On May 12, 8:18 pm, camg...@[EMAIL PROTECTED]
wrote:
> On May 12, 7:09 am, "brazilrealesta...@[EMAIL PROTECTED]
"
>
> <JazMar...@[EMAIL PROTECTED]
> wrote:
> > On May 11, 8:54 pm, Socrates <SocraticMeth...@[EMAIL PROTECTED]
> wrote:
>
> > > I am looking (after graduation) to consider a career in real estate.
> > > Any advice would be helpful.
> > > I am also considering (secondary interest) purchasing and renovating
> > > properties as well.
>
> > look at Brazil
>
> AA says that one drink is too many and a thousand isn't enough. Real
> estate education is the same. One great idea could make your career
> and one thousand pieces of information might not be enough.
>
> Risk Management is your most important goal at the beginning. You
> need to make at least 100 mistakes before you become experienced.
> People will lie, cheat and steal from you and you claim YOU are the
> liar, cheater and thief. So start out with low dollar/low risk deals.
> You are trying to eliminate downside, not hit homeruns. As you become
> more experienced you can do larger dollar deals and take more risk for
> more reward.
>
> Almost everything will be a learning experience at first. Actually
> read all the documents and keep copies in labeled folders. Note every
> dirty trick done to you. Soon YOU will be supplying the contracts and
> be in control of the negotiations. It really is true, every problem
> is an opportunity THE NEXT TIME. If your figured out how to solve the
> problem that is an opportunity to help someone else out (for a fee).
>
> CAP rate is the single most important metric. Learn to calculate it
> (Net Operating Income/Price).
>
> There are two kinds of income: One Time and Recurring. Learn to do
> both. When you get stuck with a dog that is bleeding you dry knowing
> how to generate recurring income to pay the debt service is very
> important.
>
> The most common One Time income is appreciation. Flippers do this as
> fast as possible. Buy and Hold owners do this as an exit strategy.
> Think hard about your exit strategy before you buy. Appreciation can
> be because you bought cheap, normal increases in price (inflation
> related) or forced appreciation such as adding a parking lot or view
> deck.
>
> Recurring income is Rent. If your CAP rate is higher than your cost
> to borrow you have the basis of a profit. If it is lower you are
> going to need big down payments to avoid negative cash flow. CAP rate
> divides by price, ROI divides by down payment and infers leverage and
> risk. You can get eye popping ROI with modest CAP rates. Be very
> careful believing ROI numbers and promises. O down payment with one
> penny of profit is infinite return on nothing, (which may only be a
> penny).
>
> Stages of Buy and Hold:
> Analyzing the deal: 1 hour
> Property Management 10 years (learn to do this so you can fix problems
> created by "professional" property managers.)
> Exit Strategy (sale) (3 months)
>
> Good Luck! and don't drink the hemlock.
Thanks for your advice. It will help me to make the decision. And, I
won't drink the hemlock, either.
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