Author Topic: Getting tips/advice for newbie wanting to get into real estate  (Read 1701 times)

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Wanting to get into maybe investing in a duplex, I'm just not entirely sure how to do this and wondering if I could get some tips from you guys that are already landlording. A couple things I'm fairly certain on are that I want to stick to around the $100k price range (I just don't have that much to invest) and I think I'll set up an LLC for it. I'm thinking the $100k price range because I will have close to that by years end and I plan to put that amount in vangaurd to invest it. Then use the rentals to pay off the mortgage. I know I won't get any returns on it while the renters are paying off mortgage, but I prefer to let money build using funds and not have it tied up in a duplex. And if there are no renters/they fall behind, I can sell some off to cover the expensive/mortgage for that month. At least with the mortgage rates so low, I figured I could at least break even putting money in funds too but always have it on hand to buy off the duplex if I ever needed too. The LLC thing was just advice I was given and I saw nothing wrong with it.

What I'm having trouble with is finding a duplex to buy. I just don't know what to look for, where to find it. I know it isn't the best place, but I've been looking on craigslist just to see what kind of things are out on market. I know the good pickings most likely won't be listed on there. But for a ballpark idea on price range/rent range I thought it wasn't too bad.

Also do you think my buying range $100k is reasonable for a duplex? At least here in KC, it looks fairly reasonable for the market here but I wasn't quite sure. If that's the price point, I think I'd price the rent in the $800-900 range. That should net me around $1k with both sides and pay off the mortgage with the little extra also on the mortgage as well (calculating to have the duplex paid off in around 10-12 years). Is this a fair plan for me? I mean to be tied up in a duplex with no returns (but also no expenses that I can see). And all this time the $100k that I would have been using to buy the duplex would be gaining returns in vanguard for me. So it's a trade off of having vanguard pay me or renters, and I prefer at least for time being to have vanguard do it for me so I have the option to sell for cash if I find myself needing money.

Is this plan one that people would advise? Or is the buying outright the better option?

PS: I plan on having a property manager for this, do they find the renters and set rent price as well? I'd prefer if they did so I can be a long distance landlord (I'm planning on moving in a few years to be with family)
« Last Edit: May 14, 2013, 01:15:12 AM by eyem »

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Re: Getting tips/advice for newbie wanting to get into real estate
« Reply #1 on: May 14, 2013, 08:08:15 AM »
Diversifying between paper assets and real estate can be very beneficial, but done wrong, it can bankrupt you.  You have the makings of a good idea, but you don't yet have the knowledge to put your idea into practice.  In your shoes, I would get Arebelspy's list of books to read, join the local real estate investors association, and continue to save.

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Re: Getting tips/advice for newbie wanting to get into real estate
« Reply #2 on: May 14, 2013, 10:17:18 AM »
hm save how much? I was thinking I needed a equivalent amount of cash invested as what the mortgage would be, so in the event that I ever needed to pay it off, I can do it right away.

I'll look into that list. I'll take some time to read about it, but I'll make it through. Problem is I work nights and most of the meetings around here are when I'm asleep :S I know I could make due with lack of sleep so I'm a wussypants about my sleep