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Who Knows About Real Estate?

Discussion in 'BlackHat Lounge' started by SpellZ, Aug 17, 2011.

  1. SpellZ

    SpellZ Regular Member

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    I always hear real estate this, real estate that... Here is what I keep thinking about...

    Let's say you buy a single family home for $320,000.
    You put a family there for rent for $1400/month.

    It will take you 229 months (or 19 years) to get $320,000 from that house (and that is if they don't f?ck up the house royally).

    So let's say you are 30 years old of the time of purchase of that house. 20 years down the road you want to sell it.

    So you got your $320,000 from the house, plus you can probably sell it for what? $550,000? Let's say $600,000.


    So in total, you made $600,000 ... after 20 years... NOT $30,000 every year, but a one big $ in 20 years...

    ... Am I doing it right?

    If I am.. that I don't think it is worth it at all...:confused:

    I'll be 50 years old... and have half a million... Thats already too old to enjoy all the 'fun things'.

    Or going with the other route...

    Buy a condo before its done building for $200,000, sell it for $230,000 when its done building.

    There is your route for $30,000/year which seems more promising, but still a little meh..

    thoughts? opinions?
     
  2. Roparadise

    Roparadise BANNED BANNED

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    Your not always going to have people renting the home,And people in the future are going to be less likely to purchase a home,because of all the foreclosures today. So the value isn't going to go up like it used it in the past. Your also not factoring in interest and taxes as well as insurance.
     
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  3. BassTrackerBoats

    BassTrackerBoats Moderator Staff Member Moderator Jr. VIP

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    I would not buy a condo in this climate and would never buy one that is being built. When you buy a condo you have to know what kind of money the association has in reserves before you do anything.

    In many areas Condos are in declining markets and you don't want to get involved in that economic mess.

    I also would not buy a home for 320K and only get 1400 a month in rent as that is a lopsided equation.

    For 1400 a month in rent, you buy a home for no more than 180K.
     
  4. dheer

    dheer Jr. VIP Jr. VIP Premium Member

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    not sure about US real estate market but here in India we can double our money almost in less than 5 year. Here is how.

    India is a developing country and here we have lots of projects running in IT cities like Gurgaon. There just book a flat when any reputed company launches a project. We don't need to give 100% money while booking it but just a 10% of total amount then the rest of the amount goes in installment till the builder builds the whole property in a year or two. So here is the money making thing.

    Suppose we book a flat at 1000 $$ per SQ ft. and when the flat is ready for possession the same per sq ft normally doubles here so its around 1800 to 2K per sq ft. Just sell this ready to move property and invest half and enjoy the half ;) Further you can also get cheap home loans to pay installments.
     
  5. shiznewski44

    shiznewski44 Junior Member

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    If what you say is true thats absolutely nuts (assuming your talking UDS). I literally just bought a 2,200 sq ft home for 245,000. Your telling me that a 2,200 sqft home in Gurgaon would cost 4.4 million (2200x$2000)?
     
  6. dheer

    dheer Jr. VIP Jr. VIP Premium Member

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    Dude that was an example. Here we can buy under construction property @ 90$ per sq ft to 250$ per sq ft depending on the location.
     
  7. SpellZ

    SpellZ Regular Member

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    $245,000 for 2,200sqft?
    I got $490,000 for 1700sqft

    wow..:confused:
     
  8. silentthunder

    silentthunder Power Member

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    It takez research Spellz just like IM. The saying is that you make your money
    when you purchase.

    First consider the area where you intend to purchase. You need to get "comps" for similar properties
    to the one you intend to buy. Comps are comparisons and you get them from
    Property Shark and you can't get the indepth type of comps you need without
    paying for a subscription. This is an important step so you might even want to make friends with a
    broker and have them do it. They have the MLS (multiple listing service).
    If they think they might make a sale from you'll they'll give you comps for
    free.

    2nd step is get a cash flow analysis chart or software (torrent or broker) &
    determine all the expenses. People like to fudge this one so you want proof
    and a lawyer at your closing for sure. Falling in love with properties clouds
    business sense and can make you a $100,000 mistake. Sharks pimp that
    tendency. :cool:
    Houses will always appreciate over time if all these steps and an appraisal
    are done. Real Estate out-performs all other investments period for over 100 years of investment history.
    It's also a Buyer's market now so you can negotiate bargains. On average vacancy rates are 5% of
    income but check the area. Some are less and some are more.

    The key there is make first offer insultingly low and come up
    in small increments!! Straight up poker. No quarter! :p This info doesn't go for condos.

    Good Luck
     
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  9. jass11

    jass11 Elite Member

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    I second Dheer here .
    If some one buy's a place in developing city,his money would be doubled easily in 5 years.
    The only thing is you have to invest in right place.
     
  10. shiznewski44

    shiznewski44 Junior Member

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    SpellZ, i dont' think thats bad for a place in Toronto. I live in Philadelphia. Its relatively expensive here, but i'm also living right near the city line (3 blocks from the burbs). In center city here, our prices would be about the same or more then what you paid.
     
  11. Corvult

    Corvult Newbie

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    it doesn't really work in northern europe atm
     
  12. howard_hughes

    howard_hughes Elite Member

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    I'm in India and Real estate is the next hot thing and it will stay so for atleast 15 years or so.

    This year I booked a small 2 BHK flat worth $58k and the in 3 months value has already appreciated to $65k

    The construction hasn't even started :D

    By the time its built (2 years or so) it will be worth $90k atleast :)
     
  13. jass11

    jass11 Elite Member

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    yea do this with apartments near to any college/popular place
    and its the best investment in India :)
     
  14. hardybents

    hardybents Regular Member

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    Did you even run your numbers?
    320,000 with 20% down, 5.5 interest, 3000 yr property tax, with less than 20% they will require P&I @ $1500 per year, all in all you are about $1800 +/- per month. You rent @$1400 you lose 400 per month. You get a bunch a scum bags in there, they dont pay you lose $1800 per month. If you can not budget in for vacant time, damage etc and make at leasst 10% on your investment, dont do it.
    Pre-Construction used to be hot, especially in FL. Buy a pre build for 180,000 sell it for $230,000. I flipped one just like that, through Divosta..but those days are gone. Now you buy a pre construction for $180,000 and they end up selling for $135,000 after they are built. Stay away from pre-construction for this reason and others listed above. I think the best thing to invest in these days is yourself.
     
  15. ThePrincess

    ThePrincess Registered Member

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    In my city you can buy a livable home for 15k. It will need a paint job, new carpeting, but all the major stuff will be fine.

    You can then rent that home for around $500 a month

    Even, better fix it up & do some add ons and sell it for 80k & up depending on what you do.

    It all depends on what you buy and where you buy it. Buy low & then sell high within a few years.
     
  16. Roparadise

    Roparadise BANNED BANNED

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    You can buy nice sized homes for $1-3000 in detriot if our willing to fix it up.
     
  17. hispdcha

    hispdcha Regular Member

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    As a real estate agent myself, there are limited ways to make money from real estate in today's markets. One thing that is hot right now are apartment buildings and should remain so over the next 15 to 20 years. Reason? People aren't buying houses so they need some place to live. There are a lot of developers building large apartment buildings throughout the US that are making a killing as rental markets are hyper competitive.

    There are still over 15 million people who are currently behind or underwater on their mortgage. This means recovery for real estate is years off. Home prices will probably decline for another 2 to 5 years in most markets if not longer. If we can't create jobs over the next 5 years, then home prices could take 10 years to flatten. So, buying a home today is most likely not a good financial investment, more of a life investment. Not everyone wants to live in an apartment so they buy a home anyways.

    There are some places where you can buy a home for cheap as shit such as Las Vegas, Florida, Michigan, and Arizona that may be good rental properties. There are a lot of foreign investors picking these up for cash by the dozens and renting them out. Even if prices decline, if you buy enough at the prices they are at now, you can make your money back within 5-7 years on rental income and then you have 100% equity + cash flow. This seems be the smartest way to invest in real estate for the normal investor. And when I say cheap, I'm talking about foreclosures priced at $50k or less. :)

    Real estate is no longer a solid investment in America unless you can scoop up cheap homes and rent them out for a long period of time or you're a developer investing in large apartment developments. Stay away unless you're going to stick around for 20 years or you want a home to live in rather than an apartment.
     
  18. Roparadise

    Roparadise BANNED BANNED

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    best way to make money from real estate is to create a real estate listing website. if you spend what you would pay on a down payment,on blackhat tools and content,as well marketing,youd make alot more then $30,000 per year.
     
  19. Graemyx

    Graemyx Junior Member

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    The concept that many people take when wanting to rent out a home is that you buy it on credit, and you charge rent that exceeds the monthly mortgage/bills. So, while you only invested 30k, that money is being paid off while you take in additional monthly income, say you charge 1600/month and in the end you are profiting 600/month. That's an extra 600$ every month!

    The other way people do it is by flipping homes. They buy a house that is slightly run down, because of the condition they get it on the cheap. They fix up a home spending maybe a couple grand, but that couple grand that they used to fix it up adds 20,000$ in value to the home!

    One big mistake people make in real estate, is that they will buy a property and live in it themselves waiting for it to appreciate. Anything that isn't generating money, is losing money. When you are renting it out, you are generating money every month, money that goes in your hand, and is rather reliable. When you are flipping an estate, every single fix you do is adding value to the home. (contrary to popular belief, you can estimate how much value you are adding per fix through the notes in the home appraiser's appraisal breakdown.) this value is real and realizable somewhat fast depending on your area.

    Never buy a property with the intent for it only to appreciate over time. When a property just sits, it is a liability, not an asset. You are paying for the upkeep of the home, and gambling on the fact that the house will be worth more simply because "time has passed". You can't account for the economy, or just how people are feeling on any given year or decade.
     
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  20. hardybents

    hardybents Regular Member

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    Just remember this and you will be fine. You make your money when you buy it, not sell it.