I've spent the past 6 years as an Asset Manager in the default sector liquidating REO's for the banks by rehabbing them for the retail market and the auction market (primarily Auction.com). The auction platform took away some of the business from the initial asset management firms because of the banks were able to stop pooring money into rehabbing and auctioning the properties AS-IS leaving ALL due diligence as the responsibility of the buyers. Now some banks are allowing their mortgage servicing companies to step in during the foreclosure process to preserve the property and then it goes on to the market via HUD, Freddie Mac, Fannie Mae REO's or even still the auction platform. Also, a good majority of homes you see being provided by companies like Econohomes are bought through the same platforms. So...if you're willing to be diligent you can get the properties from the same places.
I'm putting this out there for those 1st time investors who find themselves getting consumed by information from those out there who call themselves GURU's and want to charge you for their one of a kind secret to investing in real estate. I beleive that real estate is still the one avenue the average hard working person to acheive some sort of financial freedom.
With the help of a knowledgeable agent, my wife and I bought an REO SFR in SoCal in 2011 using the 1st Homebuyer FHA loan. We lived in it for 2 years to take advantage of bieng exempted from capital gains tax and sold it in May of 2014 for a 6 figure net. We used the money to payoff our debt and now with that experience under our belt looking for our next project. During this time with also had our 1st child. For a couple just starting a family and living in the Los Angeles County market this was a tremendous accomplishment and now living pretty much debt free, outside of a car payment (i don't beleive in paying off cars) makes an incredible difference in our lifestyle. We now look at the owning real estate in a completely different way. It's not what it was to past generations.
Now...our next project may not clear a 6 figure margin but the confidence I gained from the past transaction I have no reservations about being to flip my way to providing a great life for my family. It may be $25K here or $50K there...but by maintaining have no other debt that bodes for a nice life. So...happy, smart investing to all of you.
Thank you for sharing @Xavier Randall
Good luck on your next endeavors!
Originally posted by @Xavier Randall :
now living pretty much debt free, outside of a car payment (i don't beleive in paying off cars) makes an incredible difference in our lifestyle.
Thanks for sharing. I am curious as to why you don't believe in paying off your vehicle? Could you please expand on this? Thanks again.
Well said @Xavier Randall
Thanks for sharing your story!
@Matthew Nixon, I've bought my share of used and new cars. Just recently we converted to a lease. My wife and I share the view that a car is a necessity and admittedly, it's nice to have 1 that's dependable. So...a lease can let's us drive a newer model at a lower expense. Notice I used the word "expense". Considering that cars aren't made like they use to. I mean back when I was high school a lot of parents would pay off their current car to give to their kids when it was time. Hey...a Honda Accord would last a life time then. Not so much today. For me personally, I've look at the numbers several times and it doesn't make sense to payoff something that immediately has a depreciating value the day after you buy it. Even with real estate...the only way I would payoff a home is if I had a 10 year mortgage and could payit off just in time for retirement. Today's cars are just a means to a need with no opportunity to ever sell it for more than I bought it.
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Thanks for the explanation. For a long time I always thought it to be best to pay off your car and enjoy not having a car payment.
Like you I have changed my thought process recently and lean toward leasing over purchasing. Something about getting to drive a new car every 3 years or so is appealing. And even if you choose to purchase and pay it off, you've still got repairs that get costly as the car gets older.
See you around the site.
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