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How can I buy,fix, and sell real estate?

Question by Andrew: How can I buy,fix, and sell real estate?
Im a single guy, no kids, no attachments. Im going to be buying my first house for 24,000 and fixing it up to live in and rent the bottom out. I enjoy working by myself and I have a wide variety of remodeling skills. Can I make a career out of this? Or should I just go the landlord route? Is there anyone with experience in real estate that could give me some advice?

Best answer:

Answer by BullRooster
My first 7ish places I bought outright, moved into them (my rule was don’t own more than you can fit in the car) and fixed them up. Then when they were fixed up I’d move to the next one and sell or rent out the one I just left. I could do owner occupant financing (and be following the rules) every so often and because I was fixing the places up I’d get them way under market value. When I needed to sell, I’d sell, and when it was more advantageous to rent (and I didn’t need the money), I’d rent. I still do this though no more moving into the houses after I buy them (my fiancee was very adamant on that point).

Anyhow, I’d just advise you to do both if you are up for it. The flips make you enough money to keep going but the long term rentals make you rich (more off appreciation than the rents themselves but the rents pay the bills and make good money eventually).

If you go this route you’d be well advised to get a real estate license. It’ll take some time and cost you but you’ll make up the cost with the first 1-2 transactions per year (since you pay reduced commissions) and you have such better access to info that you can see far more deals and thus pick the best ones. Working with a good agent is fine but can’t replace having direct access to the mls and being able to write your own contracts (many of the best places won’t accept a contract unless you are an agent).

So, do both and sell when you must, rent when you can. Also get a property manager to manage your rentals if this isn’t your thing (you ca still do the repairs) and taking out some loans is fine but make sure your cash flow (rents) easily covers all expenses.

One final word of advice, while doing this I also had a very good paying job the first 5 years or so (I eventually quit the job as the real estate was making way more money). This allowed me to get loans and buy more. I’d sure you can do it without a separate job (more flips, fewer rentals) but it’ll be harder.

Know better? Leave your own answer in the comments!

2 Responses to “How can I buy,fix, and sell real estate?”

  • godged:

    BullRooster has some sound advice.

    I will add a few things…..

    If you are going to do owner occupied flips, stay two years so you can avoid capital gains tax.

    Being a landlord brings a whole layer of issues. I am a landlord, and have been fortunate to have great tenants now, but we all end up with bad tenants, they know how to work their rights, are nightmares to deal with and make you rethink the whole landlord role. Browse through some the renting and real estate questions here, there are plenty of tenants looking for ways to get out of paying, if things are illegal, how they can sue their landlord or PM, etc..

  • Haley:

    I think it just depends on what you are trying to accomplish. Fixing up a house is quite a bit of effort in an of itself. The only real advantage to fixing up a house to sell is that once it’s sold you no longer have to deal with collecting rent, making repairs, etc. You get a larger sum of cash up front, but there is no residual money coming in. Selling isn’t a long term investment strategy. So, just decide what you want out of the deal and then pursue that avenue.

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