Foreclosure in Charlotte>Question Details

D.Mac, Other/Just Looking in North Carolina

I'm a first time INVESTOR looking in North Carolina.

Asked by D.Mac, North Carolina Tue Nov 6, 2007

I have $25,000. Flipping is an option as I am an Interior Designer and have access to great resources. Or should I buy/rent/hold/sell? I can keep my money in real estate for the long haul and would like to invest the same amount every year. Help! Where do I begin? Any advice is greatly appreciated!

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Penny is right on! 20% or lower is the magic number to strive for. But first, get some good reading material. The difference between being successful and losing all your money are those who think they know it all. The Millionaire Real Estate Investor is one of the best books on the topic as it covers flipping situations and buy and hold. There's also a book by the same authors called Flip that goes into that side a bit deeper. By far, the MREI book is the best on the topic because they interviewed top investors who are making money and extracted from them the elements of what makes a great investment. I have an extra copy I'll send you if you'd like.

If you're looking to buy here in Charlotte, you've got two options. The best route for a flip property is most likely the courthouse. You can see the homes going up for auction at any given time, starting bids, and when. While you can get some great deals before they hit the market publically, 2 things: 1. will need the money in 10 days after the auction (which usually means finding a hard money lender) 2. you can't go inside the property. You must conduct your market research (critical) outside based on worst case scenarios using the local neighborhood and area to dictate the sales price.

With only $25k, your closing, carrying, and repair costs will most like eat that up very quickly. A better option may be to buy and hold. There are a lot of good deals and a some AWESOME deals out there that may work. The MREI book has a worksheet that you will need to use to determine if, after maintenance, improvements, advertising, PITI, management fees, and vacancy if you will still make a profit. This is critical since a lot of "dummies" have purchased homes they thought they could flip or rent but never took into account what things are renting for. Every month, they're either losing money with the tenant in their unit or going into foreclosure.

There are a lot of renters out there looking for a home either through relocation, displacement (foreclosure), divorce, etc. However, rents aren't really high and that's why its critical that you buy at the right price. Buying and holding at the right price will mean you will have a little gold mine you can sell in the future or tap for other flips if necessary.

Remember: You make your money in any real estate investment going in - not selling.
1 vote Thank Flag Link Tue Nov 6, 2007
Those two books that Jonathan has mentioned below are so helpful that I consult them all the time! I give them out to clients and friends. The feedback that I get from new investors to ones that have been doing this for years is just incredible.

Please do your research before giving this a try. You will defiantly need a fantastic real estate agent and a great lender on your team to help make you more successful.
0 votes Thank Flag Link Tue Nov 6, 2007
Here in Raleigh the flippers are having a tough time. Personally, I am doing the buy & hold method which is really working for me in this tough market. There are more people wanting to rent with the inventory being low. Rent prices have went up.

I always try to buy at least 20% below value. Email me if you have any questions.

Good Luck!
0 votes Thank Flag Link Tue Nov 6, 2007
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