Basics of Investing

Archive for August, 2006

Question: Am i doing the real estate investment thing the right way?

in February i plan on getting my real estate licence and then invest in a cheap or forclosed property. i plan on putting a large amt of money into a house and either work on the existing apartments in it, or convert it to apartments. i am going to live in one of the apartments and fix up the other one. and then move to the other one and fix the first one. i plan on doing all the work in 2 months and then renting out both apartments. i found a house i am interested in that is $27,000 and would put about $25,000 into it. a sixty thousand dollar loan will cost me about $400 a month mortgage. (i have pretty bad credit… also a problem) by renting out both apartments i would get about $600 a peice. that should be an $800 a month profit. so do you think im chasing pipe dreams or am i being realistic? i really think i would be good at this and both my fiance and i are extremely good at home improvement so we could do most of the house ourselves. any advice would be great. thanks

Answer: Apart from mortgage payment you have to consider other things too…
Like Property taxes, insurance, maintainance, utilities, etc.
You have to also keep some money aside for big expenses which comes in 5 to 10 years like roof, windows, etc.
Also account for vacancies which will be there in any city in case your tanant moves out and to get another tanant.

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