All Forum Posts by: Louis Leone

@J Scott is asking very important questions.  If he/she is doing everything but doesn't know what they're doing or doesn't have a track record, they are basically just learning with your money (sometimes it will work and sometimes it won't).  For a 50/50 split you can get some very proven flippers to team up with (and still maintain your friendship).

If you were going to do that, you might want to still keep the price at 85K (higher basis) and get your financing on the 85K number.  They can then pay off the mortgage and you can give them a loan, but that may not be their issue.

They probably have the money to pay off the extra 5K (it's just that they don't want to go out of pocket).  Having a loan would require they still pay it as well as interest.  You will know once you propose it.

Maybe propose 85K but they pay all closing costs (should be in the middle somewhere).  They may go for that.

@Jon McCarron 

Welcome to Bigger Pockets.  I would start with the The Ultimate Beginner's Guide to Real Estate Investing and listen to  The BiggerPockets Podcast. on your ride.  They are about an hour long.  Pick topics you are interested in (a bonus is they will tell you their favorite books at the end of each podcast).  Some books I enjoyed were:

1) Multi-Family Millions: How Anyone Can Reposition Apartments for Big Profits by David Lindahl

2) Millionaire Real Estate Investor by Gary Keller

3) What Every Investor Needs to Know about Cash Flow by Frank Gallinelli

There are many more, but a good place to start.

Awesome Josh and Brandon!!  Congrats.

@Tory Ellis 

Tory,

Welcome to the site.  Great first post and I understand what you're saying.  The markets you are talking about are great markets (and much better value than some Manhattan areas).  I don't know Bed Stuy well, but that market has been on fire for a while.  

Here is how I look at it.  Markets go through cycles.  NYC is clearly on another serious upswing, so any flip you get involved with you should look to turn it around quickly.  The market will eventually pull back (probably will run for a good couple of years still) and the outer submarkets will get hit the hardest  (as they did in the past downturn).  You don't want to be in the middle of a flip when that happens (keep on eye on inventory levels and time on market indicators).  If the numbers will cash flow, then you're in better shape.  Based on your knowledge, you should definitely start in your own backyard, but just cover your bases under different scenarios that WILL eventually play out.

As for the investor friendly agent, I know it's frustrating but having been a broker in the past (I just focus on investing now), I will give the other side of it (as unpopular as it may be).  Brokers work on commission so it's very important that they spend their time with people who are going to buy (or sell).  When I mean buy, I mean in the next 60 to 90 days.  When the market is hot, you don't want to go around with people who may buy in 8 to 10 months or next year (you will not be able to support your family).  Investors are notorious for low balling and you also come across many investors who are wantabees (no real money or want to buy "no money down").  You will starve working with these guys.  Having a couple who is relocating and falls in love with a place is a much easier sale.  

If you want a broker to work with you, be very specific and show you can get the deal done.  For example, "I want to buy a townhouse in Bed Stuy for 600K and close within 60 days.  I've already been pre-approved and have all my financing lined up.  All I need to do is find the place."  That should help a lot.

Hope that helps.

Markets are primarily local and although some external circumstance may effect real estate across the board (financial crisis, etc), it's pretty hard to predict when one of the "external" circumstances are going to hit.  Local real estate markets, on the other hand, are a bit more manageable since you can see if there is population growth, job growth, inventory going up, vacancy rates, etc. so they become a lot easier to determine what part of the cycle you're in.

As for the stock market, there was a very long term study done by Javier Estrada, a finance professor.  He looked at nearly a century's worth of day-to-day moves on Wall Street and 14 other stock markets around the world, from England to Japan to Australia.

He found that if you missed the 10 best days you missed out on the majority of the gains. He also found that if you managed to be out of the market on the 10 worst days, your profits went through the roof.

Over an investing period of about 40 years, he calculated, missing the 10 best days would have cost you about half your capital gains. But successfully avoiding the 10 worst days would have had an even bigger positive impact on your portfolio. Someone who avoided the 10 biggest slumps would have ended up with two and a half times the capital gains of someone who simply stayed in all the time.

In other words, it's something of a wash. The cost of being in the market just before a crash are at least as great as being out of the market just before a big jump and may be greater.

The conclusion is that a small number of big days, in both directions, account for most of the stock market's price performance. Trying to catch the 10 biggest jumps, or avoid the 10 big tumbles, is almost certainly a fool's errand. 

I'd agree with Bill G. on this one.  The way he is presenting the property and not disclosing his interest is sleazy.  If you don't have a broker, I'd pull one in and make sure they look out for your interests.

@Jon Huber 

Yes, you're right Jon.  I wish it was free also, although I think it's only $30 for the whole year.  I like how you can really drill down quickly on different areas and stats.  There are definitely places you can go for free to get the info though.

@Jon Huber 

Thanks Jon....really great list.  

If you like playing with maps and visuals, this is a pretty good one:

https://www.richblockspoorblocks.com/

Here's one as well:

http://www.neighborhoodscout.com/