Arebelspy,
Can you explain a bit more about Hard Money Lending and also your example of buying a mortgage on a house in Mississippi?
I'm the poster who said I wasn't handy. I'm looking for some real estate exposure that requires very little hassle/landlording. And I want to be able to do it in a market with low prices and high rental yields, but I live in a market with very high prices and low rental yields, so I'd have to do this remotely.
It sounds like you do both things: 1) directly own and manage, skip a management company, think of it as a part time job getting tenants and collecting rent, etc., and minimize any need to "be handy" by just paying contractors. Then 2) you also do some hard money lending and mortgage buying?
I'd love to hear more about the latter.
Man, some good real estate talk in the last few days, this is making me happy.
Yes, I am doing a number of things in real estate, from buy and hold landlording to rehabbing to purchasing notes to joint ventures with others. I don't do HML loans myself (simply because I'd be on the receiving end of them, if I were partnering with someone), although I do loan money for RE projects at times (not HMLs though).
I like to invest to maximize my return versus time invested. That frees me up to do what I really enjoy.
For someone in your situation, I would recommend picking the area you are interested in, and then finding a local investor. Make sure they have a proven track record, are trustworthy/dependable, know what they are talking about, etc.
A common saying in real estate is "There's no substitute for boots on the ground." That is, if you can't be there yourself, you should have someone local who knows the market and knows what they're doing.
A hard money loan is one way to do this. A joint venture (equity partnership) would be another.
Regarding the house in Mississippi, I purchased a nonperforming note. We'll foreclose, rehab the house, and sell it. Like a flip, but utilizing NPNs to get a better return (versus, say, a foreclosure, short sale, or REO).
My two biggest advantages in real estate are knowledge (I've put a LOT of hours into studying RE and various related strategies) and my Mustachianism (which gives me a high savings rate, so I can put money down, and don't have to take on more risky "no money down" stuff, and a great credit score).
If I were in the situation of less knowledge, I'd be partnering with someone with more (and indeed, have in the past), and investing with them. I'm all about finding people you can trust though, some people are less comfortable with that.
They should probably stick to REITs. More risk, less upside, but less work.