24 yo , real estate purchase

[Tomcruise]

If you were me.......................................and you were looking to buy a 250k condo/fixerupper with 50k down.
Playing the interweb poker full time (2/4nl-5/10nl + donkament)...at the time of purchase how much money is the right amount to have????

Want to put down 20%?!
Have money set aside so I don't have to stress the mortgage payments/other costs?
Have money to play poker?

Net worth needed at time of purchase?

[Henry17]

I wouldn't do it for many reasons that probably don't apply to you but for me to consider doing it I'd want at least $65-75k in cash available on top of the $50k downpayment.

[Tomcruise]

[ QUOTE ]
I wouldn't do it for many reasons that probably don't apply to you but for me to consider doing it I'd want at least $65-75k in cash available on top of the $50k downpayment.

[/ QUOTE ]

Curious why you wouldn't do it? What the reasons are that prob. dont apply to me? Thnx

[James282]

I suspect his reasons are he wouldn't want to make an investment that is almost certainly going to be bad in the current market, which judging by the nature of your original post, doesn't apply to you. Making money flipping is insanely difficult in any market if you are new to it, trying to flip in this market is essentially trying to guess at a bottom.

James

[RikaKazak]

[ QUOTE ]
I suspect his reasons are he wouldn't want to make an investment that is almost certainly going to be bad in the current market, which judging by the nature of your original post, doesn't apply to you. Making money flipping is insanely difficult in any market if you are new to it, trying to flip in this market is essentially trying to guess at a bottom.

James

[/ QUOTE ]

flipping = tough...I totally agree

I TOTALLY disagree about your liberal use of the term "market".

There are tons of "markets" that are rising, and are awesome spots to fix and flip. (I'm in an awesome market myself right now)

[jaydub]

[ QUOTE ]
[ QUOTE ]
I suspect his reasons are he wouldn't want to make an investment that is almost certainly going to be bad in the current market, which judging by the nature of your original post, doesn't apply to you. Making money flipping is insanely difficult in any market if you are new to it, trying to flip in this market is essentially trying to guess at a bottom.

James

[/ QUOTE ]

flipping = tough...I totally agree

I TOTALLY disagree about your liberal use of the term "market".

There are tons of "markets" that are rising, and are awesome spots to fix and flip. (I'm in an awesome market myself right now)

[/ QUOTE ]

Which market is that? Edit: for clarity, the market in which you find your awesome deals of course.

J

[RikaKazak]

[ QUOTE ]
trying to flip in this market is essentially trying to guess at a bottom.


[/ QUOTE ]

this is the poker equvalient to = winning at online poker is basically impossible because you can't see their face and read their tells (that's seriously how silly your comment sounds in the "real estate world")

[RikaKazak]

are you playing to fix up and live in it? or fix up to sell and make a profit?

depending on how you answer it'll change my recomendation a TON!

[spex x]

[ QUOTE ]
If you were me.......................................and you were looking to buy a 250k condo/fixerupper with 50k down.
Playing the interweb poker full time (2/4nl-5/10nl + donkament)...at the time of purchase how much money is the right amount to have????

Want to put down 20%?!
Have money set aside so I don't have to stress the mortgage payments/other costs?
Have money to play poker?

Net worth needed at time of purchase?

[/ QUOTE ]

I know lots of RE investors that are profitably flipping properties all over the country. I don't really know how much real experience the others that've posted have in RE investment, but my experience is that flipping can be profitably done in just about any market - including inner city slums, and everywhere else.

Judging from your questions and the other comments that you've made, I'd guess that you arent' really trying to 'flip' the property. In order to flip a property you would have to buy a property for LESS THAN MARKET VALUE. That is the only way it can be done.

The problem with what you're talking about - buying a fixer and putting some sweat equity into it to increase its value is that there really isn't any money in it. Thats because fixers are usually NOT prices sufficiently low to compensate for the time and effort that it takes to do all the work. Young couples and naive 'investors' disagree, and point out how they fixed a property and added $50k in value. I point out to them that the only reason they pulled that off is becaue they valued the time they spent working on the house at $0. Not my idea of investing.

Young couples and naive investors, though, are stuck once they buy a fixer. You've gotta fix it to get any cash out, but you will VERY soon find that you CANNOT afford to hire a professional to do the work - it'd kill your profit. So you gotta deal with it - living in a construction zone, working full time then working on the house, arguements, stress, etc. PLUS while Bob Villa makes putting in a tile counter top look real easy, I assure you that its not - there is a steep learning curve with anything construction related.

If I were you, I'd seriously consider if the repairs are priced into the market value of the fixer. If a fixer is selling for $80k and it needs $20k worth of work, while a perfect comparable house is selling for $100k, you don't have a deal. So be careful.

[inishowen]

Tom,

I'm in the Boston area as well. My .02 is that this once red hot market has cooled to the point of being stagnant. There are tons of listings, and seemingly no buyers. Listing prices, imo, are still tied to the market of a couple of years ago and on average are still overpriced to reignite the interest in RE you need to flip something (I only hear from people that they think prices are going lower, which I know could be a contrarian indicator). Sellers have been reluctant to drop asking prices which has dramatically increased inventory. I think the theory of supply and demand would point towards an eventual decrease in average sales price in the area.

Being in the market for another investment property myself, I want this decline, if it happens, to be rather dramatic. I would guess that the odds are against you right now to flip something in the greater Boston area (unless you stole something for +15% below current market).

I wouldn't buy a condo by the way. They are usually the first to feel the real hit of a decline and the last to recover. Find a multi in an area that is in demand with the 25-35 yr old renter (Somerville, for example).

Lastly, I think there are 3 major components affecting the local market besides prices: Jobs, interest rates, heating costs. The first two are doing fine, the last is going to be a beeyotch this winter. High heating bills just might be the catalyst to bring sellers back to pricing reality.