Investing in Real Estate???

[Redhotman]

I am 18 and live with my parents. I am on pace to make about 40K/yr after taxes. I am interested in investing in real estate. I hear that interest rates are at an all time low. My goal would be to buy a house hear in Florida, and then rent it out paying off the mortgage and watching the property soar. I figure you could get some good deals, fixer upers and that sort and really make some money as another hobby. If you keep reinvesting you can become a real estate mongal before you blink your eyes.
Any good books or sites out there to look at for information of this sort out there?

[HDPM]

There are a lot of resources out there. I have been reading some as we are just beginning to invest in real estate. Since I am just a newbie too, I can't give you much advice. My idea is to start slow and buy rentals off of people who want out. I want positive cash flow from the first day. That is my entrance strategy. From there I intend to see how I like investing in it. We'll see. My only advice is to be liability concious. We will probably transfer the properties to an LLC and will carry plenty of liability insurance. Also find out who the best home inspector around your area is. We use a guy who is too picky and can scare you too much. But he has found safety issues or things that might require huge amounts to fix. He has killed a deal we had an offer on, but that's OK. He also costs some money, but that's OK too. I don't have the right experience to inspect a house, but can buy that experience pretty cheaply by hiring him. We should be closing our first little deal soon. The seller told me he wants to sell me some more of his stuff. He wants to sell his smaller rentals and consolidate some. Already people are telling us about possible deals. I think if you get in the game, it kind of builds. Anyway, I have no real experience in it, and have asked here before. Most of the responses were positive. Give it a shot. Buy and read several books and get an idea of some strategies and basics. GL.

Oh, and look at a lot of stuff. You need to look at houses to get an idea of what is there. That doesn't always mean going to them, but sometimes it does. Some you can just call on and figure out that it won't work. Others you call and go look at the property but don't go inside it. Others you look at carefully. On a few you'll make offers. On a smaller few you'll make deals.

[adios]

You can invest in real estate without buying whole properties outright. REITs offer a way to do this and there are others as well. We discuss REITs on the stock market forum which is really a discussion about different asset classes in general. Ray's shared some of his experiences there regarding investing in real estate. There are also are two different broad categories of real estate available, commercial and residential as well as sub categories within those. My take on Florida and I suppose it's like anywhere else, it's highly dependent on location regarding residential real estate as to investment potential. I'm sure many will disagree but in general I think commercial real estate may offer better investment potential but is much more risky.

[bad beetz]

Just be careful. Very careful.

You can lose all your money before you blink your eyes as well.

Reading a book on real estate investing does not mean you understand the market in a particular area of Florida, or financing, or the laws governing real estate ownership, tenancy, etc.

You can get in deep [censored] real quick. I'm guessing you read a book or something. I see allot of newbie real-estate investors get pinched.

Buy your own house and build equity in that before you buy an investment property. You'll at least get a feel for the process.

Take some real estate classes at a JC (NOT FREAKING SEMINARS) never take a real estate seminar. They are selling you something. They get you pumped up with ridiculous numbers and get you to sign into a deal using their mortgage brokers or their new subdivision or their new video tapes on real estate investing, etc.

Get your license. I wish I had my license when I was 18.

[TobDog]

You might want to talk to some real estate agents in your area about the market. Where I live there are quite a few vultures(guys/companies with a lot of cash that buy REO's, paint, carpet, sell) The most sucessful ones here have cash to not worry about payments or renters, renting is another thing too, you will need to keep up your property for your tennants. Being handy wil help you in this as well, if not, you will be hiring help to do repairs. While you can make a lot of money in real estate, it is a large financial obligation to do as well, I have make over 100K in less than 3 years on my personally owned properties, but I still need a place to live right? I do wish I had some extra cash in the early 90's here to buy some homes that were distressed that are now worth over 500k, but if you get in at bad times, you will have to ride out the wave near the bottom, might want to check out David's essay "The fundamental theorem of investing" that he wrote a little while back. While I personally believe that property will rise in value over time, I know many people who bought homes way over their proce range in the OC in the 80's because they could not make 20-40% ROI each year in the bank with the money, the market cannot appreciate at that rate forever, it will have bad times. Not to try to discourage you, just make sure you diversify.

tobdog