Thinking of going into real estate

[RoelofZ]

So this is my background:
19 yrs old, pro poker player, in college.
Making 20-30$k monthly only needing a small part of that.
I've played poker professionally since ive been 18 and I would really like to get into something new.
I've heard some success stories about pro players investing in real estate and renting out the apartements/houses and I think it would be something i would enjoy doing.

Are there any pitfalls to look out for? Is it easy to combo with school + poker?
I was thinking about maybe buying a small condo of around 200k and renting it out to some students.

[Tien]

It depends on what your goals are with real estate.

How much time do you want to invest in real estate?
Where do you plan to be with real estate a few years from now? Do you want to have just condos or apartment complexes?
Do you plan to manage them all yourself?
How many buildings do you plan to acquire?


Yes there are a lot of pitfalls. Real estate is not something you just walk into and make a bunch of money. There are as many pitfalls as walking into real estate as there are pitfalls starting out playing poker at 200 - 400 NL.


You are at a great age and financial situation to invest in real estate. But it really depends on what you really want to achieve long term with real estate.

[RoelofZ]

Thanks for the response!
I would like to do most things on my own, and i would love to be able to expand and get multiple condos or complexes.
I wouldnt mind spend a large amount of time on it but i also don't want to quit school.
My long term career goal is to have multiple complexes rented out.

I just wonder where and how to start. what books to read, what forums to watch etc.
Also i don't think poker is going to be the gold mine it is now in 5 years so i want to be financially independant from it as soon as possible.

Also the big differance between lets say walking in a 200/400 game would be that the avrg player must be a big winner instead of a loser.
Or am i wrong about this?

[The once and future king]

[ QUOTE ]
Thanks for the response!
I would like to do most things on my own, and i would love to be able to expand and get multiple condos or complexes.
I wouldnt mind spend a large amount of time on it but i also don't want to quit school.
My long term career goal is to have multiple complexes rented out.

I just wonder where and how to start. what books to read, what forums to watch etc.
Also i don't think poker is going to be the gold mine it is now in 5 years so i want to be financially independant from it as soon as possible.

[/ QUOTE ]

You do realise that real estate is bombing at the moment?

[RoelofZ]

In the netherlands, where i live real estate is pretty save, prizes have been going up steadily for years.
The market prizes arent going to explode or plummet here.

Also im not thinking of getting in it tomorrow but in 6-12 months.

[Fishhead24]

[ QUOTE ]
[ QUOTE ]
Thanks for the response!
I would like to do most things on my own, and i would love to be able to expand and get multiple condos or complexes.
I wouldnt mind spend a large amount of time on it but i also don't want to quit school.
My long term career goal is to have multiple complexes rented out.

I just wonder where and how to start. what books to read, what forums to watch etc.
Also i don't think poker is going to be the gold mine it is now in 5 years so i want to be financially independant from it as soon as possible.

[/ QUOTE ]

You do realise that real estate is bombing at the moment?

[/ QUOTE ]

I just had a couple friends get out of the business here in Florida. They stated their incomes dropped by 60% in the past year and thus had to move on to another career and ventures.

[black_russian]

This would have been a great idea about 8 years ago. But with your bankroll, you can probably survive the bad times and be established for the next boom?

[RoelofZ]

Im not american.
There has been a very consistent growth of house prizes in my country and it not about to go down.

[The once and future king]

[ QUOTE ]
In the netherlands, where i live real estate is pretty save, prizes have been going up steadily for years.
The market prizes arent going to explode or plummet here.

Also im not thinking of getting in it tomorrow but in 6-12 months.

[/ QUOTE ]

Lol, that is what everyone thought about the American, Spanish and Irish markets, (all now bombing) they had been going up for years and everyone got the houseprices only go up amirite mentality, which has helped in a big way to the recent storms in the markets. There has been an international credit crunch and whilst I know nothing about the specifics of the Dutch market it is allmost certain that incresing costs of borrowing will have some negative effect on it.

[Tien]

Where to start......


With your financial situation you don't have to start at the bottom of real estate like I did.

I don't know what the market in netherlands is but most concepts are similar.

I wouldn't advise buying condos and renting them out unless the your market has a high demand for such investments. The reason is, there are more costs per unit involved in purchasing a condo than there are costs per unit involved in acquiring a normal apartment complex with multiple units and renting them out.

Sure you can achieve higher rents for the condo, but overall, the apartment complex gives you more leverage. Your rents are less, but the cost per unit to acquire the apartment complex as well as the expenses per unit is much lower. Again, I don't know how Netherlands works in terms of what tenants are willing to pay for condos. But buying condos for those higher rents is not generally justified since you can be getting more returns buying multi-unit complexes as well as leverage. Condos also have a very poor resale value. 50 year old apartment complexes still sell for top dollar whereas 50 year old condos are ancient history that no one wants to even touch.


I will give you a 2 minute crash course in real estate complexes. I'll try and make it as simple as possible.


The key to being successful in real estate is buying right. Period.


If you buy a property cheap enough, your mortgage on the property will be low compared to the rents. If your mortgage is low enough, your rents will be higher than your mortgage as well as expenses and you will make money. The key is having a relatively low mortgage compared to the value of the building. You can either do this by buying them cheaply enough, or you can do this by investing a huge downpayment. If your mortgage is too high compared to the value and the rents, you will end up putting money out of your own pocket to make up the difference which is something you DON'T want to do.

All things considered, learning how to buy them cheaply >>>>>>>>>>>>&g t;> putting down a large downpayment. If you learn how to buy them cheaply, you can buy much more because your money is not tied up in large downpayments in 1 building.

Eventually the mortgages get paid down and after a certain number of years you are financially free.

That is basically apartment complexes / buy and hold in a nutshell. You are consistantly trying to find ways to increase revenue (rents), and decreasing expenses (better contractors, more efficient repairs, etc etc).



Some books to start off:
Millionaire real estate investor
The ABCs of Real Estate Investing

Some courses I bought off ebay for 200-300 bucks:
Apartment house riches by David Lindahl
Mr. Landlord by Jeffrey Taylor



This is just a general start seeing where your goals are. You are off on a good start.