No way were you talking too much...this is all very interesting to me...I'm trying to learn as I'm blindly figuring out how this money/credit stuff work. So any kind of ideas and information is greatly appreciated.
I was thinking about later on starting to get into buying and fixing up homes or buying and renting them out. But I think I need to get my credit up first to be able to do it.
Yes you can buy old houses. Yes you can dump money into them and work on them and fix them up. Yes you can re-sale them for a mark-up. Commonly you will 'make' 50% - 90% of how much money you spent on them.
I have known various people who have tried, this avenue. While some of them are still trying it. Yes in the end you walk away with a 'nice sum'. but had you put the same amount of money each month into a mason jar and buried it next to the tree in your backyard, and in 3 years dug them all up again, you would break even.
Have you read about what Bonnie and I have done with apartment buildings?
There is an apartment building I've had my eye on for a while. I only know about this by word of mouth. The owner is in his seventies and getting to old to want to take care of it anymore. He wants to sell for 60,000.
It does need some new windows, which I can get for 35.00 because I work in a window factory. So that wouldn't be a problem. He isn't in any hurry to sell, just wants to unload it.
So I think I need to work on my credit in order to get this going.
The house thing would probably be too much work for the profit. I would have to hire someone to do most of the work for these houses so I would not be making much.
"There is an apartment building I've had my eye on for a while. I only know about this by word of mouth. The owner is in his seventies and getting to old to want to take care of it anymore. He wants to sell for 60,000."
That is cheap, how many apartments does it have?
"It does need some new windows, which I can get for 35.00 because I work in a window factory. So that wouldn't be a problem. He isn't in any hurry to sell, just wants to unload it."
The closer you look, the more things yo will find that it needs trust me.
Also consider would this old guy settle for any kind of a living-trust kind of thing? Like buy it from him, and guarantee that he can still live there for as long as he lives, for free, king of thing. So he does not have to move. Many times older people just want someone else to do maintenance, but also a place for them to live.
"So I think I need to work on my credit in order to get this going."
That is a small loan.
"The house thing would probably be too much work for the profit. I would have to hire someone to do most of the work for these houses so I would not be making much."
Two ideas here.
House can not be done for profit? Do you mean to fix it and attempt to resale? No likely not. But that is bad form anyway. and something that I would advize against in any case.
Are you 'handy'?
You will need the services of a carpenter, a plumber and an electrician, period. No way to escape it.
If you have to hire someone to do any of these things then stop, and dont do it.
To me each of these things is easy. Any small hardware store with elderly contractors stocking the shelves will advise you on each project and tell you exactly what to do and what to look for. The BIG corporate hardware 'Wally-Worlds' will give advise, but they are rarely contractors with experience, so what they tell you is just to get you to buy from them, dont trust them.
So long as you have 3 apartments, you can make a good profit for the rest of your life, less than 3, like a duplex will keep you in the poor-house. The math just does not support doing anything with less than 3 apartments.
But fill the apartments, and walk around filling a notepad with everything that needs to be fixed. Ask the renters what THEY want fixed first [this gives them 'empowerment' and they will love you for it]. Fix one thing each month. Maybe even limit yourself to not spending anymore then $500/month on materials. Over a period of a couple years, everything is fixed and your all good.
This apartment house has about 10 apts in it...it used to be an old schoolhouse turned into apts. I know someone that used to live in them and they said that each apt is huge.
I can be handy if I need to be. My significant other can be even more handy than me at times. Although, he likes to procrastinate... :P-->
This elderly person does not live in the apt building. He has someone I work with do the maintenance for him.
Vick - you don't necessarily need a loan or credit or anything.
If you can work it out with the guy, you can set it up a number of ways.
If he is willing to have you spread the down payment over 3 or 4 years, you're golden.
You would immediately take possession, and start collecting rents, and pay the down payment out of the rents.
As soon as you hit 20% equity, there's no mortgage company that would turn you down for a mortgage and they'll give it to you at a halfway decent rate to boot.
With 10 apartments, you can hit that 20% equity in 3 years, if you keep your expenses bare-bone by fixing things yourself.
If you end up defaulting, he's not out anything - the building's still in his name until you get the mortgage.
If you decide it's a bad investment after a couple of years, you walk away, and you're not out anything because you won't have put any of your own money into it.
Deals like this are actually much more common than you would think.
If he's a bit unsure, then sweeten the deal by offering $5000 more than he's asking.
Well, I'm suggesting not dealing with a bank for the first 3 years, but the guy's in his 60's - it's a reasonable guess that he's not going to want to carry a 30 year note. Perhaps a 10 year note, however, if you offer him a decent rate of interest, say a percentage point or 2 above what he could get if he were to put the money in a CD or muni bond.
Recommended Posts
vickles
Galen,
No way were you talking too much...this is all very interesting to me...I'm trying to learn as I'm blindly figuring out how this money/credit stuff work. So any kind of ideas and information is greatly appreciated.
I was thinking about later on starting to get into buying and fixing up homes or buying and renting them out. But I think I need to get my credit up first to be able to do it.
Link to comment
Share on other sites
Galen
Vickles-
No please dont. It just does not work.
Yes you can buy old houses. Yes you can dump money into them and work on them and fix them up. Yes you can re-sale them for a mark-up. Commonly you will 'make' 50% - 90% of how much money you spent on them.
I have known various people who have tried, this avenue. While some of them are still trying it. Yes in the end you walk away with a 'nice sum'. but had you put the same amount of money each month into a mason jar and buried it next to the tree in your backyard, and in 3 years dug them all up again, you would break even.
Have you read about what Bonnie and I have done with apartment buildings?
Link to comment
Share on other sites
vickles
Yes, I've been reading along.
There is an apartment building I've had my eye on for a while. I only know about this by word of mouth. The owner is in his seventies and getting to old to want to take care of it anymore. He wants to sell for 60,000.
It does need some new windows, which I can get for 35.00 because I work in a window factory. So that wouldn't be a problem. He isn't in any hurry to sell, just wants to unload it.
So I think I need to work on my credit in order to get this going.
The house thing would probably be too much work for the profit. I would have to hire someone to do most of the work for these houses so I would not be making much.
Link to comment
Share on other sites
Galen
vickles:
"There is an apartment building I've had my eye on for a while. I only know about this by word of mouth. The owner is in his seventies and getting to old to want to take care of it anymore. He wants to sell for 60,000."
That is cheap, how many apartments does it have?
"It does need some new windows, which I can get for 35.00 because I work in a window factory. So that wouldn't be a problem. He isn't in any hurry to sell, just wants to unload it."
The closer you look, the more things yo will find that it needs trust me.
Also consider would this old guy settle for any kind of a living-trust kind of thing? Like buy it from him, and guarantee that he can still live there for as long as he lives, for free, king of thing. So he does not have to move. Many times older people just want someone else to do maintenance, but also a place for them to live.
"So I think I need to work on my credit in order to get this going."
That is a small loan.
"The house thing would probably be too much work for the profit. I would have to hire someone to do most of the work for these houses so I would not be making much."
Two ideas here.
House can not be done for profit? Do you mean to fix it and attempt to resale? No likely not. But that is bad form anyway. and something that I would advize against in any case.
Are you 'handy'?
You will need the services of a carpenter, a plumber and an electrician, period. No way to escape it.
If you have to hire someone to do any of these things then stop, and dont do it.
To me each of these things is easy. Any small hardware store with elderly contractors stocking the shelves will advise you on each project and tell you exactly what to do and what to look for. The BIG corporate hardware 'Wally-Worlds' will give advise, but they are rarely contractors with experience, so what they tell you is just to get you to buy from them, dont trust them.
So long as you have 3 apartments, you can make a good profit for the rest of your life, less than 3, like a duplex will keep you in the poor-house. The math just does not support doing anything with less than 3 apartments.
But fill the apartments, and walk around filling a notepad with everything that needs to be fixed. Ask the renters what THEY want fixed first [this gives them 'empowerment' and they will love you for it]. Fix one thing each month. Maybe even limit yourself to not spending anymore then $500/month on materials. Over a period of a couple years, everything is fixed and your all good.
:-)
Link to comment
Share on other sites
Galen
Vickles-
And?
:-)
Link to comment
Share on other sites
vickles
This apartment house has about 10 apts in it...it used to be an old schoolhouse turned into apts. I know someone that used to live in them and they said that each apt is huge.
I can be handy if I need to be. My significant other can be even more handy than me at times. Although, he likes to procrastinate...
:P-->
This elderly person does not live in the apt building. He has someone I work with do the maintenance for him.
Link to comment
Share on other sites
Steve!
Vick - you don't necessarily need a loan or credit or anything.
If you can work it out with the guy, you can set it up a number of ways.
If he is willing to have you spread the down payment over 3 or 4 years, you're golden.
You would immediately take possession, and start collecting rents, and pay the down payment out of the rents.
As soon as you hit 20% equity, there's no mortgage company that would turn you down for a mortgage and they'll give it to you at a halfway decent rate to boot.
With 10 apartments, you can hit that 20% equity in 3 years, if you keep your expenses bare-bone by fixing things yourself.
If you end up defaulting, he's not out anything - the building's still in his name until you get the mortgage.
If you decide it's a bad investment after a couple of years, you walk away, and you're not out anything because you won't have put any of your own money into it.
Deals like this are actually much more common than you would think.
If he's a bit unsure, then sweeten the deal by offering $5000 more than he's asking.
Link to comment
Share on other sites
Galen
That is still dealing with a bank though, No need to do that is there?
Unless he does not want to carry the note for you.
Link to comment
Share on other sites
Steve!
Well, I'm suggesting not dealing with a bank for the first 3 years, but the guy's in his 60's - it's a reasonable guess that he's not going to want to carry a 30 year note. Perhaps a 10 year note, however, if you offer him a decent rate of interest, say a percentage point or 2 above what he could get if he were to put the money in a CD or muni bond.
Link to comment
Share on other sites
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.