How do you start with very little capital.....

[DiceMan]

I've been almost working for 2 years saving up and investing in gold in silver and so far I've been able to save about $14,000. I'm looking at foreclosed condos in the area and wondering how to prepare to soon buy and rent out one of those things. I'm just looking for some tips here and there.

 

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[danoodle]

There are a lot of factors that come into play here. How is your credit? If you have a good score and "stable" job you are much more likely to get a loan and a decent rate in order to invest in RE. Also what price range are you looking at getting into? I am actually closing on a house on Monday that I am buying for under 8k in cash. Keep in mind this is Kansas we're talking about here. If you see the thread I started, it basically lays out everything from start to finish on my first two deals. I even have every single cost documented and how much rent I am getting from my houses. It is quite detailed and I recommend you check it out. Also, I am a big fan of the book The Weekend Millionaire's Secrets to Investing in Real Estate: How to Become Wealthy in Your Spare Time. Very cheesy title, but I am following the advice in it and even use the NOI spreadsheet basically exactly like it is in the book. I would also recommend you become familiar with the landlord/tenant laws in your state and would check out the website, thelpa.com. Has a lot of resources and will answer a lot of questions when it comes to being a landlord. It is not too difficult or a pain if you set yourself up for success. If you have any additional questions, I'd be happy to answer from my somewhat limited experience so far!

 

[DiceMan]

Man, after reading your topic, I wanna be like you. The area were I live at has foreclosed condos that usually start at around 20-30k. I'm still trying to get close to 20 but I still invest the money I save up in gold and silver at least so when I'm ready at least my money keeps up with inflation. I've got a somewhat stable job were I work in the government, my credit score is 626 but I've applied for a secured credit card which I plan to only use on bills only and pay the credit card all off every month. I live in the Washington metropolitan area but I guess I'll start looking further out for better deals. I'll pick up the book you recommended me after I finish up MJ's book which I'm enjoying a lot. I was kind of blow away reading your topic.

 

[CashFlowDepot]

You can make cash a lot faster if you do wholesale deals.

Find a el-cheapo deal on a condo or SF property. Must be about 50% below market. Get a contract on it,
then sell your contract to another investor ( at about 40% below market)

I have a step-by-step ebook that I'd be glad to share with the group for free. I don't know if there's a place to
post training books on the site but I will find out

To Your Success

Jackie @ CashFlowDepot.com

 

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[yellowpad]

I would love to have a copy of it. I really appreciate it!!

Calvin

You can make cash a lot faster if you do wholesale deals.

Find a el-cheapo deal on a condo or SF property. Must be about 50% below market. Get a contract on it,
then sell your contract to another investor ( at about 40% below market)

I have a step-by-step ebook that I'd be glad to share with the group for free. I don't know if there's a place to
post training books on the site but I will find out

To Your Success

Jackie @ CashFlowDepot.com

 

[21elnegocio]

You can make cash a lot faster if you do wholesale deals.

Find a el-cheapo deal on a condo or SF property. Must be about 50% below market. Get a contract on it,
then sell your contract to another investor ( at about 40% below market)

I have a step-by-step ebook that I'd be glad to share with the group for free. I don't know if there's a place to
post training books on the site but I will find out

To Your Success

Jackie @ CashFlowDepot.com

I would love a copy as well If I could have one please

 

[MNentre]

Hey Diceman,

Im not sure what the market is like in MD, but I dont know if a condo is the way to go. I'd look at a multifamily property and getting FHA financing with only 3.5 down and dirt cheap rates. Condos will have a lot higher variance when it comes to collecting rent.

Also, if you do a non owner occupied condo, you'll have to put down 20%, but with FHA owner occupied its only 3.5% and you can buy up to a 4-unit building.

 

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[hatterasguy]

You don't need money in real estate, but it certainly helps.

First figure out what your going after.

You state you want to buy foreclosed condo's, this is a good start. Questions:

1. What is the current FMV of these condos and what are the banks buying them back for? In my experience foreclosures tend to be a very bad buy because they were usually first financed a few years ago when values where higher. These days they are worth less than whats owed so just let the bank bid on them. Now if your talking about bank owned properties deals may be had if the bank is willing to take a proper write down.

2. What are the rents and vacancy rates for this kind of product in your area? Are there any restrictions in the building as to what percentage of units can be rented vs owner occupied? A lot of buildings have restrictions.

3. What kind of ROI are you looking to get? This varies by investor but these are the kind of numbers I would be thinking about if I were going to buy one of these.

Say these condo's are worth $200k on the normal market and the rents are $1,500-$1,800 a month. I'd be a buyer in the $100k-$150k range in that case. Your money is made when you buy, so always buy below market. Never do a deal just to do a deal, always move money to make money.

I'd approach such a market with calls to RE agents and a very targeted mailer to people who own such condo's. Your looking for a motivated seller, or someone who just doesn't care. Death is a good one, read obituaries.

This is where cash helps, be it yours or someone elses. The best deals cannot be financed.