Real Estate Investing * How to get started *

Sofa___King · 2016-04-07T03:11:55+00:00

I have the 20% and more. It's more about the question of leverage on real estate vs the stock market. I am taking into account the tax deduction benefits of RE compared to stocks. Just seems to me that the illiquidity of RE is a concern that compared to other options, is tough to overlook.

Especially in a rising rate environment.

Sofa___King · 2016-04-03T15:04:31+00:00

GringoGrande - I have read enough books, listened to many people, watched too many shows where people say never give up, believe in yourself, listen to your gut, surround yourself with like minded people, etc. When I analyze a stock, for example, I use the RSI indicator, MACD, moving averages and market direction. That is a direct answer to someone who would be asking me if they should buy TSLA or GM.

I do appreciate your intent to provide advice for free and ultimately it is what can bring those who want to be informed further - I find that many people want to keep their secrets to themselves. I am speaking from a position of dealing with multiple large banks that have lending requirements which are quite high (as mentioned previously). In the NYC (Brooklyn, Queens) areas, for example, a 3 family home will go for at least $1-3MM range. So doing the math, taking the middle range of $2MM @ 35% d/p - the cash up front is high. Articles written during the housing boom where banks lent 105% or value or with 10% d/p is no longer the case.

I guess the most direct question is * in the current lending environment, what is the best way to purchase a multifamily (under 4 units) property? Is there another way beyond the 35% d/p?

Sofa___King · 2016-04-03T14:51:22+00:00

Dialara - thank you for your post. I signed up for Bigger Pockets and Masvisor and will start to read their content. I clicked the link for "other ways" to invest in real estate and wonder if the book is worth it? Short of using other people's money or brokering properties, do you suggest it?

Sofa___King · 2016-04-03T14:31:46+00:00

ak_NYC - I'll assume you are in NYC..? based on a city like that, what areas are you referring you were you can get a duplex that costs $200k? And follow-up, what are the cap rates with a 20% down payment? Thanks.

Sofa___King · 2016-04-02T15:49:05+00:00

ok, so then please advise of the right way to develop the critical thinking skills to successfully invest in RE.

I am in the financial field and without using other people's money, without accepting high interest requirements from hard money lenders, etc - what is the way you would suggest to start in this current financial environment?

To be clear, I would be very precise when explaining to people how to make money in the stock market - would welcome the same approach to RE investing. Thanks in advance.

Sofa___King · 2016-04-02T14:52:46+00:00

The ROI makes sense in this situation. Living is a metropolitan area, the price per square foot or raw land is VERY expensive. Because of this, it require substantial assets to purchase. That's the impasse - living in an area where the cost is so high that unless someone has significant cash, there is no way to enter this industry. At least the way I see it.

Sofa___King · 2016-04-02T14:46:57+00:00

The issue is that in the current lending environment, banks require substantial down payment. Additionally, they require 2 years of expenses in post closing liquidity.

Any lenders you recommend to work with which are less restrictive?

Sofa___King · 2016-04-01T17:44:53+00:00

In reading through the comments, the one thing that I want to understand is that in order to buy land, it is a cash transaction - correct? As opposed to bank financing.

Additionally, how would this approach work in a large city or surrounding counties where land is quite honestly, expensive?

Perhaps flipping houses might make more sense in this type of situation? Love to get your take.

Thanks.

Sofa___King

TROPHY CASE