Saturday, December 12, 2009
investment properties 2 and 3
went out a few weeks ago with my realtor and found a great deal and a property that i thought we could get done. one was a foreclosure and we made an offer that day, but we were a bit slow. it had been on the market less than a week and it was snapped up. the other property happened to be the exact same floor plan as the other, and after several rounds of negotiations, i still couldn't get the sellers to move to the where the deal would make sense for me.
Sunday, October 18, 2009
investment property #1 follow up
well, we moved too slow. after seeing investment property #1, we slept on it one night, and the following day i contacted our realtor to start putting an offer together. as she was putting it together, we came to find out that the owner had received another offer and accepted it the previous day.
i'm not too broken up about this -- we're looking for a deal and want to make sure we're comfortable buying what we buy. in so doing, we will miss out on some and we will close others. the most important thing is that when we do, that we're comfortable that we're making a sound financial decision, and not buying for the sake of buying.
i'm not too broken up about this -- we're looking for a deal and want to make sure we're comfortable buying what we buy. in so doing, we will miss out on some and we will close others. the most important thing is that when we do, that we're comfortable that we're making a sound financial decision, and not buying for the sake of buying.
Monday, October 5, 2009
investment property #1
after weeks of looking and looking, i think we finally found a "deal". over the course of the past couple weeks and dozens and dozens of house that we looked at, we saw homes that were mainly overpriced. even some that were in a terrible state of disrepair were asking for a pretty penny.
then, this sunday, everything changed. we looked at two homes, and we liked both of them! one was a foreclosure and would need a good amount of work to get it into a habitable state, but it was at least priced right. the other had been sitting on the market for a while and had just dropped the price about 12%.
this second one was in pretty good condition and had been upgraded a fair bit. and, the listing agent was offering that the seller was "motivated". we'll see just how motivated he/she is as we'll be making an offer at a discount of another 7% of the list price.
my my figures, based strictly on cash flow and making some assumptions about the cost of maintenance, occupancy rates, etc. i'm guessing that we can make about 4.5% on money that we are putting in. that's based strictly on cash flowing from rent, over the long term, even assuming that the value of the property stays put, the return actually moves to 11-12% when you take the build up in equity over the course of the mortgage.
now, i'm a novice at this, so i may be way too optimistic with my models and assumptions, but i'm going to give it a try and i'll report back on the details.
then, this sunday, everything changed. we looked at two homes, and we liked both of them! one was a foreclosure and would need a good amount of work to get it into a habitable state, but it was at least priced right. the other had been sitting on the market for a while and had just dropped the price about 12%.
this second one was in pretty good condition and had been upgraded a fair bit. and, the listing agent was offering that the seller was "motivated". we'll see just how motivated he/she is as we'll be making an offer at a discount of another 7% of the list price.
my my figures, based strictly on cash flow and making some assumptions about the cost of maintenance, occupancy rates, etc. i'm guessing that we can make about 4.5% on money that we are putting in. that's based strictly on cash flowing from rent, over the long term, even assuming that the value of the property stays put, the return actually moves to 11-12% when you take the build up in equity over the course of the mortgage.
now, i'm a novice at this, so i may be way too optimistic with my models and assumptions, but i'm going to give it a try and i'll report back on the details.
Saturday, September 12, 2009
investment properties
though the stock market has made a great run the past several months, i started looking into some other vehicles for investment these past few weeks. after running some numbers and putting everything together, i arrived at looking into purchasing some investment (rental) properties.
there are a few different approaches to investment properties, and they have both short and long term strategies. one of the most obvious is flipping, in which you buy a place, put in some remodel/rehab work increasing it's value, and put it right back on the market and pocket the profits. to me, this is -- like many short term strategies -- high in risk and potentially high in reward. this is also not my strong suit. i'd have to be able to evaluate and see potential in properties and put in time, work, and money that i think would multiply in returns.
instead, i'm looking at buying for the long term and leasing the properties out. this comes with it's own headaches, of course. you have to deal with "customers" -- in this case tenants and the problems that customers always bring. by my math, by managing the property myself (collecting rent, taking customer calls, etc.), i can flow some cash out of the deal and build equity in the property. not accounting for the fluctuating value of the property, and making some assumptions about maintenance costs, and occupancy, i figured that i could make a decent return on this investment.
we've already looked at several properties with our realtor, based strictly on cash flow analysis. most of these have needed more work than i am willing to put in. am now looking at the next tier of properties, which would flow less cash, but after fix-ups to the first, may end up flowing similar cash.
there are a few different approaches to investment properties, and they have both short and long term strategies. one of the most obvious is flipping, in which you buy a place, put in some remodel/rehab work increasing it's value, and put it right back on the market and pocket the profits. to me, this is -- like many short term strategies -- high in risk and potentially high in reward. this is also not my strong suit. i'd have to be able to evaluate and see potential in properties and put in time, work, and money that i think would multiply in returns.
instead, i'm looking at buying for the long term and leasing the properties out. this comes with it's own headaches, of course. you have to deal with "customers" -- in this case tenants and the problems that customers always bring. by my math, by managing the property myself (collecting rent, taking customer calls, etc.), i can flow some cash out of the deal and build equity in the property. not accounting for the fluctuating value of the property, and making some assumptions about maintenance costs, and occupancy, i figured that i could make a decent return on this investment.
we've already looked at several properties with our realtor, based strictly on cash flow analysis. most of these have needed more work than i am willing to put in. am now looking at the next tier of properties, which would flow less cash, but after fix-ups to the first, may end up flowing similar cash.
Thursday, March 12, 2009
emergency fund
this week has been a real killer at work. i've been getting online at about 7 each morning and doing an hour or so of work before heading into the office. i've been arriving to work at about 9 and work until 7 and then get back online at 9 and work til 12. hopefully, i'll just lock down the computer and not touch it this weekend, but it's never that easy for me.
look, i'm in IT and am used to some crunch time hours, but this time around, there's to big release or anything of that nature. just getting hit with a few requests late in the day or trying to catch up or just getting caught up in something or another. it's easy for me to fall into this routine.
so, today my boss rattled one of my direct reports. he expects that we essentially produce defect-free code. now, i certainly strive for that, but there are some things that just don't happen and i just don't know how to straighten the guy out. anyway, that led to drama with my employee about how he doesn't need to be treated like that -- and you know what? he doesn't -- and him trying to decide what to do with his future with my company. you know, it's 90% good and 10% bad here, and one day the 10% will just be bad enough to chase some folks out of here. we get this all the time -- my boss just doesn't react well to mistakes -- and one day it's going to be the day that my report walks. and then one day it'll be my turn.
and, that'll be the day that i'll walk out with no worries because i've got a well funded emergency fund. or, what i refer to on some days as a "go to hell" fund. now, you talk to 10 people about an emergency fund and you'll get 10 answers as to how much you need to keep. for me, right now, it's real easy for me to keep about a years salary in my emergency fund. why? well, where else am i going to put it? my 2% in savings and cd's is totally outperforming anything else right now.
look, i'm in IT and am used to some crunch time hours, but this time around, there's to big release or anything of that nature. just getting hit with a few requests late in the day or trying to catch up or just getting caught up in something or another. it's easy for me to fall into this routine.
so, today my boss rattled one of my direct reports. he expects that we essentially produce defect-free code. now, i certainly strive for that, but there are some things that just don't happen and i just don't know how to straighten the guy out. anyway, that led to drama with my employee about how he doesn't need to be treated like that -- and you know what? he doesn't -- and him trying to decide what to do with his future with my company. you know, it's 90% good and 10% bad here, and one day the 10% will just be bad enough to chase some folks out of here. we get this all the time -- my boss just doesn't react well to mistakes -- and one day it's going to be the day that my report walks. and then one day it'll be my turn.
and, that'll be the day that i'll walk out with no worries because i've got a well funded emergency fund. or, what i refer to on some days as a "go to hell" fund. now, you talk to 10 people about an emergency fund and you'll get 10 answers as to how much you need to keep. for me, right now, it's real easy for me to keep about a years salary in my emergency fund. why? well, where else am i going to put it? my 2% in savings and cd's is totally outperforming anything else right now.
Tuesday, January 13, 2009
financial advisor
i never thought that i would meet with any type of financial advisor or planner, but i caught up with a buddy of mine who just happens to be in that line of work today. so, over coffee and numbers out of my head, we talked about my plan in the 3-5 year timeframe, 10 year timeframe, and beyond.
i have to say that it all seemed pretty worthwhile. not only was i exchanging ideas with someone supposedly in the know, but he's in the no-fee business, which means that he gets paid by the people he refers me to. now, i know what you're thinking, he's no more than a headhunter for insurance, mutual fund, retirement, etc. companies.
well, that may be so, but i'm willing to listen. there's a couple of reasons that i believe this guy. one, my wife has known him for more than ten years and if he decides to simply make money by passing us around, we'll call his parents. two, for him to be successful, and i again believe that he is, he should be building long term relationships. there's no point in selling me something this year for a few hundred bucks profit if i'm just going to kick you to the door next year. you see, time is on his side -- if he's got clients in their 20s and 30s, chances are that he has 30-40+ years to make a little money from us year after year.
anyway, after our first meeting, he's going to build a report for us to consider where we have holes and what we can do to fill them. stay tuned.
i have to say that it all seemed pretty worthwhile. not only was i exchanging ideas with someone supposedly in the know, but he's in the no-fee business, which means that he gets paid by the people he refers me to. now, i know what you're thinking, he's no more than a headhunter for insurance, mutual fund, retirement, etc. companies.
well, that may be so, but i'm willing to listen. there's a couple of reasons that i believe this guy. one, my wife has known him for more than ten years and if he decides to simply make money by passing us around, we'll call his parents. two, for him to be successful, and i again believe that he is, he should be building long term relationships. there's no point in selling me something this year for a few hundred bucks profit if i'm just going to kick you to the door next year. you see, time is on his side -- if he's got clients in their 20s and 30s, chances are that he has 30-40+ years to make a little money from us year after year.
anyway, after our first meeting, he's going to build a report for us to consider where we have holes and what we can do to fill them. stay tuned.
Saturday, January 3, 2009
more p2p lending
so, i just signed up on the trading platform that lending club offers. this allows you to trade debt. instead of being a lender, you turn into a trader and can buy and sell debt (at discounted rates) and thereby instantly monetize your investment.
Subscribe to:
Posts (Atom)