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Real Estate?

Old 10-01-2005, 07:57 PM
  #1  
Do3r17
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Default Real Estate?

Just wondering if anyone else does Real Estate to make money. Me personally, I dont, I'm to young (17) but my dad does. He buys foreclosures, or houses that need a lot of work but are in good areas, fixes them up, and sells them for more. An examply would be:

1.Buy a 150,000 house in a nice neighborhood where houses go for 250,000
2.Put 50,000 into the house
3.Sell it for 250,000
4.Take 50,000 profit and invest that money into another house

My father does this and it helps the community. It does sound as though dishonest and evil. To me, I dont think it is. When people look at a real messy house, they instantly say "NO," I dont want this house, its trashed. What the dont realize is that they could actually bargain from houses like these. My dad just realizes that and takes advantage of the idea. I dont see any evel in that. If anyone has any objections to this please explain your point of view.

Anyways, does anyone else do this? My dad managed to net over a 1,000,000 doing this in the past 5 years.
 
Old 10-02-2005, 09:25 AM
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Default Real Estate

do3r17

I have invested in real estate on the side until I was laid off almost three years ago. Since then I have done it full time and just this year stand to make more than during the last 10 years of flying. I have a simailar program as your dad but I keep and rent. Each house can produce $300 to 400 of monthly income, plus the appreciation. The work is not very glamorous however. Hopefully I can save enough money so I can get another flying job someday.

SkyHigh
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Old 10-02-2005, 06:37 PM
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Do3r17
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Yeah, he use to rent, but hes tired of all the headache. You know, trying to collect your rent, people not paying rent half the time, evicting people, etc... He just wants to buy and flip now. Renting can gernerate good income however. Good luck with that
 
Old 10-02-2005, 06:44 PM
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Kill Bill
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Originally Posted by SkyHigh
I have invested in real estate on the side until I was laid off almost three years ago. Since then I have done it full time and just this year stand to make more than during the last 10 years of flying. I have a simailar program as your dad but I keep and rent. Each house can produce $300 to 400 of monthly income, plus the appreciation. The work is not very glamorous however. Hopefully I can save enough money so I can get another flying job someday.
i'll raise the BS flag on this one. i've done rehabs for over 10 years. let me just say it's extremely rare to have a rental turn an immediate profit due to many factors not the least of which is the rehab cost if it's a junker house. you may force appreciation up if you rehab but that's completely unrealized profit. if it were as easy as you say, everyone would be doing it... and they don't.
 
Old 10-02-2005, 07:11 PM
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Default Hey there Bill.

Bill,

I know you are a fan but wait just a minute. You are on the east coast and things are very different out west. I happen to have rentals in a college town. The profit margins on rent is very good. I specialize in renting to college students. There are other towns in the Northwest that have bigger colleges and have better returns. Each part of the country has its own ways of realizing a profit. Most of the time I build new and rarely remodel older ones, I never buy a home that is older than 10 years. You just have to find what the formula is for your region. As I understand it the east coast is old expensive and slow to appreciate. Other things that help are intrest only loans and a large down. Bill you are a super stud but the world is a little bigger than you. Thanks to my wonderful airline career being in the dump I operate two home building businesses now. One is a franchise the other is my personal rental portfolio.

SkyHigh Rent Prices.
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Old 10-02-2005, 07:35 PM
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yeah and when the profit margin is good on rentals they become ever more expensive to buy.

a lot of my experience is in the college town of san luis obispo, calif. many years ago, parents began buying houses for their students which, when sold after 4 or 5 years of college, more than paid for that college. today, a 2 bed, 1 bath house on a small city lot routinely goes for $700,000. check the MLS if you doubt me. try making a profitable rental on that without 30%-40% down. i no longer work in that market since there are NO bargains left.

i'd like to see the real numbers on these great deals you're talking about. personally, i think it's just more of your usual BS.

and i'm not on the east coast, i'm in texas.
 
Old 10-03-2005, 04:20 AM
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Default Bill

Dear Bill,

I was sitting in groundschool one day and realized that I could build a new home for %70 of its appraised value. I also knew that upon completion I could get financing that would go to %80 LTV. Therefore, I could make my own deals if I could secure credit lines worth at least 100K and find a supply of building lots. That is most of what I do. The remaining %10 is what I live on. I would love to have you come up here and we could have lunch and I could show you my operation. There is an entire industry growing to help owner/builders to do the same thing on their own homes. Sometimes I buy a home from a failed landlord. Like you mentioned people try and jump into managing rentals and the house gets distroyed. They sell in disgust and I buy it and fix it up. Last summer I bought one from a NWA 747 Captain. For some strange reason he was in the process of selling all his stuff. Maybe he knew something.

Skyline
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