Quote:
Originally Posted by
2Quills http:///t/396747/rush-limbaugh-the-original-american-idiot/100#post_3535636
Dilusional would be to think that there is no risk involved in realstate period. That fact that you think it's any harder to remove a someone from a property for breach of contract is a lot harder and more expensive than kicking out a renter just goes to show that you don't understand the difference between how owner financing works vs buyers with their own lender. If you did you wouldn't be arguing against it like this. Its a simple matter of filing the paperwork with the court and a small fee just like an eviction. In actuality it's hardly any different than a rental. And if you want to be nice you simply offer to let them sign in lieu of forclosure paperwork. You get you house back immediately and they get to avoid a forclosure on their credit. At that point its virtually just like a rental situation and you simply resell the house. It really is that easy.
Guess you've never dealt in rental properties. If a renter doesn't pay their rent as per the rental agreement, I have the local police escort them out, change the locks, and allow them time to come back and get their personal belongings. I don't have to take them to court because they have absolutely no rights binding to the home or property. With a mortgage, the home owner does have rights, and can keep a foreclosure in court for years if they find the right lawyer. In the mean time, you're paying a note on the house (unless you own it outright) or losing valuable revenue until you're able to complete the final foreclosure and get them out of the house. Once you do manage to get them out, you're most likely stuck with expensive renovations because your previous owners trashed the place before they left. Sure you can sue them for damages in civil court, but if they didn't have the money to pay their mortgage, you think they'll have any to pay you?
Our investors do nothing but make decisions based on numbers. We are the management company, investment, escro and mortgage companies all under one roof. This is why we're all to farmiliar with the types of profits margins you see by throwing your properties into the rental pool or paying realtors. Its the long, slow way to go before seeing any real return on your investment after you pay the mangement company. We're not bound by he same laws as agents. We don't have to sink tons of money into
.homes to sell them. The low down payments and slightly easier approval process means our houses sell themselves like hot cakes.
There's your flaw regarding making profits in real estate. Residential properties are a SMALL fraction of what I deal in. The money is in Commercial real estate. The residential real estate is too volatile. That market can crash in a moments notice. Commercial real estate values can drop as well, but if you find properties in areas that have continual growth, eventually it comes back around.
What exactly are the profit margins in owner financing? Mortgage rates have been hovering around 3% - 4% for the last 5 years. On a $200,000/30 year mortgage, you make about $120K over the life of the mortgage. I'll be dead in 30 years before I recoup all that money. I can turn around 3 or 4 properties in a few months and make that.
Low down payments and easy approval process? Ah, now I get it. You're those trolls that prey on people with poor credit ratings and screw them with inflated interest rates they can't afford. And you wonder why we had the real estate collapse years ago.
No offense but your so called secret to making millions flipping homes is highly unlikely . Possible, just not probable. The sharks in this game know that people don't get rich flipping homes like you see on tv. While you tell me the secret is to purchase, dump huge sums of money into fixing the house, sell it off and then not purchase anything again in that neighborhood for years tell me your a small fish in the game. While our investors purchase more and more homes in the same neighborhoods year after year. Our lower down payments and easier financing moves people into these vacant home which helps bring home values in those areas back up which makes the city and counties more money which is why when they walk into the office at the tax district they have no trouble getting taxes on their homes lowered. Its the big guys that dictate market values in these neighborhoods. That how the would be flippers trying to break into the industry get choked out and end up making very little money at it. Its not like how they portray it on tv.
You're the one that obviously watches those stupid real estate TV shows. "Flipping" properties is NOTHING like you see on TV. I don't dump "huge sums of money" into any properties I purchase on the cheap. I only invest in areas of the home where I can make the largest return. I can spend $6000 upgrading an outdated kitchen, and get $8000 - $10,000 in return. Put a couple thousand into a bathroom and get back $5,000. When I do purchase residential properties for this purpose, I only purchase one's in areas where the average turnaround is 30 - 90 days. I can think of maybe 3 homes in the last 5 years where I miscalculated and took a loss on the sale.
Small fish? LOLOL. OK, if you say so.
Just because you stick someone in a house doesn't increase its value or the surrounding homes in the area. Unless you do some form of renovations to improve the marketability of the property, you can't charge that much more than what you paid for it. Your statement about taxes makes no sense. So your little company brings more buyers into a neighborhood, which raises the values of the homes in the area, which in turn raises the tax rates for the cities and counties where they reside. But then the new homeowner is able to walk into those same tax districts and get their taxes reduced? Based on what? Like I told you before, the tax districts base their valuations on the average price per sq. ft. of similar homes sold in an area. If three buyers each buy their homes for $250,000, how is one of them going to get their taxes reduced by saying their valuation should be lowered?
I was actually trying to be nice and give you some tips but you seem to have it all figured out. So while I can appreciate your tips and advice for now I think ill stick to learning as much as I can from the guys who really are making fortunes in the home market.
Good luck with that. Sorry, but I don't think your "tips" are that valuable. Like I said, I've been doing this for 30+ years, and my personal bank account is a testament as to how successful I've been doing it my way.
He'll my wife alone has 13 years managing hotels in south Florida and key west, 5 years in apartment communities (were she trained rental property managers), and another two years now selling homes and managing our investors townhouse, commercial and rental houses. 
