Originally posted by @Jill DeWit:
Hi @Derek Parsons
(Going to also add- thank you for your service!)
Now, I would start small and build a property portfolio and not take on any debt. With little $ you can get a website going (to sell what you buy), find motivated sellers, and start flipping property. Vacant land is a great place because no big issues and you can buy and sell all over the country fairly easily.
And since no debt, it is okay if a property takes a few weeks to sell. The key is really learning how to buy it right. I have been in this business for a number of years now and I still look at property the same way. Not emotional - just as an investment. If I cannot buy it so inexpensively that I can easily double my money tomorrow, I don't buy it. I just move on to the next deal.
Easy to get your phone ringing with motivated sellers once you learn how to reach them.
Hope this helps!
Jill
I disagree with this advice. I don't think its appropriate in the Charlotte market. Flips at the likely price point in our market usually don't carry a big enough profit margin to justify the risk when there are better options out there. With the amount of cash Derek has on hand he will not be able to buy an easy rental property or flip in our market. He'd also be limiting his options for the future. By expending most, if not all of his cash, it would make more difficult for him to do a deal in the future without selling his first property, which he may or may not want to or be in a position to do. What if there is a drop of in the market? Would you want to have to sell to keep going in real estate investing.
Buying with cash would be fails to recognize the resource his has in his decent credit score.
I think a better strategy would be to be to hedge your bets. Find an easy rental property or flip to ease your way into the business and build some confidence. If you qualify for conventional financing, you can lock a historically low interest rate and generate a benefit on a large asset, but with less immediate constraints on cash management. Early on conserving cash is king, generating positive cash flow is great. Never put all of your eggs in one basket in anticipate of a future sale. The market has an upward bias but is generally cyclical. With a long term loan you're cost to carry the property will be relatively low, so even if everything goes wrong, you have time to recover. With rents in Charlotte as high as they are, rentals usually do well, and if you have a flip that goes south you may be able to rent it and still do well if you have good financing terms. Also, having mortgage credit included in your credit type split may improve your credit score.
