Noobdog....I'll Address your post....
Gateruner......Then I'll address your post...
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Noobdog...Well what some people think is big money isn't big for others. I guess everyone needs a reality check at times because I always have been thinking that half a million isn't much these days even a million for that matter.
I don't like strip malls because in a bad economy businesses go under and then you could quickly find yourself into a negative cash flow situation with a strip mall. The main reason beging the property would be less leveraged because you have to usually put down around 50%. And usually theirs less units. So in some cases if just one major tenant leave you're already into a negative cash flow. The upside is like your friend said, triple net, higher cap rate in good economy, less turn over, less maintenance.
I still like apartments though because I use to think so short term. But then I started thinking I want to only buy things that one day I could hand over to my kids. So I started thinking that I'm okay with a lower cap rate if the property is always cash flowing because it's always rented regardless of the economy, which apartments tend to do.
As for mistakes...well, the biggest mistakes I feel I've made are for one, I use to own 3 buildings. I sold them thinking they were too much hassel. That set me back huge. I don't even want to think of how big a mistake tha was. Then doing stupid stuff likely buying land, and buying first mortgages. Oh man what a terrible learning experience those were. What a nightmare. I lost a lot of money. So ya whatever you do, stick with buying your own realestate. Trust me, don't do anything else. It seems like whenever you get involved in someone else's deal you give up complete control of your money. Because if they screw up, then you're usually the one left holding the bag. Well never again for me. I've already spent over $250k on that learning curve.
Well if you're just starting out, if I were you I would honestly just look at doing house flips. Like if you don't have a lot of money yet to work with. Just do house flips. In the right markets you can do extremely well. I just made 140k net/net on a property that I lived in for 6 months. Didn't do a thing to it other than add blinds to the windows. So that's what I would do if I were you to raise some capital. Good luck.
Gateruner......No I would never do a cash deal on anything. Of course you always want the highest leverage situation possible which usually equates to the highest ROI. So for that deal I was talking about I'm getting a second mortgage most likely from the vendor and I'd only have to put down 18%. I gathered out of what your saying, keep the 15, do the larger deal, then refinance the 15 to get the equity out of that to work on a third deal? Is that what you mean? Because ya that could be an idea I never really thought about. Because as we speak the price of that building is up about $450k so I have that much dead equity just sitting in it doing nothing. Maybe that's what I'll do infact. That way I can at least try to have my cake and eat it too.
So ya I find out on monday or tuesday if I got a deal on that large property so I'm just hoping it works out. I'm just really hoping things go smoothly. If so I think it would really open up a lot of opportunity for the future. I really don't want to grow too big though to be honest. I've seen some people who get more and more and more properties to the point where they have no life outside of managing their properties. I'm not going to be one of those people. However, I think with even just this one other large property I'd be more than content. At least that way I'd have something to fall back on in the unlikely event that something was to happen to my internet business. Anyway talk to you later.
