Getting into the market...

[cmaq]

<div class="bbWrapper">I noticed that some people here who do deals, live in areas that have properties, for example single family homes valued at 50,000 to 100,000. These kind of prices require much lower down payments, thus much more affordable to jump in the game. <br /> <br /> My question is what are everyone&#039;s thoughts on someone getting into the business in areas that tend to offer real estate at higher rates such as starting at 300k to 400k. These require steeper down payments. <br /> <br /> I have seen success stories, where some have put out 5k to get into the business, but if one does not live in a lower valued area, this doesn&#039;t seem possible. <br /> <br /> What are your thoughts on getting started in a market area where values are higher and require steeper down payments. Yes, there is always creative financing, such as including seller financing, but this will not bring down the down payment to 5k.</div>

 

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[hakrjak]

<div class="bbWrapper">I&#039;d probably move to a sub $100k market before I&#039;d plunge in as a beginner in a $300k+ average market. Sounds like it would limit your risk a bit.<br /> <br /> Cheers,<br /> <br /> - Hakrjak</div>

 

[cmaq]

<div class="bbWrapper">Sorry, I misrepresented myself, I&#039;m not a beginner, I&#039;m just trying to cultivate some ideas. What I&#039;m saying is, does anyone have ideas on how people can get started from a low point in a market valued higher than 100k. There is always the simple concept of create a business and filter that money through, but I&#039;m looking for some sort of creativity.</div>

 

[tchandy]

<div class="bbWrapper">Since you&#039;re not a beginner, what have you down in real estate if you don&#039;t mind if I ask? 300K is a tougher market and as Hakrjak said 100K may be better initially.<br /> <br /> Tom</div>

 

[cmaq]

<div class="bbWrapper">Nothing significant, one small building, but I work in the business. I plan to build up more as I build some more cash flow. There are areas that are 100k around me, I&#039;ve found some duplexes that go for around 170 to 200.</div>

 

[hatterasguy]

<div class="bbWrapper">My area is like that. <br /> <br /> I got started with no money in a higher priced area by using partners and other peoples money. You don&#039;t need money, you can borrow it. My first spec house I built and sold was on the low end of the new construction market. I closed it for $372k in July, the next one which I might have sold will be $350k. Both of these will be sold to first time home buyers looking to take advantage of the $8k tax credit. <br /> <br /> Middle of the road new houses in my city are $400k-$500k, when the market starts to get a bit stronger I will move into that market. <br /> Its hard as can be, but it can be done.</div>

 

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[cmaq]

<div class="bbWrapper">Partners is definitely a way to go, I&#039;ve heard many stories of people getting started from partners.</div>

 

[hawaiiloans]

<div class="bbWrapper">I&#039;m in the same situation as you. I&#039;ve decided to move to an area that has cheaper housing, for smaller fees to get involved, and the rental income to debt seems to make more sense percentage wise in a 100k-200k environment.</div>

 

[Mental Rental]

<div class="bbWrapper">Investing in higher end properties requires a lot more money than investing in lower end rental properties. It&#039;s harder to find good deals on higher end real estate, because you&#039;re competing with homeowners, not just investors.<br /> Also, market rents on a rental agreement in a working class neighborhood are better relative to the purchase price. <br /> I&#039;d start with lower end real estate, try a flip or two, sign a rental agreement or two on some longer term investments, and see how it goes.<br /> Best of luck,</div>

 

[hatterasguy]

<div class="bbWrapper">Well in my area $300k isn&#039;t considered high end, its lower middle of the market. <br /> <br /> I like it because your margins are bigger. If you make $20k on a house you need to do a lot more a year to make any money, vs $100k-$200k+. <br /> <br /> If I can make $100k on a house building one, which isn&#039;t really anything special in my area. Thats a full years pay on whats really 2 1/2, 3 months worth of work. Plus on most you make more than that. You only need to build and sell 3 or 4 a year to make a fantastic living, and you can take the winters off.</div>