Random real estate advice

[fucksong]

My clients almost got screwed recently so I was inspired to share some helpful tips should any of you ever want to start investing in apartments. I've had agents try to pass shit by me and had I not been burned in the past or just been fortunate to know real estate attorneys who schooled me, I would've never known what to look for. I'll keep this an ongoing thread for when I need to procrastinate at work.

1) Ppl will try to sell big buildings, malls, restaurants, etc that are vacant for hundreds of thousands of dollars, even millions, claiming you can rent it/lease it out for X number of dollars. They'll even have complicated fancy income figures based on "MARKET RENTS" This is what we call in the industry PRO-FORMA. Better to refer to it as BUYER BEWARE or BULLSHIT. First off, if the property and location was so great, why is it vacant? Maybe those market rents are actually a big jip. Maybe theres some contamination. Also, banks dont like to lend money on these deals because they dont want to be stuck owning a pile of dirt or vacant building. Now dont get me wrong. There are some cats who specialize in this type of investing but they usually have a shit load of cash to carry them over while they fix it up but for most investors, try to find EXISTING cash flow.

2) Single family houses / single units - Now if you wanna live in a certain place cuz it makes you feel happy, close to your family, close to chicks, work, whatever, fine. But as an investment they can be risky. I've heard a lot of ppl say to invest in say a house in a nice area. Either it'll go up in value and/or you can earn 10 % on your money. Here's the rub. If you have even one month of vacancy, you went from having 100 % occupancy down to 0 % occupancy, now you gotta come up out of pocket to pay the mortgage, whereas with multiple units, you can diversify the occupancy risks. Again if you have a cash emergency fund, that's fine but dont let the high return fool you. It's a higher risk so you should get a higher reward. This is how so many ppl got fucked during the subprime crisis. They couldn't ride out the negative cash flow position.

3) READ and KNOW the contract. Okay, take that back. It's a pain in the ass to read it all but remember this one word: CONTINGENCY. This will save your ass and potentially thousands of your dollars, euros, yen, bitcoins, whatever. This could also be referred to as due diligence period. It's basically your right to check out anything and everything about the property to make sure you like it. Do NOT rely on either your agent , sellers agent or seller to give you any opinion on condition of property because us in the industry dont know shit. You gotta order a termite inspector, foundation inspector, home inspector, roof inspector, etc. Even the general inspector will cover his ass by saying he isnt a specialist in this or that so f it's important to you or looks sketchy, find out who is an expert in that field and hire em to check it out. You can ask your broker but depending on how they roll, they might not give a fuck or just might not know who to ask. It's your cash on the line so you dont want to buy a piece of shit.

Ok, all I could think of for now.

---

Oh here's one more important one. Say you want to buy a building that has a restaurant or business that pays a ton of rent. You might be like, cool, but you gotta READ THE LEASES!

Real life example. There was this building who had a state government tenant in this fancy building. It was selling for like a few million bucks and had somebody invested a small portion, theyd have earned 5-10%. Decent, not great but decent for this property at the price. What was weird is they kept stalling sending over the complete lease. At the time I almost felt embarrassed to continually ask my contact to bother the owner to get the lease as nobody before me had asked or even made an issue. Well fuck me, when i finally got it, no wonder they were trying to sell it. The fucking tenant was going to leave in less than half a year. Total fucking waste of time. Had some schmuck bought that place, they would've lost at least half a mil to a million in the value alone because in commercial real estate, the value is in the leases, NOT so much the building. If some homeless dude leases out his box to google for 10 years, that box is worth more than many luxury houses in the US because of the financial strength of google.

Ok im done. Now back to watching more of Gato's stoner thread

[Dash]

For anyone looking to get into the RE game spend about a year reading Bigger Pockets. Hopefully I will have my first investment property in two years

[THECAPTAINPOWER]

Ive been researching for years but never leaped...nyc seems so over priced, although its had a great run

[Dash]

(11-13-2013, 11:29 AM)THECAPTAINPOWER Wrote: Ive been researching for years but never leaped...nyc seems so over priced, although its had a great run

Look in Jersey.

[fucksong]

Havent read bigger pockets, Whos the author?

What got me into the game was years back, I was a broke ass musician and one day an old family member fell down pretty bad. And in that split second it hit me I had to handle my business to take care of this person. It didnt help that i hated college and spent most of my time smoking weed, LSD and going to concerts and parties. So I figured if I was going to do the whole business thing, might as well shoot for the stars and do what the richest mofo I knew of, Donald Trump, did: real estate. And there was this infomercial on TV late at night by this dude Carlton Sheets who advertised No Money Down real estate programs and he would show you how he became wealthy. It also came with a money back guarantee. BOOM! That was the answer! I bought his course, xerox copied it all, returned it and got a refund.

Here's the deal on his program. Shit wont work in expensive areas like NY or CA. You gotta go to the midwest or smaller cities where house prices are cheap. Dont be afraid to look all over your state or even another state/country to find deals. It's a lot like women, it's a numbers game.

Another good book that inspired me about real estate and business in general was Robert Kiyosaki's Rich Dad Poor Dad. Some ppl have criticized it for lack of specific details but I think for beginners, it gives a nice overview of the "game" in general.

---

Oh, in case some of you didn't know, these two websites are where you can see most of the market:

http://www.realtor.com

This is actually directly linked to every MLS (multiple listing service) in the country so you can see what's available now for houses and condos. But for commercial properties like apartments, malls, industrial buildings, etc, we mostly use this:

http://www.loopnet.com

[Zoom]

Are you a real estate agent?

[THECAPTAINPOWER]

My parents made close to million on their home in brooklyn...i like jersey too, but some towns have insanely 10k+ real estate taxes.

[Dash]

Invest in Ohio, Michigan, Missouri. Can get super cheap properties there. Then hire a reputable property management company.

What I aim to do. All about finding the good deals which may or may not be in your primarily location.

[fucksong]

Any specific cities you like there Dash? How's the local job markets? Are there a ton of ppl migrating into the area? Out?

---

(11-14-2013, 02:04 AM)Zoom Wrote: Are you a real estate agent?

Used to work for several banks in US and Asia but now independent broker in a few states.

---

(11-14-2013, 02:09 AM)THECAPTAINPOWER Wrote: My parents made close to million on their home in brooklyn...i like jersey too, but some towns have insanely 10k+ real estate taxes.

In most cases, if the owner(s) have lived in the property for at least 2 of last 5 years, theres a $250k capital gains exemption for single/$500k for couple. If it's an investment property, they can 1031 exchange the property and roll over the capital gains into another investment property. Lastly, if they just want out, they can do seller financing to a potential buyer (make sure you get some skin in the deal ala 20% down payment or more) and charge 4 to 5 % interest. They can spread out the capital gains over the life of the loan.

Thats also a great way to get into the game if you have messed up credit. Find a seller willing to be the bank but just make sure the numbers still make sense. I've seen some seller finance deals that a buyer would earn 10% and others where they barely make 1 and run risk of going negative

[nayak94]

People are always thinking of investing their money in real estate, expecting a good return. Florida investment properties is definitely a better choice of giving you that freedom and yielding a better return.

[fucksong]

@nayak94 - your guys are CCIM. Respect as that is a hard designation to get. However if you're gonna make that post, give details, not just push a fund. Also, depending on your specific tax circumstance, owning a fund might not be as advantageous as owning property directly. Sometimes the tax savings alone are two to three times the actual return on investment.

Also how are they calculating their returns? On an annual basis or is the big hit at the end and then "annualized"?

Anyways, not trying to hate on your post, as truthfully, this is the last place to try and get any business but I've known some of the guys here for awhile who have given me valuable insights in other areas so wanted to share the love back.

[PlanetOzzy]

lol song dude the user just joined this month and this is their only post- stay away it's probably a scam

[jennyparsons]

Hello
I am looking for hdb singapore or small room in Regensy or Dynasty condo urgently!!
plz message me if anybody has it

[Dash]

Great article to give you and idea or blue print for building wealth quick with RE.

http://www.biggerpockets.com/renewsblog/...n-dollars/

[merrybrovo]

You will find a lot of potential in Saratoga Springs Nyc real estate market. Though it is a bit expensive but for investment purpose it is better. The market has ability to attract small and medium investors too.
You can get an idea here.