[kdolo]

(01-03-2012 02:17 PM)TudoBem Wrote:  

(08-29-2011 10:49 PM)BostonBMW Wrote:  

So I am on the daily hustle, eyes on the prize: to make enough money to not have to work.

My field is real estate. Recently I have been scouring the listings and trying to do analyses to make the numbers work, Boston like the rest of the metropolitan Bos-Wash corridor is horrendous when it comes to positive cash flow...its like squeezing blood from a turnip.

The only possibilities I am seeing is some of the industrial/old mill cities of New England, they aren't ghetto per se, however definitely on the rough side. I am torn between:

Option A:

Buying a solid, well located property that barely breaks even, although may have some appreciation potential (if the US isn't bankrupted and the world doesn't end).

Option B:

Buying a cash cow that will give me some regular income, but forget about being able to enjoy any appreciation?

Option C:

Say F it and move out to the Midwest or the Rockies and start piling on investments out there. I am not looking for the big city excitement if it means putting my goals on hold. I figure if I am making like US 5K/month in net income, I can pretty much pull a Roosh.

I am making decent money out here, but I am not sleeping easy because 1. The economy goes to hell and I'm out of a job 2. I need to be locking down RE deals and I am not seeing the value opps.

Thoughts?

How are your Spanish language skills? How comfortable are you dealing with opaque legal and regulatory environments where unofficial payments are commonplace?

If you can handle it, I would say invest in Veneuela, that is where a huge profit stands to be made.

You will have to be creative in terms of how you make your purchase. The black market for dollars is huge, and if you purchase a property based on the official rate for the Bolivar, you will be screwed. Figure out how to get your coveted American dollars to whoever is selling.

Don't listen to the endless crap about Brazil and the world cup and the olympics. This is a bandwagon, and all of the low hanging fruit in terms of pricing opportunities has passed. THE time to invest in Brazil was in 2002 right before Lula's election, when investor hysteria created capital flight and sent the real up to 4/$.

Chavez will be dead soon. The heavy oil tar in the Orinoco area will provide hundreds of billions to the Venezuelan economy in the coming decades.

There will not be another Chavez, and the various factions of Venezuelan society will reach some sort of arrangment, which no matter how bad it is, will be much better for stability and growth than anything in the past.

Everyone is so scared about what they read in the papers regarding violence and property confiscation, that it is a perfect time.

Fortunes are made when there is blood in the streets.

nah. No rule of law.

[LowerCaseG]

I am in the Boston Real Estate game. My advice would be that if you are going to buy an investment property, Buy it being prepared for everything to go wrong. If you can not withstand a period of major bad luck, you should not be buying it. The landlord business is a hands on business, I would not recommend being an absentee landlord.

Of course, the more ghetto the neighborhood, they higher your potential monthly cash flow will be. Ask yourself if the extra couple of hundred of dollars a month is worth chasing welfare moms around for money. In my experience, it is not.

i can't find exactly how much money you are looking to put down, but if you are going to buy a triple decker, you will have to put at least 20% down. Thats 40k on a 200k purchase with more cash to renovate and have a security a net.

Frankly I think you are better off buying a single family in the burbs near a commuter rail stop thats a good deal, and renting out a room. You will likely be able to purchase with 5% down as an owner occupant. If you dont want to share your living space then make an illegal apartment in the basement and rent it for 8 or 900 a month. Its a lot more stable. Once you get the hang of it, take the next step. In 10 years you will have 3-5 properties with no mortgages.

The people I see making money on RE are the ones able to make cash purchases and not rely on the bank. I realize you are not in that position now, but that is what you should be building to.

[BostonBMW]

(02-02-2012 02:40 PM)LowerCaseG Wrote:  

I am in the Boston Real Estate game. My advice would be that if you are going to buy an investment property, Buy it being prepared for everything to go wrong. If you can not withstand a period of major bad luck, you should not be buying it. The landlord business is a hands on business, I would not recommend being an absentee landlord.

Of course, the more ghetto the neighborhood, they higher your potential monthly cash flow will be. Ask yourself if the extra couple of hundred of dollars a month is worth chasing welfare moms around for money. In my experience, it is not.

i can't find exactly how much money you are looking to put down, but if you are going to buy a triple decker, you will have to put at least 20% down. Thats 40k on a 200k purchase with more cash to renovate and have a security a net.

Frankly I think you are better off buying a single family in the burbs near a commuter rail stop thats a good deal, and renting out a room. You will likely be able to purchase with 5% down as an owner occupant. If you dont want to share your living space then make an illegal apartment in the basement and rent it for 8 or 900 a month. Its a lot more stable. Once you get the hang of it, take the next step. In 10 years you will have 3-5 properties with no mortgages.

The people I see making money on RE are the ones able to make cash purchases and not rely on the bank. I realize you are not in that position now, but that is what you should be building to.

Good info. Since you're BOSSTown, what do you think about the inner suburbs?

I liked the triple-deckas for the reduced risk (if 1 tenant is not paying rent, I still have 2 other units rented). Also my issue is that:

- I don't necessarily live in the units, maybe keep a room for myself or my visitors. I live in the City and I like my commute to work and the nightlife options.
- Prices are NOT coming down in the good spots like Cambridge, Wellesley etc. where I can get some solid tenants.
- Eventually I want to be location independent with New England as my home base, so cashflow is pretty important for getting to that point.

You're absolutely right about all cash offers, which is why I mentioned the Midwest and the Rockies where you can get houses for less than 100K.

[LowerCaseG]

send me a Pm and we can talk details, and ill try and answer all of your questions.

[BostonBMW]

^

PM sent.

Any advice would be appreciated.

[reaper23]

So much to comment on this thread, I'll just start with some basics.

Buy and hold residential without significant improvements is hard to do at a good current yield right off the bat. You make all your money on the purchase which means you have to find distressed sales.

Dealing with distressed sales means widows, foreclosures, crazy people, and fucked up situations. You have to get involved. You have to get their trust. Then you can get them to sell you the house without any money down. That is a a topic for another post. The unmortgaged distressed sale is the holy grail. Then you talk some poor old woman into selling you her house by taking back the a seller financed 100% mortgage. Sound hard? It is.

Value add is where people "make money." But again that is done by buying well. You will have trouble doing that purchasing through MLS or other normal channels. 99% of real estate agents have no fucking clue. You gotta get with the network of dudes who buy tax liens, sniff out preforeclosures and the like.

And in this case think 1/3 1/3 1/3. as in buy for 100k put in 100k sell for 300k. this will take exceptional understanding of current market rates for new product plus superior cost estimation skills.

any contractor worth a shit is either 1) doing this already or 2) going to extract the profit from the deal in his price to you.

being your own GC is the only way to really make this happen unless you're doing mad volume.

small commercial:

now i've done probably 20 of the deals listed above but the best in my mind is small-medium sized commercial (for the indy player) or 3000-10000 sqft.

What i did was buy total shithole commercial buildings, have some plans drawn up with fancy pictures and then lease the spaces before i did any construction work at all. this mitigates your risk, lowers carrying costs and the like.

this is the only time you can count on appreciation to increase value because your leases should have escalators annually.

otherwise, just like with residential you count on current yield and amortization.

Amortization is the real winner in all of this. A real estate deal that breaks even on a current yield still offers two great benefits:

1) depreciation on your taxes (reduction in your highest marginal tax rates)

and

2) amortization of your debt

if you can get someone to pay down the debt on the building all the while helping you to save money on taxes - you're golden (long term). add in a health positive cash flow right off the bat and you have yourself a real deal.



residential rehab and small time rental work is hellish. you have unsavory characters all around from the sellers, builders, and renters.

commercial work generally keeps things more professional and you can pass on expenses like real estate taxes, insurance and maintenance.

this is my career so if you got any direct questions let me know