All Forum Posts by: Troy Young

Learn your market, learn from this site, and figure out what you would like to do. You can get into a lot of debt fast or you can pay cash and move slow. You can rent and hold or flip or anything in between. Do you want to invest in commercial or residential etc. Everyone is different with how much risk they are comfortable with and everyone is different in what kind of deals they like. See what others are doing and how they are doing it well and I think you'll start to have an idea of what fits you. With your personal house when you move see what the market does and what fits you. If you are looking for cash flow you may be able to cash out and pick up a couple cheaper houses or a duplex to use as rentals with a better cash flow. If you are underwater at the time you decide to move you may need to rent it out for a while. It all depends on what you want and where the market is at the time you're ready.

Having a lot of money helps but isn't required. I love real estate because so many people and banks will loan money on real estate. I usually just pay a couple thousand per house or multi family building and get the rest financed. If you can use a bank it is usually cheaper interest than a hard money lender but if the deal is good enough paying a higher interest rate can get you started if you aren't able to get a loan from a bank or to cover the difference between the price and the amount the bank will loan you. Most areas there are places for sale by owner or even land contracts listed by realtors. You may be able to find an owner that will finance the sale until you are able to get a bank to finance the property. Sometimes you can avoid a high down payment by taking a place "as is" and spending money fixing it up. You may be able to use a credit card to fix it up and either flip it or have a tenant paying off the credit card by the time the bill comes around. There are many things you can do to increase the value without spending much money. There are tons of options so keep learning and looking for different options and you will be able to find a way to make it work rather you have $100 or $100,000.

There isn't a set answer that will fit every case. In general I agree that in the past 5 years the housing market has been going up and the PM market has been on a huge decline so getting in now it could make sense to get into the PM market and hope in a couple years you'll have bought enough at the low's and then see an increase in PM value while at the same time seeing a possible decline in the housing market. But I'm able to buy a lot of real estate with little or no money down that gives me a positive cash flow. I do invest my own money in PM at times but it's more of an emergency fund (with some extra if they do take off and the housing market declines). With any investment keep learning about it and look for good deals and you may be able to invest some in PM while also finding some great, no to low money down, real estate investments in the mean time.

I bought my first condo just over a month ago. I'm not sure if even 1/3rd of the units are owner occupied. I use a smaller bank for most of my financing and they didn't have any problem financing it but still required me to pay for an appraisal and have 25% down just as they do with the other houses that I buy. So far I love the condo as an investment and already let the management company know that I'm interested in buying others if any come up. If interested here are the numbers on my deal: 2 bed 1 bath newly renovated condo on the water, purchased for $20k (15k financed at 4% int.) I rented it out right away without doing any work to it for $650 a month with a $650 security deposit. The taxes and insurance combined are about $100 a month, the housing association fees are $175 a month (includes some insurance, water, trash, repairs/upkeep from the walls out etc.)  The interest I'm paying is $50 a month so my total costs are $325 and my cash flow is $325 a month. Everything was recently renovated so I'm not expecting for much for repairs anytime soon.

Detroit can be a hard market as you are learning. It can have a lot of potential but also a lot of risk. I recommend talking to Joe Villeneuve. He'll have some great advice and connections. 

I have been on both ends of owner financing and it does have pros and cons. If you can get a loan through a bank it may be a bit safer and come with a lower interest rate. I also have a hard time saving money but I am very good at investing the money in real estate rather than just on myself. Buying property can be a forced investment or savings plan in a way because you have to make the payments and continue to gain equity in the property as you do. I would recommend doing a 5-10 year pay off if possible to gain equity faster and not have to worry about making those payments in 20 years. 

Depending on many variables... property can loose value, hold value or gain value in the USA and most places. In general if you make a good buy and manage it well you will make money and it will also increase in value at the same time. 

If you are buying through owner financing make sure to read the contract carefully. Some will allow you to lease the property to others or even finance the sale of it to someone else while others do not allow this. You do have that option but not with everyone. 

If you buy a lot of land or any other type of property you usually have to hold it for a while to gain appreciation in value unless you do something to increase the value yourself (or if someone else develops the land next to it). It would be rare to find an owner that would finance the land for you at a price you could just put on the market and make a lot of money on in the near future. They would just put it on the market themselves and get more $ now rather than less later. 

Why are you looking to invest in the USA? It may be easier to at least start in your home town and learn from that before investing in a country so far away. 

I started with SFH in the city where I lived because it was the easiest step for me. I now have investments in other cities and in multi family, commercial, and vacant land. I think it is wise to start small and close to home and to continue to do so until you have the resources to expand into other areas. It's hard to be an expert in every area at the beginning but if you focus on one area and have a good cash flow you may be able to slowly try other areas of investing. I find it fun to learn other areas and to be able to try bigger and better investments. If I didn't have the money to loose or the cash flow to bail myself out if I make a mistake in a new area it would be more stressful rather than a fun learning experience. It is possible to make tons of money in any area of real estate investing if you take the time to learn and work at it. The same can apply to pretty much every other area of investing outside of real estate also. Do what you are drawn to and evolve into new areas that interest you as you go.

I love $30k and under but like a few in better areas for a bit more also. I just signed a purchase agreement on a triplex for $19,000. The two smaller units are currently rented, tenants said they are happy and don't have anything they want me to fix. The third unit was recently renovated and is the biggest of the three. It also has a basement and storage area as a bonus. I'll slowly raise rents on the 2 current tenants and start the empty unit at $500-550 a month (so it will get to $1500 a month total soon). One of my favorite houses I bought for $8,500 next door to where I was living. A friend rented it from me, I tried to sell different times for $15,000 but he wasn't interested. He rented for almost 5 years which covered all my expenses plus thousands in the bank. When he moved I had it sold it for $25,000 within a few hours. A lot depends on the area but I'm able to buy decent houses for $30k or less and still find decent tenants, in some areas that mix doesn't exist.   

Flint is a hard market. Especially if you don't live there. Unless you or a friend will be living in or by the place you buy I can't recommend buying in Flint or Detroit no matter how cheap the houses are. My dad had about 30 there he was selling, most to one guy. When they stopped paying, we fixed them up but those that were occupied we never got a dime from the tenant and those that weren't would get broken into and a couple burned down right away. My dad tried giving them away after spending over $250k and couldn't find people to take them over for free. If you do invest there be careful and I hope you do well. it would be nice to see that place cleaned up. 

With a house that cheap and needing so much work just make sure it's worth putting so much money into it. There are some markets where a house needs $30k worth of work and when done it would only be worth $30k. If it should be selling for $80k fixed up then you have a nice margin to work with and 30-40k should go a long way on a small house.