Can REI still provide "The Good Life"?

Question

New to investing, I have questions and concerns...

1) Is it too late?

-The housing price market is rising, competition between investors has skyrocketed, and the competition will continue to increase.

2) How does one excel and stand out?

3) How do I ( no cash, decent credit, no connections ) compete with cash buyers and the big timers?

REI for me is the means to financial freedom like it is, for what I'd like to say, all of you. As much as I truly LOVE my day job, REI can provide the opportunity for lasting wealth and the opportunity to explore all this world has to offer.

Can it still be done? Let me know what you guys think!!

Richard C. · Answer

Yes it is simpler.  Prepare for advice likely to make many BP posters' heads explode.

You don't need "top deals."

Do the numbers work?  Even at the asking price?  If so, they work.  Yes. yes, "you make your money when you buy" yada, yada, yada.  But do the numbers work?  In the scenario you describe, you don't need to get a below-market deal to get started.  You're basically using leverage to control a property while it appreciates, or at worst, while you pay down the note.  If you can get a below-market deal, great.  If you cannot, that is fine.

You don't need to hit a home-run in your first at-bat in the big leagues.  A single to the gap is a great success.  And frankly, if you swing for the fences, you will more than likely strike out.

That said, if you want a better deal than you would otherwise get, make a relatively low offer on a building that has been on the market for a while, preferably in the early winter.

Richard C. · Answer

I read a story once, published in a local newsletter-type paper.  In it the author was describing the hard times his family had during the Depression when he was a boy.  About how from the age of 10, his hunting and fishing was important to keeping his family fed.  And about how his small trap-line once yielded a mink, cause for great celebration because the pelt was worth the equivalent of a weeks' wages, if there had actually been jobs at which to earn wages.

You know what the takeaway of that story is?  Even during the Great Depression, people were buying mink coats!

During the worst depression in history, people were buying garments the raw materials for which cost between 6 months and year's worth of average wages.  And enough people were doing that that the price of those raw materials remained high.

Or if you prefer a real estate analogy, the Empire State Building was begun in 1930, AFTER the stock market crashed.  And completed in 1931.

Money is made in every economic condition, in every place and every time.

Now, that said:

Do be careful.  The market IS rising, and in some areas I frankly think we are getting to bubble status again.

But no, it is not "too late."

Kyle Penland · Answer

Its never too late!  Markets will rise and fall and there will be good deals all around you if you look for them!  I'm not sure what you mean by excel and stand out?  Your work inside a home will speak for itself if you are talking about flipping homes?  You can't compete with a cash buyer...Well you can if you are willing to go way over asking sometimes...You need to set a plan, what do you want to do.  Flip or Buy and Hold or Wholesale etc...Then develop a strategy of how to get there.  Its not free, it takes time, work and dedication.  Get a second job, save every dime...You will get there if you make a plan and stick to it!  Also you can work with people who are doing it everyday...Find a mentor or a company and offer to help free of charge to learn the biz.  Just some suggestions.

Zachary Gwin · Answer

Account Closed

That's exactly what I was getting at. Thank you for the advice. Taking this time to learn, learn, and learn... and save ha.

Good luck to you! Nothing would make me happier than to see us all make some money!

Account Closed · Answer

I would say right now while the market is rising, and because it is a seller's market, take this time to sit back and learn everything you can about the REI world. Use that time to your advantage and build some credit, same all of your money, and scope out the areas you feel most comfortable investing in. It only takes one property to really get the ball rolling.

Personally, that is what I am doing. I am still in Graduate School and by the time I get out I will be able to have a stable income to support myself, my family, and pay down my debt. By the time my debt has been paid off, the housing market *should* slow down enough to where I can take a leap into it. Until then, do something small everyday towards your ultimate goal.

Zachary Gwin · Answer

There will be many heads exploding along my journey I'm sure!

But those are great points. And yet another great analogy :) That's very much the truth, it's nice to be reminded that "2 singles and a double can bring in a run" if you catch my drift.

Very much appreciated! @Richard C.

Zachary Gwin · Answer

@Richard C

Great analogy... I know there will always be money to be made... My concern is am I going to miss the best opportunity ( market value wise) to invest. Should I wait? Dive in? It's going to take me a year regardless but I want to be ready when that time comes.

Zachary Gwin · Answer

@Kyle Penland Thanks for the reply.

Let me clarify my goals and concerns a little...

I'm looking to go the house hacking route to start: save 5-7k this next year, purchase a duplex or triplex and start off there. Ideally I'd purchase the property for below market value, fix it up, "force" appreciation, and then once I'm able to I'd invest in another property while maintaining the passive income on the 1st one. "Ideally"

The better question to ask would be- How do I continue to find top deals and grow my portfolio against the cash buyers and competition? Is it simpler than I'm making it to be?

Can REI still provide "The Good Life"?

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