Home | Community | Message Board

Mycohaus
This site includes paid links. Please support our sponsors.


Welcome to the Shroomery Message Board! You are experiencing a small sample of what the site has to offer. Please login or register to post messages and view our exclusive members-only content. You'll gain access to additional forums, file attachments, board customizations, encrypted private messages, and much more!

Shop: North Spore Cultivation Supplies   PhytoExtractum Kratom Powder for Sale   Bridgetown Botanicals CBD Concentrates   Unfolding Nature Unfolding Nature: Being in the Implicate Order   Kraken Kratom Red Vein Kratom

Jump to first unread post Pages: 1
OfflineDj_karma_magnet
 User Gallery

Registered: 04/03/19
Posts: 203
Last seen: 4 months, 5 days
Real estate investing
    #27891997 - 08/06/22 12:01 AM (1 year, 5 months ago)

Some background: I am a low level carpenter and a server on the side, I make ~$6000 a month after taxes ($3600 from my real job, $2400 from my side job as a waiter at a restaurant. I work mainly for sleazy rental companies and house flippers in the hood. (Edit: should mention that I was very broke for years, in massive debts which I will have paid off by the end of the year)

I’ve realized it’s possible I could break into this industry in a few years, given the right training (already underway), the money, and the right decisions, but I have so many questions. I know cash purchased houses generally go for 12% less (according to Google), but if I were to rack up 100k cash, what would be the smartest way to do this?

Do I move into the house I’m rehabbing? Do I buy a house before I start or find somewhere cheap to live (someone’s house)? What skills should I learn aside from rehab? Accounting? Realtor license? Is it practical to try to do everything? I’ve heard that rental properties give you tax write offs. What does this entail? How do I get a company to run my rental for me? Is it worth it to rent?


My eventual goal is to completely get out of the industry between the age of 45-50 with some capital (I’d like to own a strip mall with a laundromat) and live comfortable on that and a diverse investments I acquire along the way

This is a rough idea I’ve framed in my head over the past year of working as a carpenter and seeing how the industry works. I’m not a drunk or a junkie like many in the industry are and I’m very ambitious, I want to work my way to the other side of this.


I know this might not be exactly the right place to ask this but pointers on everything and anything on where to start with any of these topics is appreciated


Edited by Dj_karma_magnet (08/06/22 12:21 AM)


Extras: Filter Print Post Top
OfflinegeokillsA
∙∙∙∙☼ º¿° ☼∙∙∙∙
Male User Gallery

Registered: 05/08/01
Posts: 23,417
Loc: city of angels Flag
Last seen: 13 minutes, 37 seconds
Re: Real estate investing [Re: Dj_karma_magnet]
    #27892262 - 08/06/22 08:56 AM (1 year, 5 months ago)

I am a property manager and handle 8 units on three separate properties local to me.  I also have a separate 12 unit property across town that is under third party management because it's just too far away for me to effectively manage.  Using third party management is expensive.  You have to consider that management companies will bill you in excess of the baseline %-commission they charge, as they typically have in house contractors for simple stuff that they then turn around and bill you double what they pay them for, including getting billed for the time spent driving to the job site, then to the hardware store and back to the job site again.  I caught my management company billing almost $100 for replacing a toilet flap years ago on account of this.  I've also caught them "accidentally" billing a piece of capital equipment (recip saw) for a one-time job at my units.  In both events, I contacted them to explain why I felt those charges were inappropriate and they reversed them... but that is the sort of stuff you need to watch for if you're having someone else manage for you.

If you can manage the property yourself, you absolutely should do that... And with the "handy" experience you've picked up as a carpenter, you should definitely have a leg up on effectively managing income property.  The fact that you are getting your financial house in order by working diligently to pay off debts is another good sign that you are becoming better equipped to handle the capital-intense world of real estate.

Now for your next steps, I would suggest that finding a fixer-upper that you can live in while rehabbing is likely your smartest move.  It doubles as your residence, which will cut your capital needs because you won't need to be paying to live elsewhere.  This reduces your financial burden and gives you a bit of breathing room on your timeline.  I would further suggest that finding a multi-family fixer-upper (e.g. townhome or something with a guest house or detached structure that you can permit/modify into a separate residence), will also reduce your risk, as you can begin renting a portion of the property for sustainable income at the same time that you are living in it.  This will help familiarize you with the tasks of property management and the maintenance that comes along with it, and because you'll be on site, the maintenance should be relatively easy for you to handle at minimal cost.

You will of course need to be able to maintain a simple spreadsheet that details whatever income and expenses you have for the property, but it's simple accounting that doesn't require much if any training, more or less the same difficulty as balancing a checkbook.  Then find yourself a tax professional who can parse your accounting in order to minimize your tax bill.  Keep in mind that you will be on the hook for taxes on income you have received long after you have received it.  This will likely be quite different from being on a W-2 or being paid under the table, and you will need to maintain enough cash to pay the tax burden once that bill comes due each year.  Remember to factor in recurring costs such as property taxes, insurance premiums and utility costs when you work to determine whether a given property is a good fit for you.  Multi-family properties with separate meters for water/electric/gas are ideal, as utility costs can vary quite a bit on usage and base price fluctuation over the years, but this shouldn't be a deal breaker (about half my rental utilities are on independent/unit-specific meters).

I wouldn't suggest going for a realtor license right off the bat, unless your goal is to be in sales and you have excellent social skills / charisma.  If you just want to flip property, you can maybe go for the realtor license later on, but it shouldn't be necessary from the get go.  You can often contract an escrow and/or legal document company directly to handle a property sale on your own (I have done this for personal real estate buyouts between family).  However, I think it's much smarter to develop your first income property as a rental in conjunction as your primary residence, in order to reduce your risk and capital leverage relative to attempting to flip right off the bat.  This will take some pressure off while you learn things, so that you're not at risk of ruin if the market sours while you are rehabbing or waiting on a sale for your ROI.


--------------------

--------------------
··∙   long live the shroomery  ∙··
...π╥ ╥π...


Extras: Filter Print Post Top
OfflineDj_karma_magnet
 User Gallery

Registered: 04/03/19
Posts: 203
Last seen: 4 months, 5 days
Re: Real estate investing [Re: geokills]
    #27901474 - 08/12/22 11:18 PM (1 year, 5 months ago)

Thank you, I read this a week ago and have been reflecting on it since. Some new shit has came to light, my grandmother is old and there is a decent chance I will be living on her $350k lakefront property with her instead of sending her to a nursing home. My family wants to keep the house in the family, they’ve been talking about a rent to own to pay off the rest of her mortgage ($60k), its all up in the air right now, but if I could save my grandmas house and keep her out a nursing home, and eventually turn it into a rental, that would be ideal. The house has been in my family for almost 70 years at this point.


Extras: Filter Print Post Top
Jump to top Pages: 1

Shop: North Spore Cultivation Supplies   PhytoExtractum Kratom Powder for Sale   Bridgetown Botanicals CBD Concentrates   Unfolding Nature Unfolding Nature: Being in the Implicate Order   Kraken Kratom Red Vein Kratom


Similar ThreadsPosterViewsRepliesLast post
* Cryptocurrency: A Discussion on Bitcoin, Ethereum and Related Projects
( 1 2 3 4 ... 500 501 )
geokillsA 250,326 10,002 01/27/24 05:04 PM
by geokills
* Silver - the most concentrated short of any commodity
( 1 2 3 4 ... 25 26 )
Gorlax 9,796 518 01/12/24 11:35 AM
by gopher

Extra information
You cannot start new topics / You cannot reply to topics
HTML is disabled / BBCode is enabled
Moderator: geokills, automan
345 topic views. 1 members, 2 guests and 2 web crawlers are browsing this forum.
[ Show Images Only | Sort by Score | Print Topic ]
Search this thread:

Copyright 1997-2024 Mind Media. Some rights reserved.

Generated in 0.02 seconds spending 0.004 seconds on 12 queries.