Civil Engineer · Thousand Oaks · Member since 2016 · 42 posts · 10 votes
Hello everyone,
This is my very post here and I really have no expectations so here I go :)
Im 30 year old civil engineer with a steady income that is looking to invest in his first deal.
I would like to buy a house that I can live in so I can eventually sell it to make some money (Sell it within the first 3 years) to continue investing.
Should I buy a now or should I save my money and buy when the market is better?
Thank you!
Go to some meetings and find some wholesalers. Try to get on their list of potential buyers. They will sell you a property for 20-40% under market value. So, you can get into a house an live in a house you already have equity on.
Structures Engineer · West Hartford, CT · Member since 2015 · 55 posts · 20 votes
10y
You should spend some time thinking about what your goal is and where you want to be in 3 years (or further even). As you dig into this site you'll notice that there are not many people buying houses when the market is down and waiting to sell them when the market swings back up. That type of "investing" is actually called speculating, and is not much different than gambling.
What are you looking for? Live rent free? Make an extra $500/month? Flip a house for a $20k+ profit? There's ate different ways to do all of those. There are many approaches you can take, and most of them don't involve speculating... That's what is what is so awesome about REI.
So like I said, a good place to start is to figure out what exactly you want, and then what strategy is best suited to get you there.
There are a few good articles on here about different strategies for beginners. Hope this helps, good luck!!
Mike
Civil Engineer · Thousand Oaks · Member since 2016 · 42 posts · 10 votes
10y
Michael:
I'm a full time Civil Engineer with a decent income (Taxes are kicking my butt at the moment). I would like to start investing in real state.
This is what I have planned,
Option A:
Buy a house where I can live in , fix it up a lil bit and then sell it so I can make some money (Hopefully the house will create equity within the first 2-3 years).
Option B:
Buy a 4 unit, live in 1 and rent the other 3, once I have some cash, buy another house (where I can live in).
As you can see, I'm still a little uncertain on where and how I would like to get started. I wanna be able to buy multiple properties to either flip or hold, whatever is more convenient for me at the moment. As of now, Im still trying to figure out what the best way to get started would be.
I'd like to live in my own house and at the same time I'd like to start making more money through investments.
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
10y
Marco Cruzatt I'm a civil engr too and I'd say at some point you need to ask the question is if you time is better spent screwing around with active forms of re. It al comes down to your hourly rate. There are less likely to pain in the butt things to do.
I'm a full time Civil Engineer with a decent income (Taxes are kicking my butt at the moment). I would like to start investing in real state.
This is what I have planned,
Option A:
Buy a house where I can live in , fix it up a lil bit and then sell it so I can make some money (Hopefully the house will create equity within the first 2-3 years).
Option B:
Buy a 4 unit, live in 1 and rent the other 3, once I have some cash, buy another house (where I can live in).
As you can see, I'm still a little uncertain on where and how I would like to get started. I wanna be able to buy multiple properties to either flip or hold, whatever is more convenient for me at the moment. As of now, Im still trying to figure out what the best way to get started would be.
I'd like to live in my own house and at the same time I'd like to start making more money through investments.
Does that make sense?
Yes that makes sense! I'll try to offer some advice on how to start down either path, but ultimately you need to decide which outcome you see yourself benefiting from more.
Option A looks like it helps with one of your desires, to live in your own house. This option has potential to make you money down the road by physically putting the equity into the house, like you said by fixing it. In order to get started going down this route, you want to find a place at a pretty steep discount from the ARV. Like Cameron said earlier, its all about finding those gems. When you get your hands on a place at a discounted value, you know you can force the appreciation of its value. This should provide much more successful results than buying a place at full market price, doing some minor fixes, and hoping the market appreciates.
Option B will start making you money, but you wont have "your own place." This in my opinion is what I recommend. I currently live in a duplex and rent the other unit. While I am not making money, my tenants are effectively putting half the equity back into the property for me. If you screen your tenants thoroughly in the application process, and you're patient enough to find good ones, its worth it. Even if you don't start out in a place you can entirely call "your own." To get started on this route, learn how to analyze potential rental properties... what expenses to account for and how to estimate rent (I personally love Rentometer.com). There is plenty of literature on here and elsewhere on that topic. Once you've figured that out, practice! Look online for properties and analyze them. Use your analysis to figure out what you can offer on the property in order to make money, don't focus so much on what it is listed for.
I really hope this helps! I don't know everything and I still have a plenty of experience to gain.
Civil Engineer · Thousand Oaks · Member since 2016 · 42 posts · 10 votes
10y
Michael Fundaro
I'm leaning towards option B, I like that idea.
What I don't quite understand yet is once I get pre approved for a loan, let's say $500K, how do I go about finding the right place? Do I need to get an agent? What if I find a good deal but can only put 3.5% down?
That's my dilemma now.
Civil Engineer · Thousand Oaks · Member since 2016 · 42 posts · 10 votes
10y
Lane K. Thank you so much your reply.
I currently work fill time for a land development company. Pay is decent but I'd like to start thinking about my future and financial freedom, therefore I figured this would be a good way to learn as much as I can.
Just my 2 cents. When you buy right the market is good anytime. There is always a deal. I invest in land so I do not follow the heard and find more juicy deals that way.
Do I need an agent? Up to you, the seller pays the agents when you close. So as a buyer, if you want help finding a place, tell a realtor what you're looking for and they can probably help you out.
To answer your second question: to know whether or not it's a good deal goes back to my earlier post. Figure out what your metric is, how much cash flow do you want from the property. Lets say you want it to earn 500/month after all expenses. If you can get a mortgage for 3.5% down that allows a positive net cash flow of 500/month, then its a good deal. Now if you can only put 3.5% down, but you need 20% down for that cash flow to work, then its probably not a good deal for you. There might be some ways to raise capital for a down payment (i.e. gifts, selling something...) but in most cases, I know in Connecticut, you can't use borrowed money for a down payment.
So when you say "what if I find a good deal but can only put 3.5% down?" then it might not be a good deal... for you.