Real Estate Investment
First time in a long time I've written a post on my site but I am going to attempt to write about a big development in my life... Real Estate Investment. Now that Bianca and I have paid off all of our debt except the house we are trying to put some of our extra income each month into various investments. Some really low risk like savings, some in 401k and we have been interested in doing something much riskier, dipping our toes into real estate.
This first house is a pretty low risk for several reasons:
#1 It's cheap, I haven't decided what I'll do about specific $ figures but for now I will just say it's cheaper than a nice car. Due to the fact that it's a foreclosure and isn't in great shape.
#2 We are teaming up with a couple of guys (50% split, 50 for them and 50 for us) both on risk and reward. Our main reason for teaming up is pretty straight forward, money. We don't want to get a loan on the property for two reasons closings costs and interest. I have done a good deal of home improvement projects and have exposure to just about any type of construction project at this point. That being said, most of them have been smaller independent projects, tile a floor, patch a wall, run some plumbing etc... Never a whole house remodel, I know I can do it but I am not sure how long it will take me. Paying cash for the house will greatly reduce the time stress, with a loan every day is costing you money. While it's also true that money tied up in the house is costing me some money. Though it's a pretty academic discussion given the interest rates on savings accounts right now. Which is where this money is currently sitting.
The other reason for teaming up with these guys is that they have some experience with home improvement projects as well. Both of them have put in some hours of work on a foreclosure in the past year and are familiar with the hard work it takes. This will give us extra bandwidth to get the work done so it's not so much on just us.
#3 It's cheap ;) At the price we think we'll get the house at we could pretty much bulldoze it and start over and still make money at the dollar per square foot price of the area.
Lots more to post later but it's geting late and I need to go pass out, hey at least I posted on here!