Is real estate the best investment?

Question

My wife and I have $72,000 to invest. We are considering purchasing an apartment complex with 2 to 4 units. In general is real estate the best long term invesment or are there better options? A friend of our suggested being a hard money loan lenders (to earn about 10 % a month. We thought that was careless since the principal loan agent could take off with our money at anytime. Thanks for the help.

Answer 1

Yes real estate is a great investment during just about anytime. If you look at the price of houses today as oppose to 10 years ago that in itself is proof.

I don't know what area you reside in but the best bet on the investment of real estate is called leverage. That is you put the least amount of your money into the project as possible and watch the investment appreciate.

Buying 2-4 units are a great idea. You should be able to do this about every two or three years as the rent will equal the mortgage payment by then. You will have your tenants paying your mortgage while you are increasing your net worth.

Buying 2-4 units most lenders consider this an owner occupied property and depending on your credit score you might be qualified for a 100% mortgage loan. Make the correct officer with the sellers paying closing cost you could be in with no money out of your pocket.

Keep as much of your money as you can in your savings account. Let it grow and ear interest while your 1-4 appreciate in value each year.

Then good ole Uncle Sam want to assist you in your effort to become wealthy from real estate by allowing a deduction on any and everything you do to you units to insure that they are rentable.
Even when you don't have a renter your good ole uncle will allow you to deduct the time your unit was not rented. (You should check with your tax advisor for any and all tax advise)

Since you are going into the business of land lording it would be a great idea to join the local Apartment House Association. This group will assist you or inform you where you can get a company to run credit checks for your potential renters.

They can also assist with the local customs legal laws, approximate rent to charge as well as provide rental forms and other necessary forms you will need to be successful in your new career.

Now if you think being a land lord is buying the units, getting renters and collecting rent, please find a job at Wal-Mart or Kmart, you will not be disallusioned.

Just use common sense in dealing with your potential renters, also when they become your renters. They are people and can make you or break you.

You can take a few of the risk out of renters if once you have narrowed the potential number applicants down to 2-3, make an excuse to go to their present place where they live. You can tell them that they failed to complete the application or you had a question about their credit report.

This will allow you a chance to check out how they are taking care of their place now. You need to make an excuse to get inside their place, I normally tell them I have to use the bathroom.

Don't judge them by the way you keep your place, but if it is pretty neat and no outlandish junk or other stuff on the rooms they should be good.

Now about investing in hard money loans that is not a bad idea either. You need to find a mortgage banker that need money to complete deals or rescue those that are in foreclosure. Some simply need fast cash for some reason and is willing to pay the higher interest rate for the speed in which the loan is completed.

Make sure the mortgage banker can give you some references at least 4-5 of clients he has that invest money through him. Some are looking for investors, some have them already. You don't want to be an experiment.

Make sure your name appear on the deed as a vested investor, that before the closing agent gives you a note with the amount of money borrowed, the number of years in which you gave them to pay you off as well as the interest rate. Normally 2nd trust deeds are 30/15 that is amortized for 30 years but is all due and payable in 15 years. Some can be due in 10 or 5 years depending on when you want your money back.

Most 2nds are interest only so they will not be making principal payments, they will be making interest payments, so you will get back 90-95% of your principal back.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 2

1. Property does well. It might not always be the best. In some areas property has not done well for a long time while other areas have seen very high returns.

2. Hard money lending means lending secured by real estate. Hence the person who borrows can not just skip town. Well, they can but the security for the loan is still there. Lots of ways a deal can go bad but what you were expecting is not really one of them.

3. The returns a hard money lender will make are not 10% a month. Closer to 15% a year if they keep the money working all year plus maybe some points. In some states the rate is lower or it is illegal to collect points. The laws vary by state.

Coming back to your question.

With the amount you have and the property you are suggesting it could be a good deal. There are many details so it is hard to tell. What I can tell is you are not in a very high priced area as you would not be able to buy with only $72K. In other areas that will buy you a single family home with no mortgage (all cash).

I suggest you do some more reading. Real estate investing is not for everyone. You can do very well but you have to learn how the market works and what it means to be a landlord (even if you outsource to a property management company).

See the link below.

Answer 3

Real estate is a great investment option. It can generate an ongoing income source. It can also rise in value overtime and prove a good investment in the cash value of the home or land that you buy. YOu may use it as a part of your overall strategy to begin building wealth. However, you need to be sure that you are ready to begin investing in real estate.

Many advisors warn against borrowing money to purchase investments. You should consider this before you purchase a home that you plan on renting out. The best way to do this is to save up and pay cash for the home. At the very least, you need to be able to afford the payments on the property when the property is vacant, otherwise the property may end up being a burden instead of helping to build wealth. YOu should never just rely on the rent covering your mortgage. You will have turn overs in renters, and some may not pay on time. Your credit would be damaged if you did this. It can also take years for the profit to turn profitably instead of just breaking even if you use a loan to purchase the property.

When purchasing real estate as an investment, you need to consider the cost of taxes and the way that you plan on renting it out. Often it is easy to go through a rental company and contract through them for repairs and rent collection. This takes away part of the burden of caring for your property, but it will also cost you money. When you are the landlord, you are responsible when things go wrong. A rental agency acts at the middle man and schedules repairs and deals with the tenants for you. If you do not have time to do everything your property needs done, using an agency is a good option. ......Real Estate Agent Bendigo

Answer 4

In my and most opnions, yes. But you first need to ask what determines "The Best," is it highest return, safest investment, lowest risk, quickest return. Because the best investment might be $72,000 at a roulette table on red, It will be doubled money in seconds, but comes with a big risk, Apartments might come with a lot of headache and a mild return but a great retirement plan. And stocks can be very risky but sometimes have great returns, and on the other hand mutual funds are safer but with lower returns. So you need to figuring out how long you will keep this investment and how risky you can afford to be, but over time, statistically real estate has shown to be the overall best, not always the quickest or highest return, and sometimes risky, but low risk and good return over time. Which I think has more to offer than any other form of invesment.

Answer 5

Yes Real Estate is the best choice for Investment. To earn more money than what we invest the only option is real estate investment. Plan yourself in investing and start your career. Learn the techniques and tips that are necessary to become a successful investor. It is made simple and easy with experienced staffs and real estate mentors. The only place which provides better coaching in real estate investing is Creative Success Alliance. CSA is a team of expertise in real estate investing who provide the better ideas and techniques which makes it happen.
Try it and win it in Real Estate Investing. Good luck become a profitable investor.

Answer 6

Real Estate is a great investment, just make sure you purchase property that will appreciate in value. Be careful with the hard money loans.

Answer 7

This is the better choice you have selected. Basically investor get into real estate because it is highly rewarding business. The simple formula Real Estate = Risk + Knowledge = Profit. Selecting real estate is better idea to invest but before investing, get yourself educated in real estate investment. Learn the tips, techniques and marketing positions of real estate to avoid failures and become a successful investor. Educate to lead and withstand in real estate investment.

Answer 8

In my opinion, it is. I have 4 rentals (mortgaged), and am bringing in a good profit each month. If i held on to them for the whole 30 years, whatever i sell them at, all that money is cash in pocket.

Depending on your housing market it may be better to have a mortgage. If you put all your money into that complex, that is a LOT of your own money sitting there. And if the housing market in your area flops, you will lose a ton when you sell. But if you take out a mortgage and have your tenants pay off the mortgage FOR you, its a much better return down the line. And if the market crashes, you won't have as much of your own money sitting in that complex. Hope this wasn't too confusing. Good luck

Answer 9

Yes, it's the best investment option, especially if you consider the Noida-Greate Noida expressway real estate projects. You will find numerous projects with a great future perspective.

Answer 10

Get an Attorney and report them to the Better Business Beaurea. That would be a good start. Many Blessings Medium Darcy Dee