250 K to invest in Real Estate...

[kaboshedx]

Hello,

I have 250 K I want to invest in real estate, I want to make a smart investment that will net me some long run earnings. I would also love to live somewhere warm on or within a 1 hour drive of the ocean. I want to invest in a property that is in a market that is projected to improve in the next 10 years. I am a dual Canadian and US citizen living in Canada now but I would like to live in the warmer parts of the US, maybe California.

Where do I start? I have absolutely no experience with Real Estate and want to learn how to make a smart investment. Help me?

thanks

[SurferEd]

Are you willing to take on a mortgage?

If so, I would recommend a 4-unit residential property. If you live in one of the units, you can watch over the property and deduct the hell out of it.

More than four units, and you are dealing with commercial loans.

If you are interested at all in San Diego County, let me know!

[Tien]

I would start by putting a bit of that money, maybe a few hundos into books.

Millionaire real estate investor by Gary Keller is an excellent place to start if you don't have a clue.

These 20-30$ books will save you thousands of dollars later on when you are just about to sign your name on the dotted line.

Invest in your real estate education first, it will handsome dividends.

[BradleyT]

California homes are 2-5x more expensive per sq. foot than most other places in the U.S.

A place like San Antonio TX has RE for $150/sq ft (in nice neighborhoods) compared to $400+ in San Diego.

Yahoo Real Estate shows Price per sq. foot in the listings if you want to compare.

[kaboshedx]

I will definitely invest in some education for sure, anywhere I can look for some recommended reading?

So you think a place like San Antonio would be better value with time? I guess anything on the ocean will be overpriced and have less potential for increased value...

[kaboshedx]

Surfer ED I am definitely interested in San Diego county

I am less willing right now to take on a morgage but by the time I make the purchase it could be a real possibility.

What exactly is a 4 unit residential property? Is it like a townhouse? So I would live in one of the 4, rent out the rest and deduct everything as job expenses?

[SurferEd]

Right, it's a building that has four apartments. You live in one and rent out the other three.

Upsides:
You handle any issues by walking next door.
You keep an eye on the property.
You get the Owner/Occupant capital gains deduction on sale proceeds.
You keep the mortgage expenses down compared to 5+ unit properties

Downsides:
The area won't be as nice as with single family homes in a similar price range.
Carrying costs can be stiff between tenants.
Insurance is more expensive/Your liability is greater (this is why you form an LLC).

Disclosure: Full-time San Diego County real estate agent

[riverdance]

"You get the Owner/Occupant capital gains deduction on sale proceeds."

explain further. are you saying he would get the entire 250k capital gain exclusion for all 4 units upon sale?

[SurferEd]

If sold together, yes.

[pig4bill]

You sure about that? If you rent out three units, my guess is you only get the exclusion on 1/4th of it.

[ QUOTE ]
Upsides:
You handle any issues by walking next door.

[/ QUOTE ]

Downside:
Your tenants handle any issues by walking next door.