Socrates wrote:
> 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 im****tant 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 do***ents 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 op****tunity THE NEXT TIME. If your figured out how to solve the
>> problem that is an op****tunity to help someone else out (for a fee).
>>
>> CAP rate is the single most im****tant 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
>> im****tant.
>>
>> 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.
Tough time to consider being a real estate agent.
Mitchell
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