Local Real Estate Comments and Ramblings

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How just about anybody can invest in real estate.

In my recent post Should you invest in real estate? I hinted at a basic plan for just about anybody to get started investing in real estate.

Let's get started.  First of all, if you are not a home owner lets start there.  Begin today! Start saving for a small down payment and pay off any outstanding debts. Even if yo have previous credit issues you are only 1-2 years away from being able to qualify for an FHA loan. Under current FHA guidelines you can buy 2 years after a bankruptcy or 3 years after a foreclosure.  So even if you have had serious credit issues, time does a lot of healing.  The other thing that goes hand in hand with that is no late or derogatory payments in that same time frame.  If you are renting now you CAN be a homeowner in the next few months to maybe 2-3 years.

Second.  Once people become home owners they move every 7-10 years.  That's sort of average.  So here is the key.  While you are in the first home you continue to save and build your credit.  When it is time to move, do not sell your first house.  Keep it as a rental.  

Third. In another 7-10 years move out of house #2 and keep it as a rental.  You now own two rental houses plus your own residence!

Many people have done this simple process over their lifetime and built great wealth.  It is a simple process that anybody can do. Yes, this is a 20-40 year program.  So what?  Real estate by nature a long term investment.  If you treat it as a long term investment your home(s) will take very good care of you.

Note: most or at least many people do not want to deal with the land lording/ tenant issues involved with rental property.  Many people think they can deal with the but they really shouldn't.  Hire a professional property manger!  Just consider it a cost of business and an investment in your peace of mind!
 


Should you invest in real estate?


Happiness is Positive Cash Flow!

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Bob Southard
Broker - Owner  Atlas Realty Service LLC #75911

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Comment balloon 2 commentsBob Southard • June 21 2011 08:58AM

Comments

Your blog is spot on!  Real estate is not a get rich quick scheme, but a wealth builder over time.  You mentioned a key critical point: to be successful, you MUST become educated in management issues; or, hire a professional property manager to handle it for you.  The small expense of having a professional manager is more than offset with the long-term growth of the asset - both in appreciation and property condition.  This will also greatly reduce the risk and exposure for tenant-related issues.

Posted by Jim Smith, Broker,CRS,GRI,RMP,CNE,TRLP (The Property Management Company) about 7 years ago

Jim,

 

Thanks for the comment.  Some people may have the "stomach" or skill set to manage their own rentals but the fact is that tenant issues are what drive people out of investing.

 

Most people should NOT manage their own rental property even if they think they can.  Without the management hassles most people really can invest in real estate for the long haul.  Hire a good property manager and just factor it in as a cost of doing business.

Posted by Bob Southard, e-Pro - Cobb, Cherokee, North Fulton (Atlas Realty Service, LLC) about 7 years ago

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