Fixer uppers

[sd_matt]

Yeah I’ve been a landlord renting out rooms before but I didnt own the house. Does my moms house count? I know a couple people from when I was a leasing temp. I will definintey be talking to them on how to CYA.

With my income what it my first house will be a 2br or less…that is with a FHA or VA. So it would only be one tenant renting out a room to deal with. In the next couple years my income should go up quite a bit. How will the banks view a guy with good credit but a new job? I guess well see. But at least I don’t need to hurry for fear of RE bouncing right back up:) He he.

What are some things to avoid with fixers? I imagine “As is” would be one.

[EconProf]

Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.

[EconProf]

Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.

[EconProf]

Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.

[EconProf]

Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.

[EconProf]

Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.

[Fearful]

[quote=EconProf]Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.[/quote]

Beautifully put. You hit on all the key points. Your post should be required reading for anyone contemplating investing in real estate. People still seem to overlook the fact that real estate is a risky, illiquid, high carrying cost investment that must provide substantial returns to compensate.

[Fearful]

[quote=EconProf]Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.[/quote]

Beautifully put. You hit on all the key points. Your post should be required reading for anyone contemplating investing in real estate. People still seem to overlook the fact that real estate is a risky, illiquid, high carrying cost investment that must provide substantial returns to compensate.

[Fearful]

[quote=EconProf]Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.[/quote]

Beautifully put. You hit on all the key points. Your post should be required reading for anyone contemplating investing in real estate. People still seem to overlook the fact that real estate is a risky, illiquid, high carrying cost investment that must provide substantial returns to compensate.

[Fearful]

[quote=EconProf]Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.[/quote]

Beautifully put. You hit on all the key points. Your post should be required reading for anyone contemplating investing in real estate. People still seem to overlook the fact that real estate is a risky, illiquid, high carrying cost investment that must provide substantial returns to compensate.

[Fearful]

[quote=EconProf]Back when prices were rising 1 – 2% per month, many people made good money buying fixer-uppers, making all the improvements, and then selling them 6 months or a year later. They congratulated themselves on their skills, but forgot that it was a rising market combined with their leveraged position that gave them most of the profit.
In a falling market, both of those factors work against you, so the idea fails big time.
Add to this the tendency to underestimate fixup costs, ignor their own time committment, downplay transaction costs getting in and getting out, ignor the opportunity cost of their down payment, and you’ve got a losing proposition except in rare times and with the perfect property.[/quote]

Beautifully put. You hit on all the key points. Your post should be required reading for anyone contemplating investing in real estate. People still seem to overlook the fact that real estate is a risky, illiquid, high carrying cost investment that must provide substantial returns to compensate.

[sdduuuude]

The difference between an economist and an entrepreneur:

Entrepreneur is walking along and sees a $10 bill. He picks it up and puts it in his pocket.

The economist is walking along and sees a $10 bill. He thinks to himself “this can’t be possible in an efficient market” and continues walking.

Such are the responses of Rustico and Econ Prof.

Both are right. If you look carefully at specific deals, there are some that will work. I suspect, though, there will be more deals that work in a couple years.

[sdduuuude]

The difference between an economist and an entrepreneur:

Entrepreneur is walking along and sees a $10 bill. He picks it up and puts it in his pocket.

The economist is walking along and sees a $10 bill. He thinks to himself “this can’t be possible in an efficient market” and continues walking.

Such are the responses of Rustico and Econ Prof.

Both are right. If you look carefully at specific deals, there are some that will work. I suspect, though, there will be more deals that work in a couple years.

[sdduuuude]

The difference between an economist and an entrepreneur:

Entrepreneur is walking along and sees a $10 bill. He picks it up and puts it in his pocket.

The economist is walking along and sees a $10 bill. He thinks to himself “this can’t be possible in an efficient market” and continues walking.

Such are the responses of Rustico and Econ Prof.

Both are right. If you look carefully at specific deals, there are some that will work. I suspect, though, there will be more deals that work in a couple years.

[sdduuuude]

The difference between an economist and an entrepreneur:

Entrepreneur is walking along and sees a $10 bill. He picks it up and puts it in his pocket.

The economist is walking along and sees a $10 bill. He thinks to himself “this can’t be possible in an efficient market” and continues walking.

Such are the responses of Rustico and Econ Prof.

Both are right. If you look carefully at specific deals, there are some that will work. I suspect, though, there will be more deals that work in a couple years.

[Author]

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