do any of you guys have to worry about helping your parents out?
We were lucky enough to find a house in the same neighborhood as my mother in law, as she has a similar situation to your mother. It is good to know she can stay in her house as she gets older(very independent), and we can help each other in all kinds of ways day to day. Luckily for all of us, my wife is smart about money and has been that way for years. Most of us in our late 30s are starting to look at taking care of aging parents, while many of the young bucks still see their folks as an ATM.
do any of you guys have to worry about helping your parents out?
We were lucky enough to find a house in the same neighborhood as my mother in law, as she has a similar situation to your mother. It is good to know she can stay in her house as she gets older(very independent), and we can help each other in all kinds of ways day to day. Luckily for all of us, my wife is smart about money and has been that way for years. Most of us in our late 30s are starting to look at taking care of aging parents, while many of the young bucks still see their folks as an ATM.
My father has been disabled for a long time. My grandmother helped him through the worst of it and at this point she is 93 and they live together and help each other with everything. I definnetly worry about how he will get by when she passes. He has become more independent in the past several years and has been good about saving money. I know it will be a really tough transition though.
Take it from someone who grew up with parents who didn't make a lot of money at their jobs
My parents were acquiring property in late 70s when interest rates were over 15%.
Plaese to explain how people who didn't make a lot of money at their jobs go about "aquiring property".
1) My parents were incredibly disciplined in their spending habits. They did not take vacations, except with their kids. I honestly can't remember my father buying himself much of anything except the occasional piece of horrible silver jewelry (it was the 70s) or a record or two. They shopped smart for our necessities, drove unfancy cars. Over time they were able to save a small nest egg. They took that money and started investing in property. First a duplex, then a four unit building and then larger. Now that I run the business I follow much the same principles. I drive a beat up 1989 Ford Ranger without a functioning radio. I could afford a much nicer ride but I don't have one. Why? Cause I spent $3500 on my rig, it runs great and gets the job done. I figure I have saved at least $20k over most of the contractor/developers I run with. That's 20k I have to invest. Every penny counts. You'd be surprised where most of your money goes when you don't pay attention.
2) To save money on those investments my parents did most of the maintenance work themselves. When I was 10 I was already pulling weeds and helping clean up apts. All of the profits from those ventures went back into the buildings to make them more valuable and desirable. We tend(ed) to get better tenants because we have top shelf properties. Better tenants=less work=less wear and tear=greater profit=more investments. That's how we roll. I also learned to manage money when I was young. I got paid to work and had a savings account. I had to pay for part of my camps growing up, etc. I didn't always love it but I learned to respect a dollar.
3) Investing in real estate is like having another job. When you first start out you will work very hard but it will get easier as time goes on.
4) Look to build partnerships. For example, eventually, my grandparents saw how well my parents were doing and invested with them in even more real estate. Everybody came out ahead on the deal.
5) The end result is my mom is set for life. I have a terrific gig where I work with my family doing cool and interesting things every day. I have time and resources to work as activist in my community. On top of that I work from home so I see my kids a lot. So does my brother and my mother.
I hope this answers your question.
I hear you and I know folks who have done this very successfully....but they all had either capital or colatteral that allowed them to get started.
When my partner in Rockadelic passed away he had six $500K+ properties that he rented and he was in his mid-30's.
As you encourage people to invest in real estate today, how much money or equity would you say you need to make that initial investment??
I think it depends on where you are trying to invest. In a place like Portland, where I live. You could reasonably get into something for 30-50k, especially if you're willing to invest further out. If I were just starting out here, I would probably look at Salem or Albany, where houses are still a lot cheaper. If you could cash flow on a property there, for 20k say, you're in business.
Of course having cash or collateral always helps. But many of the dudes who make it start with almost nothing. I'm not saying that everyone can put together a down payment on the order of 50k. But a lot more people could if they looked at where there money was going. A couple of years ago my mom had some twentysomething clients, a brother and sister who were waiters. They saved all their tips and invested in property. They made a serious killing but they lived close to the bone for a long time. I have lots of friends who bought cheap in PDX 15 years ago. They have hundreds of thousands in equity just sitting around that they could be using to finance investment but they are too afraid or don't want to work enough to reap the rewards. These guys are crazy. Think about it 150k loaned at 5.25% percent. That's like stealing if you make a good buy. For example, if you took that 100k and bought a house for 350k that you were able to cash flow it, which you could easily do with a 250k mortgage in the Portland market, your return on investment, assuming an average 5% growth in value of property [historical standard], you'd be making between 14-18% on your money. That just crushes the stock market.
My point is that most people don't really understand how good real estate can be, especially if they start young.
I think it depends on where you are trying to invest. In a place like Portland, where I live. You could reasonably get into something for 30-50k, especially if you're willing to invest further out. If I were just starting out here, I would probably look at Salem or Albany, where houses are still a lot cheaper. If you could cash flow on a property there, for 20k say, you're in business.
Of course having cash or collateral always helps. But many of the dudes who make it start with almost nothing. I'm not saying that everyone can put together a down payment on the order of 50k. But a lot more people could if they looked at where there money was going. A couple of years ago my mom had some twentysomething clients, a brother and sister who were waiters. They saved all their tips and invested in property. They made a serious killing but they lived close to the bone for a long time. I have lots of friends who bought cheap in PDX 15 years ago. They have hundreds of thousands in equity just sitting around that they could be using to finance investment but they are too afraid or don't want to work enough to reap the rewards. These guys are crazy. Think about it 150k loaned at 5.25% percent. That's like stealing if you make a good buy. For example, if you took that 100k and bought a house for 350k that you were able to cash flow it, which you could easily do with a 250k mortgage in the Portland market, your return on investment, assuming an average 5% growth in value of property [historical standard], you'd be making between 14-18% on your money. That just crushes the stock market.
My point is that most people don't really understand how good real estate can be, especially if they start young.
I definitely agree.....hard work, disciplined money management and knowing the market are the keys.
But for every success story, there are plenty of failures by people not capable/willing to adhere to the above guidelines.
Comments
We were lucky enough to find a house in the same neighborhood as my mother in law, as she has a similar situation to your mother. It is good to know she can stay in her house as she gets older(very independent), and we can help each other in all kinds of ways day to day. Luckily for all of us, my wife is smart about money and has been that way for years. Most of us in our late 30s are starting to look at taking care of aging parents, while many of the young bucks still see their folks as an ATM.
My father has been disabled for a long time. My grandmother helped him through the worst of it and at this point she is 93 and they live together and help each other with everything. I definnetly worry about how he will get by when she passes. He has become more independent in the past several years and has been good about saving money. I know it will be a really tough transition though.
I hear you and I know folks who have done this very successfully....but they all had either capital or colatteral that allowed them to get started.
When my partner in Rockadelic passed away he had six $500K+ properties that he rented and he was in his mid-30's.
As you encourage people to invest in real estate today, how much money or equity would you say you need to make that initial investment??
Of course having cash or collateral always helps. But many of the dudes who make it start with almost nothing. I'm not saying that everyone can put together a down payment on the order of 50k. But a lot more people could if they looked at where there money was going. A couple of years ago my mom had some twentysomething clients, a brother and sister who were waiters. They saved all their tips and invested in property. They made a serious killing but they lived close to the bone for a long time. I have lots of friends who bought cheap in PDX 15 years ago. They have hundreds of thousands in equity just sitting around that they could be using to finance investment but they are too afraid or don't want to work enough to reap the rewards. These guys are crazy. Think about it 150k loaned at 5.25% percent. That's like stealing if you make a good buy. For example, if you took that 100k and bought a house for 350k that you were able to cash flow it, which you could easily do with a 250k mortgage in the Portland market, your return on investment, assuming an average 5% growth in value of property [historical standard], you'd be making between 14-18% on your money. That just crushes the stock market.
My point is that most people don't really understand how good real estate can be, especially if they start young.
AKA
Rich Dad, Poor Dad
AKA
LEFT LEAN AFRO
I definitely agree.....hard work, disciplined money management and knowing the market are the keys.
But for every success story, there are plenty of failures by people not capable/willing to adhere to the above guidelines.