Sloe Times
A journal of my adventures in learning and growing personally and professionallyMonday, June 27, 2005
Cart before the horse?
When learning something new it helps to have the ability to get your hands dirty and develop some experience and lessons learned. What I can't seem to wrap my head around at the moment is how to do this with real estate. I guess I have some ideas, but this seems to be one of those things I'm feeling more uncomfortable about than I should. Maybe I should try and find a good mentor that I can learn the ropes from first. Of course, not real sure where to find one of those so until I figure that out I'm on my own. So back to the first issue, how do you 'dabble' without getting in too deep to avoid permanent scaring, or staying too shallow to make the experience irrelevant?
I'm continuing to read "The Beginners Guide to Real Estate Investing" and have to admit that some of what the author is suggesting seems... suspicious. Maybe it's the paranoid eye after reading some of the material from John T. Reed (not necessarily a bad thing), but some of the strategies that are being suggested for financing home purchases seem dodgy at best. Almost makes you wonder if you have to be shady to get the "great deals" that may be out there. I think the answer is no, but I have nothing to base that on.
The idea I have in mind about how to get started can be summed up in learn how to evaluate properties. I think even that breaks down into at least two halves that are obviously complementary. The first half is evaluate condition (new, fixer-upper, etc) and value of a property. The second half of that is evaluate the investment opportunity or answer the question, "Can I make money on this thing?"
From a buy and hold perspective the last question depends on the result of the first since obviously you need to make enough rent to break even or better on the cost. Then again, for short periods of time I guess even a small loss is sustainable. On a short term hold or flip maybe the monthly income matters less since the thinking would be to rehab and sell for the new higher value.
The only thing I know for sure now is that I have a lot more questions than I have answers so I'll continue to read and keep working on a plan of attack.
I'm continuing to read "The Beginners Guide to Real Estate Investing" and have to admit that some of what the author is suggesting seems... suspicious. Maybe it's the paranoid eye after reading some of the material from John T. Reed (not necessarily a bad thing), but some of the strategies that are being suggested for financing home purchases seem dodgy at best. Almost makes you wonder if you have to be shady to get the "great deals" that may be out there. I think the answer is no, but I have nothing to base that on.
The idea I have in mind about how to get started can be summed up in learn how to evaluate properties. I think even that breaks down into at least two halves that are obviously complementary. The first half is evaluate condition (new, fixer-upper, etc) and value of a property. The second half of that is evaluate the investment opportunity or answer the question, "Can I make money on this thing?"
From a buy and hold perspective the last question depends on the result of the first since obviously you need to make enough rent to break even or better on the cost. Then again, for short periods of time I guess even a small loss is sustainable. On a short term hold or flip maybe the monthly income matters less since the thinking would be to rehab and sell for the new higher value.
The only thing I know for sure now is that I have a lot more questions than I have answers so I'll continue to read and keep working on a plan of attack.
posted by Andres Silva # 6/27/2005 02:39:00 PM 
Archives
May 2004 June 2004 July 2004 August 2004 September 2004 October 2004 November 2004 December 2004 January 2005 February 2005 March 2005 April 2005 June 2005 July 2005 August 2005
