Never too late to begin investing in real estate

After a full decade (or more) of postponing lifetime milestones like traditional marriage and moving out of their parents basement, millennials are finally demonstrating a strong interest in homeownership.
Our own Fox 5 real estate expert John Adams says that might open a financial opportunity that many millennials might not have expected:  financial security.
Q:  John, you have said that millennials will likely make up almost 50% of all home buyers this year. That’s a huge increase over their previous purchases and may signal a sea change in the financial behavior of this large generation.

Why is this such a big deal?
A:  Because for most Americans, owning their own home is typically the best investment they ever make.
Many millennials were emotionally traumatized by the Great Recession. They saw a large number of owners who experienced foreclosure and evictions and have been reluctant to embrace the responsibilities of becoming homeowners.
But that seems to be changing.
Q:  Does that present an opportunity for millennials?
A:  Yes, if they are willing to take a leap of faith!
Q:  How would this opportunity work?
A:  The next several years may present this group of young people with an opportunity to begin building financial security.
There might be several steps involved:
1.  A young person (or couple) might buy a home with the intention of painting, cleaning, and improving the house with do-it-yourself projects.  The idea is to make a silk purse out of a sow’s ear, adding value with each weekend project.
2.  After a full year of occupancy, refinance based on the new, higher value, potentially pulling tax-free cash out of the house, while still keeping payments low enough to make rental to a tenant a profitable venture for the owner.
3.  Then the owners begin the process all over again, searching for the worst home in the best neighborhood possible, buying the home with a new loan, and making improvements to the house over the next year while they live there.
4.  The investor can do this once a year for as many years as they wish, with the ultimate goal of building a portfolio of solid rental homes that consistently generate positive cash flow while slowly increasing in value over the years.
Q:  Is this plan realistic for the average millennial?
A:  Yes, if he or she is willing to learn and apply typical do-it-yourself projects like painting, cleaning, landscaping, and decorating.  THese skills are taught for free every weekend at big box stores, and doing it yourself saves a boatload of money.
Even so, I admit this plan is not right for everyone.  If you don’t want to learn new skills and you don’t know what a hammer is, this plan might not be right for you.
Q:  How can someone learn more about this process if they have never done it before?
A:  Here are some steps that are helpful and educational at the same time:
1.  Go to CreditKarma.com and investigate your credit score. Then talk to a home loan officer at your bank or credit union, and find out if you can qualify for a loan for your next home. Make sure you have everything ready to make an offer quickly once you find a house that works for you.
2.  Talk to real estate agents that specialize in finding and buying real estate bargains in neighborhoods that are attractive to renters.  Begin looking for ugly-duckling houses.
3.  Know that you will be seeing a lot of houses in order to build a basis for comparison with other homes in the neighborhood.  It’s a good idea to take notes on homes you have seen, and why they are desirable.
4.  Finally, know that you will likely need to make a lot of offers before you find an owner that is willing to sell at a price you can afford.  But that’s the way this game is played. You’ve got to find an owner who is more anxious to sell than you are to buy.
Doing all this in your spare time and on weekends will allow you to keep your day job until the day comes when you have replaced your entire job income with profits from your real estate rentals.  Buying a house a year is a relatively easy way to build your retirement income while you are still young.
Q:  So what’s the bottom line?
A:  Today’s low-interest rates combined with your patience and diligence can add up to an early retirement for anyone willing to do the work. Everyone has to live somewhere, and they might as well rent from you!
 
 
https://www.fox5atlanta.com/news/never-too-late-to-begin-investing-in-real-estate

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