hi, i'm 22 years old and fresh out of college with a mid-range paying job in california. I want to get started in real estate investment as soon as possible, but don't know the best way to go about it and what types of properties I would be able to afford and what types of loans i would be able to get. can anyone help me with advice/tips/whatever you can to get me started asap? i'm particularly interested in flipping and interest only loans, but am also looking long term.. thanks!
thanks.. is it feasible to get started this early? with such little capital?
didYOUsearch
Cranky Member
posted: Jun. 23, 2005 @ 10:40p
myang83 said: thanks.. is it feasible to get started this early? with such little capital?yes people your age have done it...
but its not "early" any more....you are coming in very LATE in the real estate runup...look how old the threads linked above are. getting in now could be getting in on the wrong side of the curve
JayGatsby
Senior Member
posted: Jun. 24, 2005 @ 8:53a
Based on this post, I am calling the top in the RE market.
Reminds me of early 2001, when I had older relatives asking what tech stocks they should buy.
myang83 said: thanks.. is it feasible to get started this early? with such little capital?
Yes, it is entirely feasible to read the thread this early, and it requires no capital to do so.
Zer92780
Senior Member
posted: Jun. 24, 2005 @ 10:35a
Don't let the NEGs scare you off. Their hissing is no worse than... (pause)... ah, it's no worse than a leak in a gasbag. (Lost my train of thought there, just for a moment.) You can learn a lot at FWF, so hang in there! myang83 said: hi, i'm 22 years old and fresh out of college with a mid-range paying job in california. I want to get started in real estate investment as soon as possible, but don't know the best way to go about it and what types of properties I would be able to afford and what types of loans i would be able to get. can anyone help me with advice/tips/whatever you can to get me started asap? i'm particularly interested in flipping and interest only loans, but am also looking long term.. thanks! My only real estate is a REIT currently growing at a rate of 8% or so. While you are accumulating funds and looking for suitable property, you might investigate growing your nest egg with a REIT. If the real estate market does burst, you'll want to be in position (cash, connections). California is a rough market. Have you considered working with a real estate company in some capacity? Maybe even taking real estate courses? I've heard some folks get connected by handling open houses, picking up some extra income on weekends and making the sort of connections that might well be useful. At 22, you are doing the right thing, to look into owning property. You don't say what your job is. Is it a career or just a job until you find your metier? -Zer
unknownshopper
Senior Member<br>6K
posted: Jun. 24, 2005 @ 10:38a
Zer92780 said: At 22, you are doing the right thing, to look into owning property. -Zer
Zer92780
Senior Member
posted: Jun. 24, 2005 @ 11:07a
Okay, so I don't own any REAL real estate myself, but there are people on FWF who are no older than this chap and who might well share some info about how they got started. No harm in encouraging someone who recognizes the value of real estate, even in California and the inflated market that may or may not burst and prove all the dire predictions that are floating around. I think it's nifty that anyone can imagine building his own Home REIT at an age when I was not at all aware of my own capabilities. I like to see initiative like this. Don't you? -Zer unknownshopper said: Zer92780 said: At 22, you are doing the right thing, to look into owning property. -Zer
tjwoody
Addicted Member
posted: Jun. 24, 2005 @ 11:11a
unknownshopper said: Zer92780 said: At 22, you are doing the right thing, to look into owning property. -Zer
chuzzlewit
Senior Member - 1K
posted: Jun. 24, 2005 @ 11:12a
JayGatsby said: Based on this post, I am calling the top in the RE market.
Reminds me of early 2001, when I had older relatives asking what tech stocks they should buy.
Read thatwhole thing, take 2 aspirin, and get back to me in the morning.
When everyone wants a piece of the action (" i'm particularly interested in flipping and interest only loans, but am also looking long term.. thanks!")....is it time?
unknownshopper
Senior Member<br>6K
posted: Jun. 24, 2005 @ 11:36a
Zer92780 said: I don't own any REAL real estate myself ... No harm in encouraging someone who recognizes the value of real estate, even in California and the inflated market that may or may not burst
The terms "expensive" and "too late" should be based on the future, not the past. If you had a crystal ball which told you that real estate will go up another 50% within the next 5 years, then it is good to buy. If the CB says that it will go down 50%, then, it's time to sell (or short). Nobody knows the future. Don't you guys have friends who thought that 2001 was the peak of real estate and sold their house? How about in 2002? 2003? 2004? Past performance is no guarantee of future results. Real estate prices are dictated by the Law of Supply and Demand. As long as there are more willing buyers than willing sellers, prices will go up. Or course, the contrary is also true.
My friend's friends and family told him he was crazy when he bought his house in California in 2000. They told him that prices were too high and that he's too late and he should wait for prices to drop. The rest is history.
My point is this: Some people will tell you that you should buy and others will tell you not to buy. A year or two from now, half of them will say "See? Didn't I tell you prices were going up (or down)?". And you know what? Half of them are going to be correct and those are the ones you will hear from. The other half (the incorrect ones) will remain silent.
oxaca
Senior Member
posted: Jun. 24, 2005 @ 1:01p
The rest isn't history until the time he sells and we see if he came out ahead or behind. Right now, he's looking good. But, just like in a casino, your early wins encourage you to think "hey, easy money" and get greedy.
I think the best advice for you OP is to develop a time machine, go back 10 years and start your real estate investment at that point. Party's over bro!
Real Estate may be another diversifier to your total portfolio. Buying a home is not exactly an "investment", but to meet one's residential requirement. The best way (if one is not an expert in real estate business) to participate in Real Estate investment is through mutual funds (e.g., Fidelity real Estate Fund), which invests mainly REITs. Typically one can have about 10% in such a diversification.
myang83
New Member
posted: Jun. 24, 2005 @ 5:35p
thanks for.. some of the encouragement.. as far as the real estate "bubble" bursting, i've done some research and a lot of what i read has made sense.. comparing the real estate market to the stock market is not a fair comparison.. the tech stock "bubble" was so named because it was really a bubble.. the volatility was so high that it could burst and prices could go way up or way down in a span of a day. the real estate market looks to be (and this even seemed very intuitive to me) one that is much less volatile.. does anyone see property values just plummeting like stock prices? what could possible cause that? the thing is stocks are completely an investment vehicle while real estate is both an investment and something that people NEED to live in and work in.. it seems to me if the real estate market were to slow, it would be very gradual, and would inevitably come back.. with that being said.. let's just say there's no bubble and it's not going to burst.. does anyone have any other suggestions for me to get started? thanks
unknownshopper
Senior Member<br>6K
posted: Jun. 24, 2005 @ 5:39p
Isn't bankruptthem trying to unload some excess land? Might be a "win-?" proposition.
(Sorry, but I couldn't bring myself to call the buy side of the transaction a "win.")
GeorgyMcFly
Senior Member
posted: Jun. 24, 2005 @ 5:49p
myang83 said: does anyone have any other suggestions for me to get started? thanks
Um, no. A lot of what you are asking is discussed thoroughly in the link I posted on the 1st page of this thread. You obviously haven't read through it.
oxaca
Senior Member
posted: Jun. 24, 2005 @ 6:02p
myang83 said: does anyone see property values just plummeting like stock prices? what could possible cause that? ... real estate is something that people NEED to live in and work in.. it seems to me if the real estate market were to slow, it would be very gradual, and would inevitably come back..
What could cause that? How could it be a more than gradual drop? Leverage. People are borrowing with no money down, borrowing with adjustable rates, borrowing with negative amortization. A tiny drop in price or rise in rates could mean they can't afford the payments. If that happens, their bankruptcy and those of people in similar situations could increase supply on the already falling market.
The stock market bubble burst in 2000 was only a drop of about 40%. Housing prices have more than doubled in many areas, so a comparable drop to the stock market crash wouldn't even bring them down to what many would call their "fair value" based on rent ratios, etc.
Yes, real estate is something people need, but how many houses can one person live in? Because they are building more and more all the time. Will the market inevitably come back? Well, even after the 1929 crash the market came back, adjusted for inflation by 1959 or so.
Anyway, if you insist on shooting while aimed at your foot, the things that could provide some cushion against bankruptcy are 1. having a lot of cash in the bank or a big down payment, which can allow you to stay afloat if your payments go up. 2. having a positive cashflow from tenants, which will give you a cushion. 3. a fixed rate loan will reduce one of your forms of risk. Another safer way to play the real estate game is to become an agent. They make money whenever anyone sells, whether the owner is making a profit or not.
unknownshopper
Senior Member<br>6K
posted: Jun. 24, 2005 @ 6:42p
Redeveloping a strip club?
Figuring you'd be able to write off the "buyer's guide to gentlemen's clubs" research as a business expense?
edit: scried, go search the archives and you will see those were reasonable questions to ask the 'tree.
Daniel01
Member
posted: Jun. 24, 2005 @ 7:41p
My real estate agent says it's always the right time to buy.
You must be picking out the bits and pieces that you WANT to hear regarding the real estate "bubble." Back in '99 a lot of people were hearing that traditional rationale is out the window as far as stock valuation because these companies are just different. Throughout time there have been many bubbles, and the real estate market certainly isn't exempt. Any time you see this many people trying to jump on board with "investing" (actually SPECULATING) in any one thing (Stocks, tulip bulbs, beanie babies) you have a perfect recipe for a bubble. There have historically been corrections in the real estate market, but YES the overall trend has been upward (and over time it always will be).
I think it's interesting that you think of volatility only as downward movement. We are currently in one of the most volatile real estate markets in memory (many areas up 50%+ over last 3 years). Even Greenspan has now referred to real-estate markets as "frothy."
I would recommend for you to read some of the "Is there a real estate housing bubble" thread...there are many arguments on both sides of the issue.
Bottom line is, if you're buying a home that you're willing to hold for the long term (if you can't sell if for a profit or even to break even if values do fall) and are interested in the INCOME STREAM, not just capital appreciation then you may have a chance...but buy for capital appreciation at current prices and you run the risk of being the guy left holding the bag (like someone who bought dot com stocks who had no earnings at over inflated prices.
myang83 said: thanks for.. some of the encouragement.. as far as the real estate "bubble" bursting, i've done some research and a lot of what i read has made sense.. comparing the real estate market to the stock market is not a fair comparison.. the tech stock "bubble" was so named because it was really a bubble.. the volatility was so high that it could burst and prices could go way up or way down in a span of a day. the real estate market looks to be (and this even seemed very intuitive to me) one that is much less volatile.. does anyone see property values just plummeting like stock prices? what could possible cause that? the thing is stocks are completely an investment vehicle while real estate is both an investment and something that people NEED to live in and work in.. it seems to me if the real estate market were to slow, it would be very gradual, and would inevitably come back.. with that being said.. let's just say there's no bubble and it's not going to burst.. does anyone have any other suggestions for me to get started? thanks
Daniel01 said: My real estate agent says it's always the right time to buy.
Funny, thats what my mortgage broker says too...
Mark
MazdaMP
Senior Member - 1K
posted: Jun. 24, 2005 @ 9:24p
myang83 said: thanks for.. some of the encouragement.. as far as the real estate "bubble" bursting, i've done some research and a lot of what i read has made sense.. comparing the real estate market to the stock market is not a fair comparison.. the tech stock "bubble" was so named because it was really a bubble.. the volatility was so high that it could burst and prices could go way up or way down in a span of a day. the real estate market looks to be (and this even seemed very intuitive to me) one that is much less volatile.. does anyone see property values just plummeting like stock prices? what could possible cause that? the thing is stocks are completely an investment vehicle while real estate is both an investment and something that people NEED to live in and work in.. it seems to me if the real estate market were to slow, it would be very gradual, and would inevitably come back.. with that being said.. let's just say there's no bubble and it's not going to burst.. does anyone have any other suggestions for me to get started? thanksyes, sell your soul
myang83 said: comparing the real estate market to the stock market is not a fair comparison..Some truth to that statement. In the stock market a short seller can force the share price to drop by selling shares he doesn't own. I don't know of a similar mechanism in the real estate market to quickly correct a price run up. You can't sell a house you don't own.
didYOUsearch
Cranky Member
posted: Jun. 25, 2005 @ 2:53a
whodini said: You can't sell a house you don't own. The RE gurus in this forum would beg to differ
didYOUsearch
Cranky Member
posted: Jun. 25, 2005 @ 3:16a
myang83 said: hi, i'm 22 years old and fresh out of college with a mid-range paying job in california. I want to get started in real estate investment as soon as possible, but don't know the best way to go about it and what types of properties I would be able to afford and what types of loans i would be able to get. can anyone help me with advice/tips/whatever you can to get me started asap? i'm particularly interested in flipping and interest only loanshere's your older twin - 25 years old, in CA, and making big money in RE, but bleeding thousands per month, and in desperate need of big credit lines
Decide whether thats for you.
Zer92780
Senior Member
posted: Jun. 25, 2005 @ 10:05a
Variance is definitely one of the more fascinating aspects of real estate law. Go for it! -Zer Crazytreee said: by a wierd twist of fate I guess I can now call myself a developer. took some time off of law school and I decided to make some $$$. I found this guy who figured out how to build houses on a specific type of "difficult" property. knew someone with some money to invest. got everyone together... and, er... welp... looks like I just found myself a new career. plans are ready and I'm meeting with the architects on Mon morning. only problem is that this type of property requires a certain kind of variance. I plan to become an expert in obtaining said variances and potentially make that the basis of a law practice. I'm closing escrow on the lot next month, and we're ready to build pending approval of the variance [which I am working on now, at home, sans pants].
lot price + re-usable plans + $125/sq + sell myself = little or no risk. I've been expecting the "bubble to burst" for three years now. I should be fine for the next year.
I actually thought of making a long-term blog/post over the course of the next year of building this property [we're building it too], but I'm not very pleased with FW right now. FWF is no better than it ought to be, given that it's a free forum frequented by folks sitting on their bums. Reminds me, time to get moving! -Zer (edited a glitch, but now I'm up and outta here! Have a g'day, unless you've made other plans!)
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