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Forums » Buying Real Estate » all you 20 somethings---TIME TO BUY!!!!!!

all you 20 somethings---TIME TO BUY!!!!!! Subscribe to all you 20 somethings---TIME TO BUY!!!!!! 22 posts by 8 users

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Rich W.

Real Estate Investor  sioux falls, South Dakota  Member since Sep '08
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http://www.msnbc.msn.com/id/32051101/ns/business-real_estate/

This is courtesy of Marcus and Millichap. Good article. Three years ago, you there was a difference on the median price home to buy compared to renting the same median price home of $777 per month. In the last 3 years, the amount has dropped to $221. That is really significant. With the lower rates to buy and the higher rents to pay due to less inventory, it only makes sense to buy. Add in the tax benefits from owning and possible appreciation over time, and every young poster on here should try to do it. Read the article and get excited. Is there anyone on here tonight? BUY BUY BUY!!!! Rich.

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Valerie P.

Residential Lender  Panama (South of Buffalo), New York  Member since May '09
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Good article. Definitely agree that more and more markets are seeing the gap between renting and owning shrink.
Where I live (and invest) the average home price is around 70K and the average rent is $650 mol. No brainer.

I've been seeing an influx of first time homebuyers, which is great! Just a tip - if you currently rent and are looking to buy, make sure you're paying your rent with a check. A lot of the banks are asking for 12 months cancelled checks to prove on-time rental payments.

The process of buying may be a little overwhelming - but worth it! :)

Ted H.

Real Estate Investor  Portland, Oregon  Member since Feb '09
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Thanks for the article Rich .... so many people get caught up in all the doom & gloom in the media and miss golden opportunities right in front of them!

Dan O.

Real Estate Investor  Colorado  Member since Jan '08
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On the flip side, here's my 2 cents...

I would caution anyone considering jumping in and buying rentals to really understand your local market.

Solid deals are always available in any (hot or cold) market. However, many areas that experienced rapid appreciation in recent years haven't seemed to have hit bottom yet.

Also, depending on where you live (or invest), there may not be a large enough pool of renters (due to related job losses)available to fill the increase of residential rental inventory.

With the slow down of housing sales in many areas, a lot of builders and other would-be sellers have chosen to try to rent their residential properties. In those areas, rental inventories are WAY up and if an investor doesn't have the capital to cover potential holding costs... it could spell disaster.

Again, always opportunities in every market but it's worthwhile to check for hidden obastacles beneath the surface before diving in.

Rich W.

Real Estate Investor  sioux falls, South Dakota  Member since Sep '08
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Valerie- Thanks for the vote and reply.

Ted- I just presented the article and agree with you about the doom and gloom.

Dan- I'm not sure you read the article. It is explaining how it is silly to rent when the difference between the monthly outgo is so small between renting and owning your own.
I titled the post "all you 20..... I was trying to communicate with thr folks that WERE renting currently. TIME TO BUY!!!
However, I'd also differ with you on investing now. Do you really have a problem finding renters in your area? There have been job losses everywhere, but that doesn't reduce the # of people that live there- unless they moved. In my previous area of s. TX, we were approaching 9% unemployed, yet the rental market is stronger than EVER. NO BUILDER is building, and that reduces overall inventory. Many families have been foreclosed on, and that creates more folks that HAVE to rent. Banks are holding the foreclosures and WON'T rent them. That also reduces inventory. It creates the perfect storm for rentals. My occupancy is near 100%.
I'm finding the same thing in FL where I now live. Amazing demand for rentals. Same situation. Simple econ 101. When demand is high and inventory is low, price (or rent in this case) goes up.
I haven't heard of areas where the rentals are hard to rent, unless you're talking Flint, MI type areas. I would expect every investor to do his homework on the area hes' buying in before jumping in. You seem to be trying to "time" the market on when to buy. That never seems to work well. BUY BUY BUY, I'll repeat.
You're correct on good deals available in all markets, and research is needed as well as holding capital. I just disagree with the doomsayers. They are always late to the party and will be this time also, imo. If you choose to wait to buy, so be it. I would continue to suggest the opposite. BUY BUY BUY. Rich

Eric W.

Accountant  Tulsa, Oklahoma  Member since Feb '09
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Rich, I graduated college about three years ago and have been holding off on a purchase just to keep my options open. Now seems like a good time to buy, as you and the article mentioned, so I am trying to decide what my best option is for making a purchase.

Should I be looking for REO properties? Trying to find motivated sellers via out of state listing or NOD's? Looking for abandoned properties? All of the above?

Basically, where do you think I should focus my efforts?

Dan O.

Real Estate Investor  Colorado  Member since Jan '08
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Hey Rich,

No, I didn't read the article... only replied to your post.

Again, I agree that now (or anytime) is a great time to buy when approached correctly. That's always been my philosophy.

My caution is addressed to those folks who are looking to build a SFH rental portfolio right now that might not have the capital or experience to cover the contengency factor.

About the builder issue... although res building is now virtually non-existent in most areas, a large number of those caught with inventories at the start of the downturn found themselves slashing prices in an attempt to sell.

In the large number of cases where that didn't work (due to many other sellers doing the same thing, etc) it resulted in a larger than usual number of rentals saturating the market. Sure, foreclosures add to that number... both with pros and cons.

As far as it being a matter of Simple Econ 101, I disagree.... there are a few other factors involved besides basic supply & demand. ;-)

Rich W.

Real Estate Investor  sioux falls, South Dakota  Member since Sep '08
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Eric- My answer would differ based on the following answers.
1. Buying to live in or as a rental?
2. Are you area bound if it is to be a rental?

The areas have lenders being real slow and shaky!! They try to turn their short sales and REO's into an auction. That is never good for a buyer. Rich.
p.s. Any of the ways you mentioned can be good-or bad.

Cain K.

Real Estate Investor  Champaign, Illinois  Member since Jan '09
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Im 22 and just started in January with investing and now have 3 rentals. I also just purchased my first home which whenever I move out down the road will also turn into one of my rentals also...win win situation for me...

Eric W.

Accountant  Tulsa, Oklahoma  Member since Feb '09
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I'm purchasing the property as my first home to live in, so I'd qualify for the 8K tax credit.

My end game is to eventually purchase rental properties but right now I'm specifically focused on getting a good deal on my first home.

Rich W.

Real Estate Investor  sioux falls, South Dakota  Member since Sep '08
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Eric,
With the need to buy your own home, now would be a great time, imo. Take your time, don't make an EMOTIONAL decision, and make lots of offers on all kinds of seller situations. You'll find a great deal and it will only make you want more. Good luck. Rich.

Robert M.

Real Estate Investor  Bergen County, New Jersey  Member since Mar '08
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Rich,

Would you recommend buying a couple properties in another area of the country if someone lives in a market that is not great for investing.
Or would you recommend they move to a better market if they do not have a lot of obstacles holding them back from relocating?

Rich W.

Real Estate Investor  sioux falls, South Dakota  Member since Sep '08
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I can only tell you what i did, 2 years ago. I was in a not so great area and determined to move to So. Texas. I bought or built 63 homes and sold many of them. My goal was to make one million dollars from scratch in one year and then write another book. I was pretty close to on schedule and then the maximum 4 loans came out and I didn't make it. I had 8 deals in excrow, and lost 7 of them. If those would've closed I'd have made three quarters of a mil, but fell short of that.
2 weeks ago, I left So. Texas to move to swfl, to buy properties. So , I guess I would suggest either buying in a locale you like or re-locate to one you feel good about. That is what I've done 4 times in my career now and ALL have worked out well. Good luck. Rich.

Robert M.

Real Estate Investor  Bergen County, New Jersey  Member since Mar '08
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Rich would you be available to talk through the phone or e-mail?
I was also leaning towards moving so that I can be more hands on and actually learn the business.

Rich W.

Real Estate Investor  sioux falls, South Dakota  Member since Sep '08
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Robert,
I'm always available. I prefer to chat thru BP, unless it is of a personal nature. That way, others can benefit from our conversation and also others can enter in, which always gives you differing viewpoints. Let er rip. Rich.

Robert M.

Real Estate Investor  Bergen County, New Jersey  Member since Mar '08
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As you may remember, I visited the Cape 2nd week of July (the week before you moved down) and I liked the area and have been thinking of moving down there mainly to pursue buying properties.

I have been thinking about moving down to:
1) take advantage of the market and invest in real estate to build long term wealth.
2) I had met with another investor in the area who is very knowledgeable and along with you being in the area, it'd be priceless to learn from successful investors.

3) I have no real ties holding me back in any particular area besides family & I was looking for a change, at least temporarily
4) the NJ area doesn't have the best investments
5) I enjoy the warm weather/beach and have a friend living in the area.

I wanted to get your opinion on going through with this and chat more about it through phone/email, but I'll chat on here if you prefer.

Also, can I get a copy of your book? I have paypal for shipping costs.

Rich W.

Real Estate Investor  sioux falls, South Dakota  Member since Sep '08
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Robert- Come on down !! I'd love to help you and there are others in the area. PM me about my book. I don't sell it, only give it away for free. I think FL is great. Maybe we could do something together. I'll have some funds in next 60 days. Maybe HMLS or owner finance. Rich.

Robert M.

Real Estate Investor  Bergen County, New Jersey  Member since Mar '08
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Thanks Rich, I sent you a PM

Chris B.

Real Estate Investor  Syracuse, New York  Member since Dec '08
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Rich - If your financing properties in Cape Coral and Ft Myers under market value, I am interested!

Chris

Rich W.

Real Estate Investor  sioux falls, South Dakota  Member since Sep '08
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Chris- your post confused me. What are you looking for exactly. Rich.

   

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