All Forum Posts by: Ricky Bobby

A question. I am interested purchasing homes at auction and then relisting them for sale on the retail market. However it seems now these listings end up online to bid on? This looks like it's pushing up the price of these homes where it doesn't make it worthwhile, too much competition.

Also is this something that is done these days? Or are margins just not there? I would be looking in the under $250k range and paying with cash (no financing). Back in the go-go years of 2005-2006-2007 there weren't very many deals, is today similar to that time frame? Lots of buyers down here pushing prices up.

There is ZERO reason to carry a balance on your credit cards. I bought my house at 26 and ever since graduating college carried a zero balance on my cards, credit score was still "upper" 700's even without any sort of car loan (never even had one).

After buying in 2008, I started opening and closing credit cards earning money on their bonus deals. In 2012 I refi'd my loan and my credit score had INCREASED to over 800. Again no car loan, never carried a balance on my credit cards, and opened/closed dozens.

Lots of misinformation in this thread!

Oh, and pay off the debt first! Here is a problem you might get into to. If you get stiffed on rent and can't make payments your credit cards will jack up your rates. When starting out credit is the hardest to obtain and you'll be slitting your own throat if you start to defer payments on your cards. Pick up side jobs, do whatever you can to pay off that $9k.

The problem with investing in foreign markets is you risk the chance of a currency decline.

"O" is a great REIT in the US with long term dividend growth. You can normally pick it up for around 5% ROI. However if your currency declines 5% against the dollar you erase the entire years' earnings. The dollar has been pretty strong this year.

REITs also have income tax implications, at least to those who live in the US. The dividends in most cases are passed on as regular earnings to your income tax form, meaning most will pay in the 15%-25% range. Which means your 5% really becomes 4%.

Qualified dividends from stocks (again, for the US investor) are TAX FREE up to the 15% bracket. Which means a married couple earning $75,000 a year in dividends (with no other outside earnings) pay NO INCOME TAX on those earnings. Pretty powerful!

Keep in mind the value of the stock is set by the market. There are reasons why it's been sold off and the price is depressed, probably more than you as a layperson would ever begin to know.

Buying stocks involve significant risks especially ones where you make any kind of money. They have little intrinsic value whatsoever. Go to Google Finance and type in the ticker RJET, it's a recent purchase of mine.

I paid around $3/share and it's now trading about twice that after holding it a month or so. So I doubled my money (haven't sold yet).

Why did it drop so much? I'll tell you. The pilots have rejected several contracts and the company is unable to staff their planes, requiring them to park them. They hinted at even having to declare bankruptcy. That is when the stock dropped like a lead weight, and I threw money at it. If they declare bankruptcy, I lose all my money. When you buy a house, how often to you lose 100% of your equity? Never.

There was extreme risk involved. The voting on the new pilot contract closes tomorrow and I think it will pass.

Companies that are producing 5% dividend payouts right now are energy companies (for the most part) that probably aren't even able to cover their payouts with their free cash flow. This is dangerous.

That being said, again, I bought shares of Exxon, Chevron, BP and Shell between late August and late September. Average dividend was around 6% across all four. But I'm up around 20% on them in not even two months.

Why were the prices depressed? Oil dropped like crazy and so far has recovered a bit but it will most likely remain low for the next 1-2 years. These four companies can barely cover their dividend payout at current earnings, except BP, which has to dip into cash reserves. This is unsustainable, and should make any long term investor cautious.

I'm telling you this stuff to show you to make any sort of serious money in stocks, you need to have a lot to begin with, and be able to stomach huge price swings and be ready to buy when everyone else thinks you should sell.

For books, check out:

The Little book that beats the market
Rule #1

That will teach you how to analyze stocks and give you some basic fundamentals. Stocks are basically legalized gambling.

PS. I bought VW stock after the huge sell off as well.

PPS Good luck!

In Virginia, you need 5 years experience, a company net worth of $45k, and to pass an exam to get your Class A license, which is what is required for a "rehabber" to have. I wish it was just $200, we wouldn't be having this problem if it was :)!

I'll leave your reasoning for ignoring the massive increases in property for sale alone. I just don't agree with your conclusion. Going from ~1000 properties for sale (in this area) in 2004 to ~6000 in 2007 is NOT a good indicator IMO. I personally would much rather be in a steady market if you have the luxury of going out of state (I do not).

You've got to take everything that I wrote in as "one" and not piece by piece. Use those cities are target markets, then learn why they are growing. Presto!

:roll:

We're both saying the same thing, you just wrote it in different words.

Initially - yes, but only to mitigate the possibility of the home not selling right away, reducing my risk. But I didn't plan on doing it more than once.

The real point of asking her that was to get a feel for what constitutes a "homeowner" vs. a "rehabber" and to get a time frame, something you haven't been able to get either. So frustrating!

Is that what they told you when you posed that question? Or is that a hypothetical situation?

I would think you could easily prove you were in fact an "owner" simply by changing your address to that location and having mail and bills delivered there while you were working on the project.

I had written in a previous post - but since deleted - that it seemed this law was unenforceable too. I agree with you. I just don't know how they would know if you hired a contractor to do all the work - ie painting, laying of sod, what have you.

Here's a good link about this topic - (note: I have no link to nuvision homes)

http://nuvisionhomes.home.comcast.net/contracting.html

This is true. I called the state board who deals with the licensing of contractors to confirm.

804 367 8511, option 7 (to talk to a person)

She wasn't specific on the time frame for rehabs, but for building a home you must live in it 2 years before selling it to meet the requirement of an owner builder.

But, in regards to rehabs, she specifically said "if it's your own home, you can do anything you want".

I asked her what the guidelines for reselling a rehab were, and she couldn't give me a specific answer, just that "if your intention is to resell quickly".

I posed a hypothetical situation - I bought a "fixer upper", renovated it while I lived in it, then resold it, and she said that was OK as long as I was living in it.

There must be some form of guidelines here. I would also appreciate some help, as I'm about 4-6 months away from jumping into the rehabbing thing here in Virginia.