Thank you all for the 10 votes --
There are just so many ways to make money, control real estate and build equity on an accelerated basis using real estate as a vehicle (houses, lots, land, commercial and non-conforming properties) --
Sometimes, most of the time, we need to look at creative ways to buy and control real estate without having to apply for a hard or soft money loan. The sad thing for new investors is feeling like we are at the mercy of lenders (this is not the fun part of this business)
For over 40 years now I have been creating methods to do real estate deals without banks, without mortgage brokers, without hard money lenders or other types of organizations who want a chunk of your equity - those money people who on the surface will lead you to think that they are helping you, the investors, but the real bottom line is that they make millions of dollars connecting with you, the new investor, the developer, the seasons investors - you the person on the street - using bandit signs, direct mail, tax sales poaching, foreclosures - you who are busting your butt trying to find that one out of 20 sellers - that one who we call the "motivated seller", those lenders are like a ticks, sucking the green out of your wallet - those who want a piece of your action, your profit, your equity and your hard work and dreams of making it in this business! I say NO - have it your way without those who want to be your financial partner without a commitment.
But you, as an investor, will soon realize that if you miss a payment that they will come with a legal warrant to take your investment, bugger up your credit, go after your assets and force you in foreclosure.
Please don't take this post as an attack on lenders, only as a heads-up about the reality of this business - I love this business - at 76 years old - there is nothing more I want to do (well I am also an artist) -
This business becomes more fun and profitable as you experience grows, as your portfolio gets bigger and your cash flow really begins to FLOW ---
Thanks again for reading my thoughts ------ enjoy this business --- and take advice only from those who can prove to you that they really made it in this business - not from those who want to take some of your money for useless programs.
Cheers ---- Charlie
The "rental property estimator" under "tools" here is an excellent place to start and look at real numbers to evaluate. A 203k loan might be a good choice if you are occupying the property and renting the others, it has a low down payment which would allow you to work on your other debts. Lots to learn but if it saves money on rent while you have an asset appreciating it could be a good thing!
I house hacked my first property prior to paying down my student loans and car debt. In one year I could have paid them all off however my returns were so great that I decided to re-invest my returns into another property. BP has tons of podcasts, webinars, and blog posts that will teach you everything you want to know.
If you are motivated and not scared to take risks, the info from this website can make you more wealthy than you could imagine.
Before you make your purchase, you have to make sure you have a good ROI. To do that, you must absolutely be able to calculate ROI properly. I recommend chapter 5 of the book on rental property investing by brandon turner. Instead of jumping right into chapter 5, read all the way up to chapter 5 to learn about a lot of things you have to know regardless. If you make a bad deal and negative cash flow, you'll just add more debt and stress.
Also, you have to weigh in your cash flow vs what your interest rate debt is so it wouldn't make sense if you cash flow 200 a month but have to pay 1000 a month from your credit cards.
An investor mindset takes time. We see past Friday or the glittering car, clothes, vacations, etc for something bigger later. Dragging around a car payment and cc debt is what your broke friends are doing while they go nowhere.
Continue to be average or learn to delay shiny things. I don't think you're ready and I fear for those buying uneducated at this frothy stage of the market cycle.
Go with the sure thing that will help prove you are ready. Pay down a bunch of the debt. Brown bag a lunch every blue moon. Behave and spend like an investor while you learn. 20% RE returns don't just happen to every schmuck that falls off the cabbage truck.
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@Brieer Doggett If you have enough knowledge to buy it right and have a good deal, I'd say you should jump in as your investment return may help you pay off your debt. Use the BiggerPockets calculator to play the numbers, try to get a local mentor to guide you thorough the process and go for it. Good luck!
@Brieer Doggett My gut reaction to this question is always pay down the debt. However, we were interviewing @Craig Curelop for an upcoming episode of The BiggerPockets Money Podcast and his story of investing WHILE paying the minimums. He is cashflowing in an area that does not cashflow, and if he would have paid off his bills before investing, he'd still be paying them off.
It's a great episode, and comes out on 8/27.
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