New to re investing – tips appreciated!

[Prairie Dog]

Hi, I enjoy this forum thoroughly. Thank you for creating the community.

For past few years, we (sweetie and I) have been sitting on the re sidelines waiting for the right time. We divested ourselves of stocks and such. We have about $1M liquid and have a line up to 500k @2.5%

We’re just looking for a decent return. We’re not greedy.

In fact, I have been looking for ways to help homeowners stay in their homes. You know, I buy the property in a short sale, retain the past owners as a tenant. Offer to help them with their down, carry the note, etc.

The reaction from friends and family was cold and callous. Not toward us. Rather, their attitude toward the homeowners and their predicament. Some said that these people were just greedy or that they had eyes bigger than their wallets and they should never have been in these homes to begin with.

I don’t think of myself as naive but have I lost the plot? I’m the first to agree that there’s some truth to what they were saying but in the same breath I’d agree that there was a lot of looking the other way, and predatory practices, too? I would like to understand more about how this could work and if it could be mutually beneficial.

Someone told me that it would constitute fraud to sell it back to them. Still others said that the difference between loan balance and short sale amount counted as income so why would they want to stay anyway?

And if that’s just not feasible then I am still interested in picking up 1990’s homes and up with good bones, doing a bit of upgrades (no slab/plumbing/structural). I’d want to list it below market for a quick sale (hopefully 90-120 days from purchase to resell). I know three guys that want spec work, have been doing these kind of upgrades for years and appear reliable.

Even though we have $1.5M working capital I’d like to stair step into the market rather than jump in head first. I’m hoping to be involved in 3-5 properties in the first year. I like the security of straight purchases and bo’s (inspections, insurance, etc) but the auction I went to last was interesting.

Am I taking on too much or is this reasonable? Any advice?

Thank you.

[Dougie944]

I do think you are very, very naive about these people that are having their homes foreclosed. I also think, based on your comments, that you are going to lose your 1 million and then have to figure out how to pay back 500,000 that you no longer have if you try this venture. Please figure something else to do with your money.

[Dougie944]

I do think you are very, very naive about these people that are having their homes foreclosed. I also think, based on your comments, that you are going to lose your 1 million and then have to figure out how to pay back 500,000 that you no longer have if you try this venture. Please figure something else to do with your money.

[Dougie944]

I do think you are very, very naive about these people that are having their homes foreclosed. I also think, based on your comments, that you are going to lose your 1 million and then have to figure out how to pay back 500,000 that you no longer have if you try this venture. Please figure something else to do with your money.

[Dougie944]

I do think you are very, very naive about these people that are having their homes foreclosed. I also think, based on your comments, that you are going to lose your 1 million and then have to figure out how to pay back 500,000 that you no longer have if you try this venture. Please figure something else to do with your money.

[Dougie944]

I do think you are very, very naive about these people that are having their homes foreclosed. I also think, based on your comments, that you are going to lose your 1 million and then have to figure out how to pay back 500,000 that you no longer have if you try this venture. Please figure something else to do with your money.

[Prairie Dog]

Thanks for the input Dougie. We’ve made many attempts to work the numbers to justify the rescue scenario, but it just doesn’t add up.

As for the second scenario on my post; upgrading and flipping for a modest return? Can we at least do better than the pathetic rates we were getting on my investments?

I appreciate your candor. My ego answers to my brain. I’m certainly willing to go back to our other investments with my tail between my legs. I’d rather do that with my money intact than to have some really good war story. But I can’t help but feel that there is opportunity in this market, particularly for people like us who aren’t greedy.

[Prairie Dog]

Thanks for the input Dougie. We’ve made many attempts to work the numbers to justify the rescue scenario, but it just doesn’t add up.

As for the second scenario on my post; upgrading and flipping for a modest return? Can we at least do better than the pathetic rates we were getting on my investments?

I appreciate your candor. My ego answers to my brain. I’m certainly willing to go back to our other investments with my tail between my legs. I’d rather do that with my money intact than to have some really good war story. But I can’t help but feel that there is opportunity in this market, particularly for people like us who aren’t greedy.

[Prairie Dog]

Thanks for the input Dougie. We’ve made many attempts to work the numbers to justify the rescue scenario, but it just doesn’t add up.

As for the second scenario on my post; upgrading and flipping for a modest return? Can we at least do better than the pathetic rates we were getting on my investments?

I appreciate your candor. My ego answers to my brain. I’m certainly willing to go back to our other investments with my tail between my legs. I’d rather do that with my money intact than to have some really good war story. But I can’t help but feel that there is opportunity in this market, particularly for people like us who aren’t greedy.

[Prairie Dog]

Thanks for the input Dougie. We’ve made many attempts to work the numbers to justify the rescue scenario, but it just doesn’t add up.

As for the second scenario on my post; upgrading and flipping for a modest return? Can we at least do better than the pathetic rates we were getting on my investments?

I appreciate your candor. My ego answers to my brain. I’m certainly willing to go back to our other investments with my tail between my legs. I’d rather do that with my money intact than to have some really good war story. But I can’t help but feel that there is opportunity in this market, particularly for people like us who aren’t greedy.

[Prairie Dog]

Thanks for the input Dougie. We’ve made many attempts to work the numbers to justify the rescue scenario, but it just doesn’t add up.

As for the second scenario on my post; upgrading and flipping for a modest return? Can we at least do better than the pathetic rates we were getting on my investments?

I appreciate your candor. My ego answers to my brain. I’m certainly willing to go back to our other investments with my tail between my legs. I’d rather do that with my money intact than to have some really good war story. But I can’t help but feel that there is opportunity in this market, particularly for people like us who aren’t greedy.

[sdrealtor]

It can be done but there is alot of competition. If you are simply looking for better returns you can do that by picking up inexpensive properties and renting them out. Its possible to buy properties around $100K that you can rent out for $1000/month. I beleive these low end properties have the best potential to reap appreciation down the line also. I think a 15% average annual return over the next 5 years between cash flow and appreciaton is not unreasonable with potentially more upside.

[sdrealtor]

It can be done but there is alot of competition. If you are simply looking for better returns you can do that by picking up inexpensive properties and renting them out. Its possible to buy properties around $100K that you can rent out for $1000/month. I beleive these low end properties have the best potential to reap appreciation down the line also. I think a 15% average annual return over the next 5 years between cash flow and appreciaton is not unreasonable with potentially more upside.

[sdrealtor]

It can be done but there is alot of competition. If you are simply looking for better returns you can do that by picking up inexpensive properties and renting them out. Its possible to buy properties around $100K that you can rent out for $1000/month. I beleive these low end properties have the best potential to reap appreciation down the line also. I think a 15% average annual return over the next 5 years between cash flow and appreciaton is not unreasonable with potentially more upside.

[sdrealtor]

It can be done but there is alot of competition. If you are simply looking for better returns you can do that by picking up inexpensive properties and renting them out. Its possible to buy properties around $100K that you can rent out for $1000/month. I beleive these low end properties have the best potential to reap appreciation down the line also. I think a 15% average annual return over the next 5 years between cash flow and appreciaton is not unreasonable with potentially more upside.

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