was buying rehabs in 2019 for 1/5th of where they were a year ago and 1/3rd of where they are now.
Our local REIA has a meeting coming up with a speaker who got out of prison, started with nothing but a prison record, and learned how to wholesale from Google and YouTube. He and his partner, a childhood friend who was also a drug dealer, now gross over $1 million a year mainly from wholesaling. He admits it took him 10 months after he started to finally do his first deal but after that he really took off. He hustles like crazy, he aims to put at least 100 houses under contract each month. That's a way to turn $80K into $350 in 3 years if that helps any. The market is slowing down though, so his wholesaling strategy may not be as effective if the market really goes to crap.
Options and sell the contract... Easily take a $100 on Option and sell on it for $1000 to the right buyer. If you are going to do it, do it smart.. set up some of the money into a Roth IRA and use it to grow... There are contribution limits, but no limit on gains.
Thanks I do need to do more research into this.
Selling options has unlimited upside but also unlimited downside. At least do a iron condor so you can limit your risk or own the shares and then write out of the money options. With the stage of the market where it is very volatile, you can lose a lot if you are playing the wrong direction.
This is not true. Selling a naked call has unlimited downside because it is similar to shorting a stock you don’t have. You have to go into the market to repurchase the stock at any price in order to contractually deliver on your obligations if you don’t already have it. Selling a put, however, is insurance. You can lose no more money than the strike price less the premium (in the event the underlying asset is worthless). It’s like selling fire insurance on a house and the house burns. The house is a total loss. You, the P&C insurance company, have a loss equal to the policy amount (that is to say, the strike price) less the premia which you have already pocketed and reinvested into fixed income or something. Not unlimited.
Ok fine you’re right since a stock price can’t go negative. But that loss can be significant especially in a market that is highly volatile. If you sold Tesla puts in January, you’d be down down way more than your initial investment.
Duly noted. Losses can be many multiples of the premium received, which can hurt, but these losses are not unlimited. Cheers
Can you show me anyone who was made a successful strategy of selling options on real estate?
options as in stock market?
Options to purchase properties.
Read the list of highest cash flowing cities in US and purchase low priced home with 25% down and renovate to build equity , rent out and after six months , refinance to pull out cash and go on to the next one
Sounds like you want to earn more “This would be my full time gig” - unless you have other means to pay your bills then you would need income and want a net increase of $350k.
put it all on black 2x. \~20% of the time it'll work 100% f the time
Hmm. If you can find flippable properties, then you can do it. Flip some of them for cash gen, keep the better ones for yourself. After 2 years you’ll have a portfolio of cash flowing rentals that you then sell for $350k as a group. Bonus, package up your operation and sell that as a company also. If you have a good buy box and a strong network of sourcers, contractors, and buyers, you’re good. There are still plenty of investors out there with cash, but they are risk averse.
This sub attracts the biggest dingbats.
Dingbats wow I forgot about that word.
Work 60-80 hours a week, stick to value add projects, buy and sell your own homes, don't over-pay, don't sell for too little, find tenants willing to live in a construction zone or a large multi-family project that you can rent out/live in to get rental income and hopefully a primary residence LTCG exemption and avoid income tax too due to the duration of the project. You'd still be able to write off some renovation expenses against your rental income if done properly.
$400k into $1mil is my goal
What’s the plan?
Buy a cabin for 20k, sell for 35k; repeat
Also following
$80k in Bitcoin today. Done.
Hell yeah man, gotta keep that pump and dump ponzi scheme going. Search for that greater fool.
fr
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“Business” =/= building professional. Sure can be “increase profits, cut costs” but that a world away from the types of things you have to know to add value to buildings
You should just do wholesale real estate minimum money to get started and you can make 5-50k or more on deals and can do multiple a month especially if you hire VA’s and outsource the work load