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Investing in real estate

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Q. Do you guys think investing in real estate is a good business?

My plan is I will invest in houses and small buildings that are cheap starting out, fix them up and sell them or rent. Then keep saving money until I can purchase nice expensive properties.
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Lot of people already way ahead of you, bro.

How will you know what's worth fixing up? By the time you conduct structural repairs, renovate the interior, do landscaping....it all eats into any and all profit. Plus some places are sold cheap because they're basically fucked. No amount of money will save it.

Unless you're qualified and licensed to do the repairs yourself, it's a high risk, low margin game.

You'd be better off buying an old run down shithole on a large block in an area that's gaining popularity. Bulldoze it, build high density housing. Then sell subdivided lots. But that takes a lot of capital.
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>>1002823

You're going to want to avoid doing repairs that are more complicated than basic bricklaying and carpentry.

Paying a contractor to fix complicated shit is cheaper than fixing it yourself and then your tenants being like OH LAWDIE LAWD WE CAN SUE THIS GUY FOR LAWTS O MONEY, THANK YOU LAWD JESUS and then they can't sue you but you still get fined for violating the law.
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Me and my brother will be doing most of the repairs ourselves, we will hire people for the other work that needs to be licensed. We would be buying properties on busy main streets. We will not be buying shitty broken buildings we will be buying buildings that are just closed down and need cosmetic and electrical repairs. None will have any structural damage.
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Wants cheap
>busy main streets

Do you think anyone with a valuable property says "well that's it, place is fucked let's sell it for cheap" everyrime they lose power?
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Real estate is a very bad investment in the long run. Just look up the ' A long run house price index : The Herengracht index' from the 1620's to 2008.
The price of housing doesn't go up, it just follows inflation in the long run. Even worse because housing is a physical thing that is used it gets worn down and needs constant maintenance. You have to factor in repairs, taxes and all sorts of shit on it too.
It still might be timewise cheaper to buy than rent but that is for personal housing. You also have to pay a shitload of opportunity cost as your money is tied to servicing a mortgage and you are paying interest on that too for decades.
Financially is just much wiser to live cheap on rent, invest in things that actually produce something like pieces of companies(stocks) and then buy your apartment with a loan.
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I'm going to be buying properties at auction, these will be foreclosed properties where idiots got their business shut down. I want to reach the point were I can buy off auction from people wanting to sell, those will be the nice expensive properties.
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we will be buying buildings not just housing. buildings are better, store front buildings not apartment buildings. My brother is a real estate agent so that will help cut down on having to pay a real estate agent.
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It's only profitable if you can invest in them outright. Getting a mortgage for rental property always leads to disaster.
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We will be paying cash for everything. None will be mortgaged.
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>>1002928
I'm not saying you have a bad business idea. Just do some very careful calculations on ROI and for sale and rent of properties don't use current valuations only but some inflation adjusted long-time rolling average.
I don't know how it is in the US but in Finland at least there is no point in renovating apartments and putting them on rent because the return on investment is so bad. Only selling them is a way to make a profit but there price fluctuations can fuck you up pretty bad.
People who rent don't want to pay market rates for having new tiles, renovated kitchens and so forth when the choice is to get a cheaper flat.
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1002936 thank you for your feedback. I want to start off buying foreclosed businesses fixing them up and selling or renting. Either way makes good money in the US.
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>>1002823
If renting just don't buy big (more than 3 br)or old (<2000) houses

Is hard to find tenants for big houses not impossible but it takes time, if the house is empty you are losing money.

Old houses are a pain to maintain is not worth it.

I just bought a 3br/ 3bth house (build in 2005)in a cash auction >>1002823
95k including all the expenses, In perfect conditions, it only need yard work maybe a yard remodeling, but it is kind of big, so I'm going to ask 1.5k /month. Planning on rent it for 4/ 5 years and then sell for about 160k. Profit.
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>>1003300
What state did you find that deal in? Seems like a good buy.
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I would avoid real estate until the next market correction.

They are overvalued right now.
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Since it's on topic, I might as well ask this here.

So.. I bought a really nice house back in 2003 for only 10k and now it's worth around 120k. The thing is though, the rent is really shit. I only get 500 a month before taxes...
Should I sell and invest the money in something else or just keep? I'm really leaning to sell.
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>>1002876
That graph only shows that it's a bad idea to buy and hold real estate (housing) as a long term investment. If you rent it out at a proper price it generates revenue that can cover repairs and taxes.

The strategy of buying a house with minor defects, fixing them yourself, and then renting it out is a sound one. Just make sure to have good insurance, get good tenants, and keep repairs up and you should be fine.
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House Flipping has already come and past, ive put alot of thought into it and it very much so depends on the area you are trying to flip. Ex. House flipping boom in Las Vegas has come and gone with after the housing bubble burst. People buying shit property for 70k and flipping at 120k are having real trouble finding tenants. i see these houses sit on the market now completely redone, sitting on the market for 8+ months now.
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>>1003482
Texas to be more precise close to iah
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That is cool.
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>>1002876
>Financially is just much wiser to live cheap on rent

What you don't realize is that the interest on mortgage payments is heavily tax deductable. Assuming you're talking about RE as a personal residence, you'd be stupid to throw your money away on rent.

Also there'd be little opportunity cost if you mortgage your house and just pay a down payment
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>>1002928
look up what positive leverage is. If your monthly return is greater than your mortgage payments you will have positive leverage. Then you can use the money you didn't use to buy it outright and invest it elsewhere. This positive leverage AMPLIFIES your returns.
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Alright will do, thank you.
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