Monday, October 17, 2005

Real Estate Investment Idea

I dont feel as though I am new to the real estate investment circle. I have first hand experience on a deal or two in my day. But I am ready to jump from the Carlton Sheets class, into the baby Trump class. But how can I do this if I am always thinking so small? I have buddies that say, "If I buy a duplex for $200K and it can cash flow with +$222 a month then that is great right? Well yes and no. Listen my little friend, time is too short and more importantly valuable. So indeed you can do well with positive cash flow, after all that is the name of the investment game, but when in Las Vegas, if you play the nickel slots you will win nickels. When you play the dollar slots you win dollars. And when you own the casino, YOU JUST WIN BABY! This idea is one that I hope to get me somewheres between the dollar slots and the casino ownership.

I found a dream home, that would normally be featured on MTV cribs in Raleigh, a nice city that is growing by leaps and bounds. This is one city you dont have to worry about home price appreciation busting anytime soon, as increases for this cycle are in the single digits. But given some time, promising markets either live up to their potential or they are exposed for what they lack.

Idea: Note many details left out to quicken the story. The home is listed for $920-980K. Wow that's not too shabby huh? About 6500 sq ft, not bad. Here is a comparable.

Because we are not in Los Angeles or Boston, there is a such thing as making an offer under asking price, WHO KNEW?! For simplicity sake just say I am willing to pay 900K and the buyer is willing to accept. Now lets say the house would appraise for $960K. And the bank has no problem lending this amount. Of course you would need a cooperative seller, but why couldnt I offer to purchase the place for 960, with the stipulation the buyer makes the 1st years, mortgage payments, for simplicity sake lets say $5k for 12 months equals $60K. Of course one would need to cash or plan for the next year(s) of payments, but that is my idea of how to take a million dollar home and get paid to live there for the 1st year.

Conclusion: There is more to life, especially the life of a real estate investor outside of the big cities of San Diego, Virginia Beach, The O.C. and the big Apple. Think BIG!

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