How to Get Started in Real Estate

The biggest real estate questions are “How do I get started?” and “Is it really possible to make money?”

Bee and FlowerThe biggest real estate questions are “How do I get started?” and “Is it really possible to make money?”

 

The best way to get started is to [tag-tec]flip[/tag-tec]. Flipping is simply buying a property with a little something wrong with it; preferably around 25 percent under market value. Make  a few improvements and  sell  for a profit in less than a year. 

 

I know some  [tag-ice]flippers[/tag-ice] have gotten   some bad publicity over the last few years, and I think that’s a shame, because generally most [tag-cat]flippers[/tag-cat] are sincere real estate investors working very hard to add value to neighborhoods.  By and large, that’s the way many get their “big break” in the business. 

 

Here’s what you need to  keep in mind.  “A little something wrong” means just that.  Stay away from [tag-cat]properties[/tag-cat] that have more than a little something wrong with them.  You certainly don’t want surprises and you don’t want to deal with major issues like structural damages. 

 

But this is what amazed me when we  rehabbed  what has become my pride and joy property.  The day of the closing we walked in on a junk farm.  I’ll never forget that sinking feeling.  “This place is a dump” kind of stress. Can it ever look good? 

 

You know what?  It wasn’t that bad.  Paint really does make a tremendous difference.  We painted, we spruced, we got it back in shape.  And I kept it. 

 

Here’s today’s thought.  Mostly the rule is for every $1,000 you spend on painting the outside of a house, you can increase the market value by $10,000.  (That works different ways for different people and your results may vary, but that’s the general rule).  Exterior painting can bring spectacular results in many cases. 

 

We’ll cover more on flipping in future posts.  Meanwhile keep a look-out for the worst and  ugliest houses  in good neighborhoods.  There could be a lot of potential just waiting for a little smooth fresh paint. 

Can You Really Make Money with Contemporary Housing?

You’re rehabbing, remodeling, or simply working on your own home. How far can you go? Is it really smart to buck the trends, neighbors and general convention?

 

Girl Beside Fence

You’re [tag-tec]rehabbing[/tag-tec], [tag-self]remodeling[/tag-self], or simply working on your own home.  How far can you go?  Is it really smart to buck the trends, neighbors and general convention?

 

Let me say I love contemporary. I’m going through my minimalist  mod mode  about now.  I guess I’m  getting tired of Tudor  because I’ve lived in a Tudor for a long time.  But I may be the exception. Tutors are very hot in Nashville.

 

Is it really okay to  invest in the newer forms?  That  box-like simplicity that rids you of all that architectural junk from the 50’s? 

 

It depends.  Do  you really want to guarantee a profit?  Builders and [tag-ice]-rehabbers[/tag-ice] know what works  and how much they’re going to have to pay   to get it to work.  That’s why you don’t see many of them going out on a limb very often.  They’re in this business to make money, not to lose money. 

 

I wouldn’t get caught up in newness just for the sake of being different, even if I’m building my own dream [tag-cat]home[/tag-cat].  Why?  Because I’m always thinking about the future buyer.  Will it sell?  And will it sell quickly? 

 

Is it really smart to narrow down your future market?  Do you want to appeal to many buyers, or only to a few?  I definitely think that’s a no-brainer.

 

“I’m just mystified that people want the newest cell phone and the newest car and the newest gadget.  They like those things-yet much of what they live in is based in the 1950’s,” a contemporary home owner recently told the Tennessean.

 

Don’t bet on it. 

 

       

Development Tax Bucks Being Passed on to Others in TN

Man on a TightropeThere’s a new property [tag-tec]tax[/tag-tec] controversy brewing.  Now Tennessee developers have passed  their costs for new growth on to others.  Why?  High taxation is bad for business- don’t ya know?   Our governor said so once as he was courting big businesses to the state.

 

Here’s what’s happening.  Last spring a new law was passed by the General Assembly which stops counties from increasing development fees.  That only means one thing.  The developers won’t be paying for the new growth.

 

So where’s the money  going to be  coming from? 

 

You guessed it.  Us.

 

It’s not official yet, and the counties are  doing everything humanly possible to keep property taxes down, or so they claim.  But you can almost bet the kitchen sink property taxes will rise  in many TN. counties. 

 

Is it fair?  Is it right?  Isn’t it bad for our businesses?

 

Here’s my opinion.  New growth is new growth.  The new people need to pay for their services.  If new schools are needed for their children then they need to foot the bill.  Not a 77 year old retiree like Jerry Dement  who lives on a farm in Lascassas, TN.

 

Here’s the  real problem.   Costs were going up so fast, too fast.  Rutherford County, TN, one of the fastest growing counties in the southeast, was planning on raising  the development fee from $1,500 per residential housing unit to upwards of $3,000 per unit.  Folks, that’s too much, too fast.  No wonder the developers and real estate agents were in a tizzy.

 

Those of us who believe in keeping costs down and controlling spending know there’s a better way.  Dime-watching.  That’s a way of life with us.  We know how to make those dimes go as far as humanly possible.  Unfortunately,  city, state and the federal governments don’t even think in that direction, much less  practice it.

 

So what about the future? 

 

Make government accountable for each dime.  Kind of like an audit.  Exactly where is all  that money going and exactly how is it being spent?  We’re not going to get the right answers unless we start asking  and demanding the right questions.   

 

 

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The Fastest, Easiest Way to Learn Home Improvement

 

Too busy for  do-it-yourself shows, videos and books?  Want to skip the Home Depot classes?  Toliet

How do you get past the  learning curve in home improvement, which frankly, can get to be a little steep?

 

Apprenticeships.  Now you can learn on the job, from the experts, fast and efficiently, without making all the  stupid mistakes.

 

The idea is so simple, I don’t know why I hadn’t thought of it.  But it’s catching on across the country mainly because it works.    

 

Next time you’re [tag-tec]rehabbing[/tag-tec] in  one of your  rentals or your own home, ask your builder, maintenance man, plumber or carpenter if you can help.  If you can save  them time they will save you money.  But most importantly, you’ll be able to learn a new skill,  thoroughly,without extra brain hassle.

 

This is especially important if you simply want to know more of how things work. Even if you have absolutely no plans  of ever doing the work again, at least you will know the job from top to bottom and how your money is being spent.  That will cut down on scamming and cheating from less than honest maintenance people in the future.

 

However, here are two things to beware of: 

 

1. Make sure you have enough insurance to cover yourself if injury occurs.

 

2.  Know the warranties on your materials and see that they cover a non-professional installer. 

 

Here’s one more thing.  Hold the cell phone calls. Professional contractors and maintenance people are not going to stop just because you’re taking a call from little Johnny’s school nurse, or you’ve got to pick up the dog at the vet.   

 

We all know the best way to learn is by doing.  So why not do with the experts?

 

 

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Where to Find the Very Best Real Estate Advice

 

Green wave

Where do you get the very best real estate investing advice?

 

Go to the people who have done it. 

 

These are the successful investors who have a lot to teach you.

 

Where are they?

 

They don’t advertise in the phone book  so you’ll have to find them where they gather.  That’s primarily by networking, just like in  any  other business.  Real estate clubs and local real estate classes are a good place to start. 

 

If you’re looking for [tag-tec]The Donald[/tag-tec], or The Donald type with his glitz and fancy suits, you’re probably wasting your time.  These real investors are most likely, very down to earth, as we would describe them here in the south. They don’t stand out in a crowd. 

 

They’re probably driving an old jalopy you’d might be embarrassed to ride in.  They invest in properties that aren’t always  in the best neighborhoods.  And they do a lot of the work themselves, or they have their own people who can do the work for them.

 

It’s a consistent  month in month out way of creating wealth.  And it’s still very possible to do it here in this country with this market, or with just about any market. They don’t allow gloom and doom market watchers  to discourage them.   

 

We’ll be exploring the working philosophy  of these investors more in the future.  But here’s a tip for today based on  David Cook’s book “The Wall Street Journal Complete Real-Estate Investing Guidebook”.

 

It’s okay to take on real estate debt as you buy your properties. That’s the right kind of debt to have.   Make sure it’s debt you can comfortably handle.  This debt gives you leverage.  Use that leverage wisely and build your wealth one property at a time. 

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