[Nigami Enterprise]

Im 22 and recently bought my first house. Basically I just believe you have to get in as soon as you can cause housing is only going to go up and you always will need one. I have my mortage as an offset account so basically its just a saving account to me. I can take out and put in when ever i want.

[silversurfer]

Originally Posted by Young Spark

That's why you should always propose something of an "real estate investment" club. This'll allow people to invest money into the "club" and in return get maybe 5% of their money back within' a set period of time. just figure out ways... and who says it has to be YOUR money

I looked at this and had some interest prior to the real estate crash. I figured 5 people with $5k upfront would give us enough money to transform some slum property, but after the prices stalled, everyone dropped out.

I agree that a real estate investment club is a great idea.

[Young Spark]

^^ Yeah, it interested me as well. Just thinking of it in the perspective you put it makes it seem like a rewarding idea.

For example: 10 people invest in $10k ($100k) --- you buy a rehab project for $60k and use $40k for fixing it up. If you could sell it for $195k ... let's say your giving 10% R.O.I. to each member that invested their $10k.

Here are the results: You sell the home for $195k ... you pay $110k out to everyone who invested (their original $10k plus the 10% R.O.I. which is $1,000 per person.) That leaves you with $85,000 to put towards your next project.

What can I say its a creative way of building major wealth.

[silversurfer]

Originally Posted by Young Spark

^^ Yeah, it interested me as well. Just thinking of it in the perspective you put it makes it seem like a rewarding idea.

For example: 10 people invest in $10k ($100k) --- you buy a rehab project for $60k and use $40k for fixing it up. If you could sell it for $195k ... let's say your giving 10% R.O.I. to each member that invested their $10k.

Here are the results: You sell the home for $195k ... you pay $110k out to everyone who invested (their original $10k plus the 10% R.O.I. which is $1,000 per person.) That leaves you with $85,000 to put towards your next project.

What can I say its a creative way of building major wealth.

it's the same plan one of the infomercial guys had.

what you left out is the loan. The loan will get you there faster which is why I was looking at 5 people at $5k. I don't have $10k to put into a property, but I have $5k. Plus I think you're underestimating rehab costs, friends I knew were spending $80-120k. my parents' neighbors spent $350k on their rehab.

Baltimore is a great market for entry because of all the houses under $100k.

However, my thing was always a split percentage. Promising people 10% means you'd have to cover the 10% if it wasn't reached. I had friends who had to sell their rehab and they made something like $15k on a $500k sale. That was their reality- they wanted $600k but the market stalled and they just had to sell rather than pay 12 more months of double mortgage. I would avoid a Ponzi scheme and stick to a straight partnership, but that's just me.

[Young Spark]

^^ Technically true but I don't believe I'm underestimating a rehab project... we're wanting to rehab a site, not build up an entire new home. I know contractors who do siding for under $2,000 --- drywallers who can do drywall for $4,000-$7,000 --- pay some neighborhood kids to paint the walls is a good way of saving money. But some may think this is breaking child labor laws when it really isn't. Kids in 7th-8th grades want some money to so why not have them help out on painting the walls, etc for a little money.

But then yes you have landscaping, fixture replacements, window treatments, and floor replacing but all can be done under $40k budget if planned right here in Baltimore.

Sorry, for listing all I did, I watch alot of HGTV << good stuff

[silversurfer]

Originally Posted by Young Spark

^^ Technically true but I don't believe I'm underestimating a rehab project... we're wanting to rehab a site, not build up an entire new home. I know contractors who do siding for under $2,000 --- drywallers who can do drywall for $4,000-$7,000 --- pay some neighborhood kids to paint the walls is a good way of saving money. But some may think this is breaking child labor laws when it really isn't. Kids in 7th-8th grades want some money to so why not have them help out on painting the walls, etc for a little money.

But then yes you have landscaping, fixture replacements, window treatments, and floor replacing but all can be done under $40k budget if planned right here in Baltimore.

Sorry, for listing all I did, I watch alot of HGTV << good stuff

you know people who would do siding on an entire house, to code, for $2000?

In Columbia, MD I had relatives who had quotes in the $15-20,000 range. Columbia. Either you're talking about a very small rowhouse (front and back, no sides) or you aren't talking to code. I know rehabbers out of the Bowie REIC and they're definitely spending $100k to rehab Baltimore free standing houses because of the wrecked kitchens. I know I heard about deals like $50k in back taxes at auction, $100k in work, $200k sales.

When rehabbing involved a new kitchen, which is not rebuilding an entire house but is usually the most common place to start in rehabbing, the cost starts at $50k. I know that from the Bowie folks and because my in-laws priced out work in Philadelphia that was in the $45-65k range and were forced to wait until a cousin could do about half the work they wanted with almost no labor charge and that cost them $15k and that was just a simple rewiring, repiping, refacing cabinets, retiling, lead paint removal and repainting and all new appliances- standard work for buying a house that was trashed.

Now, the $350k rehab involved a big house, new wood floors, new roof, wiping out the old kitchen and a wall, adding a deck and finishing the basement. But that was Montgomery County, MD. Not terribly far from you, so the labor pool wouldn't be, you know, that different.

I was very interested in flipping houses, so I did a lot of research on this and worked with the club out in Bowie before deciding it wasn't for me in the current market. Friends, as I said, bought too high because they HAD to do it in 2003 and made $15k for a year's work which sort of sucked.

here's a list of Maryland REICs:
http://www.regionrealestateresource....x.cfm?ID=96521

[radreality]

how did we get from home ownership to real estate investing? But thats good though, because I'll take a moment to reiterate what I said before. If you want to do real estate investing using your personal credit to get the loans (don't think lenders will let you use business credit, because that will be even harder than buying one personally), then you most likely won't be able to have a mortgage on a house for yourself at the same time. It doesn't matter how good of credit you have. It comes down to your income. You have to have a really high income for lenders to allow you carry mortgages on more than one property at the same time.

Which brings us back to earlier on in the thread. Its easy to say owning your own home is a good thing. For most people it is. But if you want to do investing using your personal credit, you need to look more into it to see if you are able to do both at the same time.

______________________________
Robert Falk
Business Developer / Investor
Self Help & Success Forum

[xcbellx]

here's my situation.. I earn $60k a year on my W2. I own 1.5 rental properties and my owner occupied house. I bought my first house when I was 23 and am now 27.

Buying my first condo was the smartest thing i've ever done.

The greatest benefit to me is the "tax write offs" associated with homeownership. When I go to do my taxes for the year 2007 I will have $102,500 in "write-offs" so according to the IRS I'm not making any money!!

Which means I will get back all the money they took out of my paychecks.. roughly $15k So in simple terms I own real estate so I don't have to pay taxes!

[Young Spark]

Originally Posted by radreality

Which brings us back to earlier on in the thread. Its easy to say owning your own home is a good thing. For most people it is. But if you want to do investing using your personal credit, you need to look more into it to see if you are able to do both at the same time.

Surely, we are talking about owning a home. Investing in a home is a form of home ownership if you think from an odd angle about it.

Originally Posted by radreality

You have to have a really high income for lenders to allow you carry mortgages on more than one property at the same time.

Another concept I realize is that this statement in a sense is untrue (I am assuming.) This weigh's on your response in the "buy real estate with no money down." Simply, does buying with no money down mean exactly that you will be involved with lenders still. Hearing someone say "with no money down" usually triggers the natural thought of "no lender needed" in my mind. I may be estimating this concept wrong so I apologize if I am.

you know people who would do siding on an entire house, to code, for $2000?

Excuse me, I meant $12,000 --- and yes, I've spoke to a company that is willing to do the siding job here in the Baltimore area (along with my help and assistance, I don't just put all the job specifics on one company. I usually like to help out as well.)

I've checked out a few places in Hartford County, MD but really couldn't decide if it would be homes worth putting money into since the fact stands that they had major improvements but the improvements aren't good based on a walk through with a real estate expert who notes what home buyers want.

But that was Montgomery County, MD. Not terribly far from you, so the labor pool wouldn't be, you know, that different.

What a coincidence, yes, Montgomery County isn't that far away from me... haven't checked the real estate market around that area though.

In total: My response is that I could still contract and rehab a home with $40k... the main priority is being able to diversify your work load. I believe in lowering the costs by performing common tasks myself and recruiting friends and family to help in the same sense (and they getting paid for their time.)

I'll be quite honest, when it comes to home rehabd, competition is fierce between each company. Can you believe a brand new Lowes built in my hometown in DE was recruited by a MD company that agree'd to build it for $1.2M I believe, and many people were protesting against Lowes for paying a low rate (even though that's what the company bidded.)

Either way, great info you provided and it seems family you have in MD seem to know their stuff... although I never heard of Bowie REIC's (not saying there isn't any but I haven't been able to see if there is any.)

[ProLogic]

Originally Posted by Young Spark

^^ Technically true but I don't believe I'm underestimating a rehab project... we're wanting to rehab a site, not build up an entire new home. I know contractors who do siding for under $2,000 --- drywallers who can do drywall for $4,000-$7,000 --- pay some neighborhood kids to paint the walls is a good way of saving money. But some may think this is breaking child labor laws when it really isn't. Kids in 7th-8th grades want some money to so why not have them help out on painting the walls, etc for a little money.

But then yes you have landscaping, fixture replacements, window treatments, and floor replacing but all can be done under $40k budget if planned right here in Baltimore.

Sorry, for listing all I did, I watch alot of HGTV << good stuff

And then again, they can fck up your walls. I have a great idea:

Instead of spending all that money paying a company, hire some Mexicans. Fast, cheap and efficient. Go to your local Home Depot and pick some up. That's what my dad did when he needed a lawn installed.

[Young Spark]

^^ Ha ha, yeah, but then again, thats why before hiring a team of people you always pre-qualify them. Contact past clients, see samples of their work, get a contract guaranteeing their work... etc.

You could always go the mexican route... but I mean, it would only be fair to pay them the same price unless they wanted a lower price (because offering them more would somewhat "offend" them.) No racist remarks, just saying, it a form of emotion.