Real estate VS. Startups need advice on where to invest!

[abhb]

Hey everyone i am in the midst of my christmas break from school at least (working OT during holidays joy) and i want to get my money re invested while i have the time. I have been having the toughest time deciding wether to invest into a home for myself or to try and hold off to use my capital for my own startup or to partner up with some one else. I have a bit less than 100k saved up and i have found quite a few properties to invest in which show strong returns hands down.

But being the entrepreneur that i am cannot resist the idea of an opportunity to start my business and if i invest into property that dream will become much harder to obtain due to no start up funds being available on my behalf. Now i do unerstand the finance game and how to pull cash out of your home's equity but if i go into a home i do not plan on doing anything like that because i would like i said be flipping it within a 3 to 5 year window since it will be purely an investment for future endeavors. ok time to stop ranting any advice or opportunities would be appreciated please PM me anytime.

[Gopal Dev]

Hey are you looking to invest in a home or a rental property? I recommend the latter because if it is your first Real Estate purchase you can dig into your IRA/RRSP and use the funds tax free as part of the first time home buyer's plan. You will also more easily get approved for a mortgage because with a rental prop you will be using mortgage helpers (your tenants) to pay off the loan. This will provide much needed cash flow and minimize what you have to put out of pocket on a monthly basis which you can then invest in a reasonably affordable startup. This way you do not need to choose one over the other but have both running in tandem. Best scenario is if you run a home based business out of your rental prop so you can make tax deductions on both the fact that you are a landlord running a revenue building and also a young entrepreneur with a work at home business. What kind of business are you interested in? Do you have a product/service of your own that you want to market or someone else's?

Starting a home based business that doesn't require product development and inventory is ideal. Work with a reputable company with a strong track record for success and large client base. Also, having all of your shipping, billing, accounting, technical support, and customer service taken care of will give you full freedom to focus on marketing alone. Products/Services based on needs rather than wants that will not require people to change their buying habits will offer the greatest potential for success and residual income. Work smart and stick to what works. Use the Internet as an invaluable resource for generating endless targeted leads so you don't have to rely on family and friends who often end up being your harshest critics. Brand YOU Inc. and establish yourself as a knowledgeable leader and people will seek you out, rather than you having to chase them.

Let me know what you decide to do and hit me anytime for any other questions/ideas. We'll chat more soon. Best,

Gopal (The Musical Mad Scientist and Entrepreneur)
The v-Fusion Group
gopal@thevfusiongroup.biz

[BusinessAdviser]

Or as another option:

Let's say you invest in the stock market. The stock market has averaged over 10% annually over the last 80 years. We'll just assume that you only get 10% return annually, which is lower than to be expected, AND you don't see the benefits of buying low, which you're bound to see should you invest right now.

$100,000 in 45 years, invested in a simple ETF, would be worth roughly $7.3 million.

Think that might be worth considering?!

If so, shoot me a message, and we'll talk about what I can do for you.

[dmitryro]

You can invest in our water park project in North Carolina from 6 to 9 months and double your investment within 9 months. The offer is for those who come at this stage. I am ready to send you the package and agreement if you are interested. Please contact me at simion.citizenusa[at]gmail.com

[ChadFraz]

I was in a similar situation you are a while ago. I had just graduated college (Purdue, May 07) and found myself in a job with a good income and a great deal of $ saved up over the years. I was actually working at Charles Scwab as a Broker (series 7,63 etc.) right before the economic issues started. I was there when the market hit an all time high and still decided against investing in it. With the economy in its current state and many stocks at a low, I still am not investing in the market because of a few factors.

I am young. I want to build as much capital as quickly as possible to use for businesses and additional business ventures. By putting my money in the market, I am assuming a long return rate (in most cases) and am financially handhuffing myself when the opportunity to set myself apart from my peers is right in front of me. I can also tolerate more risk because I am 23.

With home prices and interest rates so low, I just finished the purchase of my second house flip. From start (closing) to finish (all rehab done and on the market) it will be a 3 month process. I have enough cash to hold onto the properties while home prices increase and have enough margin that even if it sells at the current market prices I still make a great profit (25-35%). Let me be clear by saying I purchased a foreclosure that needed a good deal of TLC (30K in construction loan).

The other aspect that makes this so important is having the bank pay for rehab. I could have paid for the repairs out of pocket but would have further limited myself financially when I could have gotten a construction loan and had the bank pay. It also allows me to put the cash I still have to work for me while I am working on the house (car flips, ebay, etc.)

Despite being a licensed stock broker, I think there is far more money to be made in the immediate through real estate. This bodes well for you if you are young, have cash and can make the bank work for you.

[abhb]

First off let me say thank you for these very detailed responses they really are giving me a more comfortable idea of what i want to do.

I really do believe the stock market can give you the return you need if your satisified with using your money at retirement. But thats not my case as Chad i am young and looking to start up revenue generating opportunities that do not tie me down in the "Long Term" now how long is that i have still yet to define.

To be honest i just have no opportunities and it seems the business school that i now attend has the wrong crowd for me to network with (it was my 2nd choice). I do have a few contections to do some online sales for furniture i ahve a few connections with warehouses in my area but i would only be making 15-20% profit on my sales which isnt bad but will take more time than i would like to invest in it and doesnt really have the potential to grow. So i guess real estate is the game and im here to play. Keep posting people if you have any ideas or advice or whatever YE represent.

Chad if you get some time i would like to talk with you just to get some more insight on your personal experience in real estate

GOPAL me and you think alike bro lets connect more and maybe even throw some ideas out.

Bus advisor ill keep trying to catch you on aim

If anyone is interested also i have a voice chat server thru ventrilo if you have a headset you can download the software free and we can talk direct via voip. PM for my vent info

[rogercbryan]

I'm still a firm believer that you need to own the house that you live in before you do anything else. This is the most important credit item you will ever have. Aggressively work to pay it off. This way if you ever fall flat on your face you'll at least have a roof over your head.

With that being said you have to be smart these days. Your home used to be a wise 'investment' when it came to appreciation. I am not saying that home ownership is or is not a good investment at this time. I'm simply saying that owning your own home should be a priority for everyone.

Of those people who are not able to retire when they are in their 60's a large percentage of them never bought and paid off a home. I've seen a great deal of this with my family members.

Once you have a home and you are comfortable with your payments and comfortable with your life you will be better suited to tackle the business world.

[ScottRobertson]

I'm still a firm believer that you need to own the house that you live in before you do anything else. This is the most important credit item you will ever have. Aggressively work to pay it off. This way if you ever fall flat on your face you'll at least have a roof over your head.

With that being said you have to be smart these days. Your home used to be a wise 'investment' when it came to appreciation. I am not saying that home ownership is or is not a good investment at this time. I'm simply saying that owning your own home should be a priority for everyone.

Of those people who are not able to retire when they are in their 60's a large percentage of them never bought and paid off a home. I've seen a great deal of this with my family members.

Once you have a home and you are comfortable with your payments and comfortable with your life you will be better suited to tackle the business world.

Roger, I see your logic behind what you are saying, but I don't feel you can generalize that advice as you have. abhb is young, willing, and able to take on risk. He/she does not want the capital tied up in something - especially something that has little/no cash flow (or even if it is not maximizing it's cash flow).

This echoes the general problem that I have with real estate vs. other investment vehicles: il-liquidity.

However, I think that the problems with liquidity are overshadowed by the return potential currently available on residential real estate. I realize that my post now seems a tad redundant, but the point is that I don't think abhb would be best off by using his/her capital and income to buy a home to own/live in.

As I am suggesting, at the moment I feel that the right real estate would be a great investment , the question that I have is why are you willing to hold the properties for so long? Surely the prices are going to take time to inflate again, but over that time period there may be more beneficial investments to make. I haven't looked at any data, but there are still homes being sold currently so wouldn't multiple, quicker flips be better than fewer long term flips?

abhb - like yourself, I am also a young, ambitious business student. We'll have to talk more and bounce some entrepreneurial ideas around.

Cheers.