Quote from @Zac Kucharek:
Quote from @James Hamling:
@Zac Kucharek your missing the forest for the trees.
What other "investment" can you get using 96.5% someone else's money? And get to keep 100% of the profits?
What would happen if you go for stocks, and open a margin account and go as max leverage as possible? Yeah, it's going to cost you dearly.
Your getting "buy a paycheck" mixed up with "buying an investment". An investment turns-into a paycheck, with time, care, strategy and effort. It is not so simple as just pulling up the MLS, buying some place and "shazam" you have a healthy monthly pay-check.
I started REI in the depths of the '08' panic, 1st hand knowledge, NO people were NOT swooping up properties then saying how it would all bounce back up, no they were not. I was a contrarian, everyone and I do mean EVERYONE said I was crazy and was going to loose my shirt. Only after I had done half a dozen flips did people start to say they couldn't understand how "lucky" I was. There was no luck involved.
The herd NEVER grasps the investment opportunity, such is life, the 20/80 rule. You will NOT find profit in the 80%. It's a life in the minority, away from the herd, going the opposite direction, being a "rebel", or as we call it the 20%. And truth is today it's more the 10/90 rule, if not 5/95.
A Real Estate Investment, done correctly will have components of: Cash-flow, depreciation, equitable gains, market appreciation and forced-appreciation. Rents will not sit static, they will incline with appreciation.
So Zac, your looking at just 1 factor, 1 alone, of this entire recipe. Try making a cake with only 1 of the ingredients.
And your looking at FHA O.O. finance for entry, that's house-hacking, it's not buying a paycheck it's about being scrappy to "get-in".
Hey that is a great sound answer and I appreciate your input and experience weighing in. I certainly don't think I need something to cash flow in any healthy way right off the bat. Not my expectation! But I had certainly hoped upon moving out that there would be some form of at least breaking even after expenses? But many responses are sounding that is like finding a unicorn now?
I wouldn't necessarily go that far as to saying it's a "unicorn" of a find, but it's definently not going to be readily, obviously, available. What I mean by "obviously" is for example listed on the MLS, just very straight line "obvious" performer.
There is still opportunity out there in the "non-obvious" manner. For example, a value-add. Or, how about a conversion property, some large, usually older property, needing rehab, that could be converted to a duplex. Now, when I say duplex, please ALWAYS strive for sideXside because up-downs don't perform half as well as sideXsides, but if gotta do a up-down focus to keep it main floor and 2nd level vs main and basement.
Or, could do something new-built. There is duplex options out there, where each unit is being sold but with the right negotiator, could get something put together as a package deal possibly, someway somehow wrapped back under 1 PID. Not saying it will be easy or "obvious" but point is, for the scrappy, there is options.
Done right, yes, 100%, it should absolutely be cash-flowing at move out and fully leasing and if on analysis don't see that exit, than it's yet another over-priced BS scam of a "deal" trying to take advantage of the "gold-rush" too house-hacks. Retail agents have learned this, they don't care about a person business after "a" transaction, there with tunnel vision of getting that 1 next sale.
Keep this in mind, whenever considering what an "agent" is pumping as a "good buy". Are they an Agent or a Broker? That's indicator #1 of there knowledge and experience level. It's not a certainty, but a potential red-flag because in general, agents have the experience and knowledge sub-Broker status, which is actually not all that high a bar to get over. Next, what do they specialize in? Do they specialize in anything? A generalist only has general knowledge, at best. You gotta be able to read if it's a one time deal being sold, or if trying to earn you as a forever client. i know, you'd think most would go for forever, it's actually rare to be honest, because of the work it takes, and the accountability on performance.
Your getting a lot of feedback, which is great, but rather being blindly swayed by it, any of it mine included, next you gotta do your research to decide who's feedback and opinions matter, and who's is just chatter.
Finding good deals is hard work, it really is. It sounds easy in books and what-not but once at it, it's hard work right. That's where most stop, don't, don't be the 80%, work HARDER, fail-UP, the hardest one is the first one, it is. Second is also hard as hell BUT it's just a bit easier than the first. And that's where you can experience each will get that bit easier. Again, this is the 1st, expect it to be brutally hard, if doing it right. Don't give in just dig deeper and work harder, smarter, push through it, it's worth it, it really is.
