New to re investing – tips appreciated!

[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.

[Fearful]

There is no shame in admitting that business idea hypotheses do not work. I have been sitting around since 2007 trying to figure out what opportunities are available. The fact is that economic contractions inherently do not lend themselves to opportunity generation.

The one opportunity you can hope for is out-of-favor assets being sold at substantial discounts. I have used this for personal enrichment, recently buying a luxury car at a remarkable discount. If you buy stocks at “the bottom” you will do well when optimism returns.

Others on this forum have been modestly successful doing foreclosure auction purchases. This is difficult work, as it involves a substantial amount of risk, as the houses are generally purchased almost sight unseen. You will spend a great deal of time doing field work, attempting to gather as much information as possible about the houses before bidding. Often, successful auction investors work in teams – one at the auction, one in an office, and several in the field.

Flipping houses, though, involves substantial inventory risk. The historical perception that there is easy money to be made there comes from inflating asset prices, not from any magical adding of excess value from coats of paint or new flooring. The people doing auction purchases now are well aware that this is likely a transient opportunity.

Regarding your original idea: I applaud your noble intent but have to say you dodged a bullet if you figured out that foreclosed homeowners are people to avoid. Some are earnest and wonderful, but never underestimate the others’ ability to compromise their ethics to serve their own ends, and good luck telling the difference.

– Eric

[Fearful]

There is no shame in admitting that business idea hypotheses do not work. I have been sitting around since 2007 trying to figure out what opportunities are available. The fact is that economic contractions inherently do not lend themselves to opportunity generation.

The one opportunity you can hope for is out-of-favor assets being sold at substantial discounts. I have used this for personal enrichment, recently buying a luxury car at a remarkable discount. If you buy stocks at “the bottom” you will do well when optimism returns.

Others on this forum have been modestly successful doing foreclosure auction purchases. This is difficult work, as it involves a substantial amount of risk, as the houses are generally purchased almost sight unseen. You will spend a great deal of time doing field work, attempting to gather as much information as possible about the houses before bidding. Often, successful auction investors work in teams – one at the auction, one in an office, and several in the field.

Flipping houses, though, involves substantial inventory risk. The historical perception that there is easy money to be made there comes from inflating asset prices, not from any magical adding of excess value from coats of paint or new flooring. The people doing auction purchases now are well aware that this is likely a transient opportunity.

Regarding your original idea: I applaud your noble intent but have to say you dodged a bullet if you figured out that foreclosed homeowners are people to avoid. Some are earnest and wonderful, but never underestimate the others’ ability to compromise their ethics to serve their own ends, and good luck telling the difference.

– Eric

[Fearful]

There is no shame in admitting that business idea hypotheses do not work. I have been sitting around since 2007 trying to figure out what opportunities are available. The fact is that economic contractions inherently do not lend themselves to opportunity generation.

The one opportunity you can hope for is out-of-favor assets being sold at substantial discounts. I have used this for personal enrichment, recently buying a luxury car at a remarkable discount. If you buy stocks at “the bottom” you will do well when optimism returns.

Others on this forum have been modestly successful doing foreclosure auction purchases. This is difficult work, as it involves a substantial amount of risk, as the houses are generally purchased almost sight unseen. You will spend a great deal of time doing field work, attempting to gather as much information as possible about the houses before bidding. Often, successful auction investors work in teams – one at the auction, one in an office, and several in the field.

Flipping houses, though, involves substantial inventory risk. The historical perception that there is easy money to be made there comes from inflating asset prices, not from any magical adding of excess value from coats of paint or new flooring. The people doing auction purchases now are well aware that this is likely a transient opportunity.

Regarding your original idea: I applaud your noble intent but have to say you dodged a bullet if you figured out that foreclosed homeowners are people to avoid. Some are earnest and wonderful, but never underestimate the others’ ability to compromise their ethics to serve their own ends, and good luck telling the difference.

– Eric

[Fearful]

There is no shame in admitting that business idea hypotheses do not work. I have been sitting around since 2007 trying to figure out what opportunities are available. The fact is that economic contractions inherently do not lend themselves to opportunity generation.

The one opportunity you can hope for is out-of-favor assets being sold at substantial discounts. I have used this for personal enrichment, recently buying a luxury car at a remarkable discount. If you buy stocks at “the bottom” you will do well when optimism returns.

Others on this forum have been modestly successful doing foreclosure auction purchases. This is difficult work, as it involves a substantial amount of risk, as the houses are generally purchased almost sight unseen. You will spend a great deal of time doing field work, attempting to gather as much information as possible about the houses before bidding. Often, successful auction investors work in teams – one at the auction, one in an office, and several in the field.

Flipping houses, though, involves substantial inventory risk. The historical perception that there is easy money to be made there comes from inflating asset prices, not from any magical adding of excess value from coats of paint or new flooring. The people doing auction purchases now are well aware that this is likely a transient opportunity.

Regarding your original idea: I applaud your noble intent but have to say you dodged a bullet if you figured out that foreclosed homeowners are people to avoid. Some are earnest and wonderful, but never underestimate the others’ ability to compromise their ethics to serve their own ends, and good luck telling the difference.

– Eric

[Fearful]

There is no shame in admitting that business idea hypotheses do not work. I have been sitting around since 2007 trying to figure out what opportunities are available. The fact is that economic contractions inherently do not lend themselves to opportunity generation.

The one opportunity you can hope for is out-of-favor assets being sold at substantial discounts. I have used this for personal enrichment, recently buying a luxury car at a remarkable discount. If you buy stocks at “the bottom” you will do well when optimism returns.

Others on this forum have been modestly successful doing foreclosure auction purchases. This is difficult work, as it involves a substantial amount of risk, as the houses are generally purchased almost sight unseen. You will spend a great deal of time doing field work, attempting to gather as much information as possible about the houses before bidding. Often, successful auction investors work in teams – one at the auction, one in an office, and several in the field.

Flipping houses, though, involves substantial inventory risk. The historical perception that there is easy money to be made there comes from inflating asset prices, not from any magical adding of excess value from coats of paint or new flooring. The people doing auction purchases now are well aware that this is likely a transient opportunity.

Regarding your original idea: I applaud your noble intent but have to say you dodged a bullet if you figured out that foreclosed homeowners are people to avoid. Some are earnest and wonderful, but never underestimate the others’ ability to compromise their ethics to serve their own ends, and good luck telling the difference.

– Eric

[SD Realtor]

While your intent is okay there are some vagaries that need to be answered. Most important is, are you talking about San Diego or not? Also while you appear to be quite altruistic, if you are talking about helping people out I am assuming you would purchase the home first, then basically rent the home back to the previous owner correct?

So, if that is the case then you would be purchasing the home at trustee sale. I will say right now that our group is almost at a complete standstill because we have found the trustee sale path to be to competitive as margins are quite small. If your intent is to hold the property for quite awhile then you are okay. However know that you will need to do quite a bit of legwork. If you are thinking you can pull this off with a few hours a week then you are sadly mistaken and you will piss most of your money away. Also I concur with an above post that you may find after awhile that your current owners could not pay the mortgage and they will very likely fall behind on rent so you will end up evicting and getting new tenants. More time, and more money. If your goal is simply to flip that is fine just know that margins are quite thin nowadays.

One thing you may want to learn more about is trust deeds.

Alternately if you are looking at buying a home as a short sale, then renting it back to the original owner, I cannot comment on whether or not that constitutes fraud or not. If you think you can get a short sale, then relist it and resell it and still get margins…. well… good luck with that. Maybe last year you could have however the market has slowed considerably and I think more times then not you will lose money.

Again, all this is predicated on San Diego as well. I don’t know about other cities. I think you need to clarify your goal a little bit more and I could make a better recommendation. Buying and flipping right now is scary at best. You are about 2 years late to that party and right now everybody is into it and people will be getting burned unless you do it right. The best chances are ULTRA low end where you buy it, major rehab and sell it. Other side of the coin is high end and hope the high end doesn’t crumble while you hold it. Just know on the low end you will be competing against guys like Don Rady and people that have good crews, can rehab homes quick and own brokerages so they soak up all those costs.

[SD Realtor]

While your intent is okay there are some vagaries that need to be answered. Most important is, are you talking about San Diego or not? Also while you appear to be quite altruistic, if you are talking about helping people out I am assuming you would purchase the home first, then basically rent the home back to the previous owner correct?

So, if that is the case then you would be purchasing the home at trustee sale. I will say right now that our group is almost at a complete standstill because we have found the trustee sale path to be to competitive as margins are quite small. If your intent is to hold the property for quite awhile then you are okay. However know that you will need to do quite a bit of legwork. If you are thinking you can pull this off with a few hours a week then you are sadly mistaken and you will piss most of your money away. Also I concur with an above post that you may find after awhile that your current owners could not pay the mortgage and they will very likely fall behind on rent so you will end up evicting and getting new tenants. More time, and more money. If your goal is simply to flip that is fine just know that margins are quite thin nowadays.

One thing you may want to learn more about is trust deeds.

Alternately if you are looking at buying a home as a short sale, then renting it back to the original owner, I cannot comment on whether or not that constitutes fraud or not. If you think you can get a short sale, then relist it and resell it and still get margins…. well… good luck with that. Maybe last year you could have however the market has slowed considerably and I think more times then not you will lose money.

Again, all this is predicated on San Diego as well. I don’t know about other cities. I think you need to clarify your goal a little bit more and I could make a better recommendation. Buying and flipping right now is scary at best. You are about 2 years late to that party and right now everybody is into it and people will be getting burned unless you do it right. The best chances are ULTRA low end where you buy it, major rehab and sell it. Other side of the coin is high end and hope the high end doesn’t crumble while you hold it. Just know on the low end you will be competing against guys like Don Rady and people that have good crews, can rehab homes quick and own brokerages so they soak up all those costs.

[SD Realtor]

While your intent is okay there are some vagaries that need to be answered. Most important is, are you talking about San Diego or not? Also while you appear to be quite altruistic, if you are talking about helping people out I am assuming you would purchase the home first, then basically rent the home back to the previous owner correct?

So, if that is the case then you would be purchasing the home at trustee sale. I will say right now that our group is almost at a complete standstill because we have found the trustee sale path to be to competitive as margins are quite small. If your intent is to hold the property for quite awhile then you are okay. However know that you will need to do quite a bit of legwork. If you are thinking you can pull this off with a few hours a week then you are sadly mistaken and you will piss most of your money away. Also I concur with an above post that you may find after awhile that your current owners could not pay the mortgage and they will very likely fall behind on rent so you will end up evicting and getting new tenants. More time, and more money. If your goal is simply to flip that is fine just know that margins are quite thin nowadays.

One thing you may want to learn more about is trust deeds.

Alternately if you are looking at buying a home as a short sale, then renting it back to the original owner, I cannot comment on whether or not that constitutes fraud or not. If you think you can get a short sale, then relist it and resell it and still get margins…. well… good luck with that. Maybe last year you could have however the market has slowed considerably and I think more times then not you will lose money.

Again, all this is predicated on San Diego as well. I don’t know about other cities. I think you need to clarify your goal a little bit more and I could make a better recommendation. Buying and flipping right now is scary at best. You are about 2 years late to that party and right now everybody is into it and people will be getting burned unless you do it right. The best chances are ULTRA low end where you buy it, major rehab and sell it. Other side of the coin is high end and hope the high end doesn’t crumble while you hold it. Just know on the low end you will be competing against guys like Don Rady and people that have good crews, can rehab homes quick and own brokerages so they soak up all those costs.

[SD Realtor]

While your intent is okay there are some vagaries that need to be answered. Most important is, are you talking about San Diego or not? Also while you appear to be quite altruistic, if you are talking about helping people out I am assuming you would purchase the home first, then basically rent the home back to the previous owner correct?

So, if that is the case then you would be purchasing the home at trustee sale. I will say right now that our group is almost at a complete standstill because we have found the trustee sale path to be to competitive as margins are quite small. If your intent is to hold the property for quite awhile then you are okay. However know that you will need to do quite a bit of legwork. If you are thinking you can pull this off with a few hours a week then you are sadly mistaken and you will piss most of your money away. Also I concur with an above post that you may find after awhile that your current owners could not pay the mortgage and they will very likely fall behind on rent so you will end up evicting and getting new tenants. More time, and more money. If your goal is simply to flip that is fine just know that margins are quite thin nowadays.

One thing you may want to learn more about is trust deeds.

Alternately if you are looking at buying a home as a short sale, then renting it back to the original owner, I cannot comment on whether or not that constitutes fraud or not. If you think you can get a short sale, then relist it and resell it and still get margins…. well… good luck with that. Maybe last year you could have however the market has slowed considerably and I think more times then not you will lose money.

Again, all this is predicated on San Diego as well. I don’t know about other cities. I think you need to clarify your goal a little bit more and I could make a better recommendation. Buying and flipping right now is scary at best. You are about 2 years late to that party and right now everybody is into it and people will be getting burned unless you do it right. The best chances are ULTRA low end where you buy it, major rehab and sell it. Other side of the coin is high end and hope the high end doesn’t crumble while you hold it. Just know on the low end you will be competing against guys like Don Rady and people that have good crews, can rehab homes quick and own brokerages so they soak up all those costs.

[SD Realtor]

While your intent is okay there are some vagaries that need to be answered. Most important is, are you talking about San Diego or not? Also while you appear to be quite altruistic, if you are talking about helping people out I am assuming you would purchase the home first, then basically rent the home back to the previous owner correct?

So, if that is the case then you would be purchasing the home at trustee sale. I will say right now that our group is almost at a complete standstill because we have found the trustee sale path to be to competitive as margins are quite small. If your intent is to hold the property for quite awhile then you are okay. However know that you will need to do quite a bit of legwork. If you are thinking you can pull this off with a few hours a week then you are sadly mistaken and you will piss most of your money away. Also I concur with an above post that you may find after awhile that your current owners could not pay the mortgage and they will very likely fall behind on rent so you will end up evicting and getting new tenants. More time, and more money. If your goal is simply to flip that is fine just know that margins are quite thin nowadays.

One thing you may want to learn more about is trust deeds.

Alternately if you are looking at buying a home as a short sale, then renting it back to the original owner, I cannot comment on whether or not that constitutes fraud or not. If you think you can get a short sale, then relist it and resell it and still get margins…. well… good luck with that. Maybe last year you could have however the market has slowed considerably and I think more times then not you will lose money.

Again, all this is predicated on San Diego as well. I don’t know about other cities. I think you need to clarify your goal a little bit more and I could make a better recommendation. Buying and flipping right now is scary at best. You are about 2 years late to that party and right now everybody is into it and people will be getting burned unless you do it right. The best chances are ULTRA low end where you buy it, major rehab and sell it. Other side of the coin is high end and hope the high end doesn’t crumble while you hold it. Just know on the low end you will be competing against guys like Don Rady and people that have good crews, can rehab homes quick and own brokerages so they soak up all those costs.

[Prairie Dog]

Thanks for the replies. Eye opening to say the least. We really appreciate seeing the bigger picture here and learning from your experience.

We have focused on sd, two submarkets in particular. One inland and one quasi coastal. We recognize that the heyday of flipping has past but can hard work, informed choices and a conspicuous lack of greed still be a recipe for success?

I hadn’t been looking to get back in rentals, however, that was because of a single, horrible experience. I am ready to shake that off and take a fresh look at it.

It appears that rental vacancies has vacillated between 3 and 5% since late ’02. Given the inventory of f/c’d sfr’s hitting the rental market should I shy away from 3/2’s and look at mf’s with 2/2’s and smaller?

I love to hear about any experiences with rental management companies or live-in managers (reduced/free rent, etc.).

My previous landlord experience was with a newer home so maintenance was fairly predictable. Any costing advice when I’m crunching numbers would be greatly appreciated.

Thanks again.

[Prairie Dog]

Thanks for the replies. Eye opening to say the least. We really appreciate seeing the bigger picture here and learning from your experience.

We have focused on sd, two submarkets in particular. One inland and one quasi coastal. We recognize that the heyday of flipping has past but can hard work, informed choices and a conspicuous lack of greed still be a recipe for success?

I hadn’t been looking to get back in rentals, however, that was because of a single, horrible experience. I am ready to shake that off and take a fresh look at it.

It appears that rental vacancies has vacillated between 3 and 5% since late ’02. Given the inventory of f/c’d sfr’s hitting the rental market should I shy away from 3/2’s and look at mf’s with 2/2’s and smaller?

I love to hear about any experiences with rental management companies or live-in managers (reduced/free rent, etc.).

My previous landlord experience was with a newer home so maintenance was fairly predictable. Any costing advice when I’m crunching numbers would be greatly appreciated.

Thanks again.

[Prairie Dog]

Thanks for the replies. Eye opening to say the least. We really appreciate seeing the bigger picture here and learning from your experience.

We have focused on sd, two submarkets in particular. One inland and one quasi coastal. We recognize that the heyday of flipping has past but can hard work, informed choices and a conspicuous lack of greed still be a recipe for success?

I hadn’t been looking to get back in rentals, however, that was because of a single, horrible experience. I am ready to shake that off and take a fresh look at it.

It appears that rental vacancies has vacillated between 3 and 5% since late ’02. Given the inventory of f/c’d sfr’s hitting the rental market should I shy away from 3/2’s and look at mf’s with 2/2’s and smaller?

I love to hear about any experiences with rental management companies or live-in managers (reduced/free rent, etc.).

My previous landlord experience was with a newer home so maintenance was fairly predictable. Any costing advice when I’m crunching numbers would be greatly appreciated.

Thanks again.

[Prairie Dog]

Thanks for the replies. Eye opening to say the least. We really appreciate seeing the bigger picture here and learning from your experience.

We have focused on sd, two submarkets in particular. One inland and one quasi coastal. We recognize that the heyday of flipping has past but can hard work, informed choices and a conspicuous lack of greed still be a recipe for success?

I hadn’t been looking to get back in rentals, however, that was because of a single, horrible experience. I am ready to shake that off and take a fresh look at it.

It appears that rental vacancies has vacillated between 3 and 5% since late ’02. Given the inventory of f/c’d sfr’s hitting the rental market should I shy away from 3/2’s and look at mf’s with 2/2’s and smaller?

I love to hear about any experiences with rental management companies or live-in managers (reduced/free rent, etc.).

My previous landlord experience was with a newer home so maintenance was fairly predictable. Any costing advice when I’m crunching numbers would be greatly appreciated.

Thanks again.

[Author]

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