Is Real Estate literally become rich for dummies?

Real Estate sounds like such an easy way to become rich, 2bh.

You just have to buy, rent or sell

sounds like you listen to too much Tai Lopez

"Real estate" is a buzzword for bums who want to sound smart. Most people involved in real estate don't make that much money. Also, it's an all-encompassing term, For example, that crackhouse in Detroit is "real estate" just as much as the high-rise condo in lower Manhattan.

>be landlord
>get rent money from the peons
>pay rent
;~;

People who get rich in real estate are killers. Like I'm sure some of them would literally murder someone for a deal if they knew they wouldn't suffer any consequences.

You need a decent bit of money to purchase said real estate in the first place.

But yeah, it can net you a pile of money if you're smart about it.

not anymore. the crash is coming.

all you need is a small loan of one million dollars from your dad and you're set for life

Wouldn't anyone?

Yeah once I save up enough I'll be buying up property in Chicago then sit back as the value quadruples once Trump cleans up the city

More millionaires are made in real estate than any other field so yes it is easy mode to get rich... assuming the market stays up and you get a deal and don't buy at the top of the housing market...

thanks zhang

the problem with it is
1: start capital
if you are putting all your money into 1 thing, then how are you going to make money on it?
wait a few years before selling it?
upgrade it before selling? thats a cost and risk in itself.
etc.

its not money in it unless you make great deals.

2: if youre renting it out.
maintenance and often need for upgrades if youre renting it to more people at once.
and maintenance can be a bitch. more people = more maintenance.
to make a profit you need to have a place where you can charge a lot for a crappy place.
a superb location is a must to make good money on this.
and thats fucking expensive in itself.

its all about start capital, and you need a lot! unless you want to start now and be kinda rich when youre 60.

I'm a commercial real estate broker. It's fuckloads of work. Land development is what you're talking about and you'll make millions on good investments five times and go bankrupt five more times off shit ones.

go get rich then bean

No, but investing in stocks is.

Nah. You need to be smart about your investments. Don't buy shit that needs work, make the seller fix it first. Make sure everything is up to code before you pay a dime. There's also the fact that you need money to buy the property in the first place.

Real estate is very similar banking imo.
>requires massive capital leverage to do anything serious
>returns increase proportionate to capital investment
>has practically no innovation as an industry
>once youre big its practically impossible to lose
Theres a reason the majority of the worlds billionaires are either bankers or developers

>>has practically no innovation as an industry
nigger developers literally build cities

Don't be stupid It depends. An Asian friend of mine basically buys houses on 15-year mortgages then pays for it with rent. He makes very litte money from his 4 renters however he literally only needed the down-payment and 1-2 months before renters move in.

TLDR: Real estate is a long term investment, quick short term gains are very difficult.

Whats that gotta do with innovation

Do you mean creating new things? Or creating a means of doing things?

I mean innovation within the industry, like how tech is constantly evolving, startups everywhere
Real estate is monolithic

you have to be smart about it
you have to know your market, your neighborhoods, your construction codes, your tax laws, your zoning laws, your rental laws (laws that protect tenants)
you also have to be good at filtering tenants if you don't want costly troubles.
also: being a handyman is highly suggested for first timers as doing the maintenance yourself can really help lower the running costs.

t. income property owner

It is really.

Brokerage is a secret, shh

That is extremely risky if he fails to get tenants hes fucked

Nah, something more luck oriented is. Like say, making a popular website. You're doing what tons of other people are doing but yours takes off and you become rich.

>More millionaires are made in real estate than any other field
Is this because it's the easiest or the largest? Also, which field has made the most people go broke?

t.sociopath

Yeah I suppose. I'd argue that they provide innovation in construction and architecture but all developers do is provide a medium for others to innovate

Not true. It's essentially investing in stocks, but much lower risk and much lower payout. It's slightly better than putting your money in a bank, only once you start making a profit the money is a lot better. However the payout will only ever be a tiny fraction of the price of the house, and it will normally take years to payoff unless you really know what you are doing.

If you want to make big bucks and not wait 30 years to see a significant return, then you will need to take more risks. You will need to predict increases in value and demand before they happen, which "dummies" won't be able to do before someone who actually knows what their doing manages it.

To Paraphrase from Martin Shkreli:

"You'll make more money learning a skill and making a business out of it than you will in the stock market or real estate as someone who doesn't know what they are doing."

This. So many people speculate there's an easy way to get rich, and then don't get rich. If you want to develop houses, you're in for a nasty surprise.

If you want to (just) buy then rent/sell houses... lots of people do that. Most of them aren't rich. Those that are rich aren't rich because of that. It's just an ok return on investment, same as stock trading or bonds but with a few nuances.

Well its kind of like this:
In capitalism there is capital and labour.
Capital is more important than labour.
If you dont have capital you need to sell your labour.

Which is why you don't go into Real Estate to get rich. You go in to develop capital and gain knowledge.
Assuming one has a business plan, you then move on with that.

For an average person property isnt a way to get rich.
Its a way to hold on to your wealth and get a bit of return

thats when you buys after or near the end of the crash

You CAN get rich of renting property, but as I've said, you'll need to be very savvy, and you will need to act preemptively, which always comes with risks.

People who aren't savvy are essentially just tying up their wealth in real estate. It's kinda like putting it into a bank in terms of practicality. The profit could be considered the same function as the interest you receive in a bank.

It's a long term investment, which for a while basically just locks up your wealth. Although, unlike just storing it away, there are forces such as appreciation of the value on the home, as well as the constant income.

Speaking of appreciation, that's another reason it's not a bad idea to sell, or in some cases rent. Appreciation for the average house is pretty slow, but you will eventually be making more than you would without it if you get the tenets to pay more, or you just sell it.

If appreciation on a property is expected to be low, then you should probably rent it. If it's going to be high, then selling might not be a bad idea. You can always mathematically find out which one will make you more money.

Although in some cases, towns collapse, or industries that properties are built around may go under. Depreciation can occur in these scenario, so as with all investment, be sure to account for the risk.

Well... I got a bit carried away here.

cap rate on residential is ~5% in the US, commercial is ~6%. in most cases you can do better in the stock market.

Very much this. While if you are on top of your game you can generate quite the profit in real estate, on the whole it's a low risk low reward investment. Think precious metals, but perhaps slightly more risk and reward. The real boon is what you learn and the mostly consistent income you get from rent.

Not everyone understand the old adage 'spend money to make money'. That's the crux of it.

Then again, real estate might be more manageable for someone who isn't 100% sure of themselves and happens to have capital.

And by 5%, do you mean 5% of the initial value of the estate per year in capital or?

My mom is a real estate agent. She has a pension, social security, and her real estate job and she STILL struggles to pay bills. Any job related to real estate is shit.

The best thing about real estate is it's one of the only investments where you get 80-90% leverage from banks and you can make a return on that leverage for instance you buy a 200k house.. you put 40k down but you get that extra 160k in value... lets say you pay 1000 per month for mortgage+taxes+insurance... It's a 3 bedroom house and you rent it for 1600 per month.. You are netting 600 per month and paying off a mortgage of 200k that will most likely appreciate.. not to mention inflation due to an increase of the money supply also depreciates the value of the loan to the bank... Real estate is the smartest and safest investment long term as long as you buy in a city with long term growth potential.. Always buy in markets where people are going to move to in the future, not move out of.. Supply and demand stuff

>Very much this. While if you are on top of your game you can generate quite the profit in real estate, on the whole it's a low risk low reward investment
Which was my thought. With the Lord's blessing I seek to get securities, appraisers licenses and a brokers licenses. I want to really diversify my real estate skill and knowledge, as in, transaction brokerage, listing, and I would like to look in to subdivision development.
I have other business ideas thatll be formed and managed on the side, if I am blessed.

>which field has made the most people go broke?
Don't know for sure but I'd bet my entire small loan of a million dollars on medical technology.

Do not EVER invest in medical technology.

>Always buy in markets where people are going to move to in the future, not move out of
A good rule of thumb Ive noticed is cities that have Headquarters of fcukhueg companies in it or nearby. For example, the Seattle/Redmond area. Or Fayetteville/Rogers.

He means that the real estate industry has no innovation.

The way it is today is the same way it was at this point in time a thousand years ago, just with e-mails and phones. Buying, selling, and improving land is a perfected craft with very few exceptions.

Where can you get 12% return on a rental though

The such methods as the MLS are an indicator the there is innovation, but it just isn't forthcoming. As you say its hard to innovate in something that is just basically showing and talking.

>Appreciation for the average house is pretty slow,
Houses don't appreciate.

Land appreciates.
Structures depreciate.

Well its basically just buying land and renting it

Not that difficult just have to find a solid area.. In Texas not hard to get 10-12% profit on a rental if you are smart.. then again our real estate is much cheaper than california and new york, etc.

Hell, what if he gets total shitbird tenants who end up trashing the place and decide to stop paying rent? Security deposit only goes so far, and civil judgment is only good if you really want to spend time pursuing it.

>Dubs

You are blessed mate.

Kek speed you forth.

well owning property is always better than renting simply because of the fact that you're building equity with it. Although you do take on additional costs by owning (repairs, property tax) in the end the fact that you're building equity is going to make you more money than renting even with those additional cost burdens.

Plus you also stand to gain if property values are statistically on the rise. Put it this way, I had a friend buy a small house, around $200k, he put, I believe $20k down on it that he had saved up, and his mortgage was something like $700/month. After 2 years he decided he wanted to move to another city so he put his house on the market, and what do ya know the price had increased to around $235k which he sold it for. So in 2 years he made a ~$25k+ profit (after fees and expenses deducted) and essentially lived for free in the house (no lost rent money)

Whereas another friend I know had been renting an apartment for $650/month, so in that 2 year time he lost $15,600 just by living there and paying his rent.

You should always buy if you can. Once you can afford to buy multiple properties, do it, and rent them out. If you can end up with a handful of rentals when you reach retirement age it's the best retirement plan anyone can have.

Are you going to become a real estate mogul and get stupidly rich doing this? probably not, but you can get above middle class and certainly become well off in your later years.

Being a real estate agent is a shit tier job for losers.
We're talking about about investing in property, not just being a salesman for someone else.

For instance a 3 bed 2 bath house in decent condition in texas can easily be bought for less than 100k.. and with loan+taxes+insurance sitting around 600-700 a month and can rent that out to 3 college students for like 1500 a month or to a family for 1000-1200 a month.

That's too simplistic. There is selling land, buying it, renting it out, managing the rentals, developing land etc
Land, Industry, Commercial, Residential, agricultural, etc
All of these are big enough that one broker can specialize in just one, and many do. There is also ALL the federal, state, local/county/school district laws and statutes that one must know and will be held to. Its not so simple.

Yeah, good point.

But all and all you investment should appreciate. Unless it's an apartment in bum fuck nowhere.

A house in a developing suburb is a good long term goal, especially if it's the average Australian plot with a nice back yard and a well build brick house.

And I say average because people who live in the cities don't count as real Australians, or real people for that matter and do not factor into the average.

Real estate is a way for the financially well off to invest their money in something that (presumably) holds its wealth or increases in wealth.

To make a living off "buying and selling" you either have to flip houses which involves either hiring folks to improve the house or DIY. Or go years without an income waiting for your property values to increase enough to make decent capital, all with the chance of the market crashing and you losing everything.

All the people I know who have made a living off "real estate" were contractors / carpenters themselves, who got enough connections in the carpentry / contracting world, had their own tools, a large amount of start up capital and entered a rising housing market. They then purchase properties, rent them out, do slight improvements for cheap due to personal know how/ personal tools/personal networking within the industry, and then finally sell during a time when (typically Chinese) investors are buying up mass chunks of land and are willing to pay over market price without even seeing the house.

Not a good career choice for someone without background knowledge and $50-250K to throw on the line.

Its smart to hold that as an investment in land but not for the cash. Things are bound to go wrong and things will break. Youll also have taxes and such. One might be wise to hold the extra cash after the bills for the property are paid and sock it away into a saving account. After the tenants lease is up and they gtfo, take half the savings and improve the house in a smart way.

FUCKING CHINESE GET OUT OF MY LEAF REEEEE

>get billion dollar loan
>use it to construct a billion dollar hotel or building ther will pay it pay it off
>profit

>landlord
it sounds so special

Sure theres a lot details involved but the fundamental idea is just buying a good piece of land by throwing money at it, building a structure by throwing money at it, then renting it out

In a not so thriving market making 2-3 million in sales yearly isn't hard. If you average 6% as commission even splitting some of it will let you live okay. Do the math.
that requires real estate experience and knowledge.
kek can go away, I love the most High God

HUSH!

Real estate investor and successful general contractor here.

Anyone have any specific questions?

if everybody is renting and no buyers this wouldn't happen and the bubble will burst

stop buying, keep renting

More or less, but the details are more important. Without having toed the line perfectly youll get screwed hard.

if you understand how to manage the building, maintain it, and get a good return then ya its a blast. you look for a few hours a day and then chill out and do whatever you want.
>T. Real Estate Investor

I am a real estate investor.

AMA

is it worth it to get the SEC license for investing in Real Estate?

Sydney if you bought 10 years ago lel

when you wipe your ass when shitting, do you fold the toilet paper into neat little squares or do you roll it up in no particular shape?

I own and rent out 5 different locations and i'm not rich.

Are you accredited?

I own a firm here in Chicago and its not easy.

If it was so easy everyone would fucking do it.

I have flipped 20+ properties since 2012 and I am holding 12 more.

My group sold over 100 in 2016.

As in?

I have over 20 rentals in a major US city and get a pretty penny from each of them every month. Only have to upkeep them and not get niggers in them. Niggers are literally cancer for renting they care not for the place and will break shit and not pay for it. Other than that life is pretty easy. I inherited most of them.

How are you guys dealing with the new FHA regs? My demographic is 90% FHA buyers and the 90day compliance for doubling a purchase price is kind of fucking me.
Also the under 6months double value requirement of two appraisals isnt a killer but holds up the process and pisses me off as well.

nah don't worry, the thing is that most people KNOW they should buy, they just can't. Usually most people can't even come up with the down payment these days because they're living paycheck to paycheck.

If you're one of the fortunate enough ones making good money and have low expenses and you can afford to save $10k, 20k, 30k in your savings account you should definitely look to start paying a mortgage instead of renting. Most people can't do this.

As in do you make over 200k a year or have a million dollar net worth?

It's the "safe" investment option.

High cost, low risk, low reward.

Most countries massively screw you after the 2nd property you rent out in taxes.

Tenants are often degenerate assholes, screening for good tenants takes ages, agencies take a chunk of your profit and often still find you garbage trash tenants.

The only actual benefit of real estate is the fact that there is basically no risk, after inflation however you're basically making garbage.

Most profitable average joe real estate profit from buying cheap, run down houses at auction to be refurbished and sold or rent or already have a huge solid existing connection base in the housing industry.

Or live at home
>mfw married, living with my wife in my in laws house, also with 35 yr old single brother in law

Well no. Im talking about for the knowledge

90% FHA buyers sounds shit, but ill be your huckleberry.

We sold 11 out of 106 FHA last year, most use FHA for multi units, live in one fix and rent out others, refi and repeat.

>New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA's 3.5% down payment program
New borrowers with less than a 580 credit score will be required to put down at least 10%

People under 600 Credit score should not be buying fucking homes, that's how we crash markets.

Biggest problem now is all the new DTI ratio rules, student loans count now, credit card minimum payments, and discounting overtime which is shit.

You can have an awesome life as a real estate agent. You can work your way into the upper middle class easily so long as you have people skills and know how to sell. As for the people who get RICH from real estate, they're able to do so because they're already rich. They're able to leverage enormous sums of capital over a very prolonged period with no expectation of return for years or even decades.

>risk
>low
>high
>reward

All subjective terms.

I bought a house in october for 85k cash, painted the oak cabinets with some precat white lacquer using an HVLP, pole sanded the walls and textured like a mexican, painted the inside and outside, kept all the doors and painted them with an airless sprayer, laid some laminate flooring in and was out in a month after some guys threw sod in the front lawn.

Just closed and signed the sale after having mutual acceptance in the first 4 days on the market (takes forever with new FHA regs in closing if you double the value within 90days)

Net - 50k - one month.

Pic unrelated.

This, everyone I know who made a fuck ton in real estate.

Already had money.

The few that are now rich, have made solid investments over 15-20 years.

You are an idiot.

>Buy
Gotta have either capital or credit.

>rent
Tell me how that's going to work for you when state laws take the side of the single mom with her live in black boyfriend on stellar credit with limited income and you cannot discriminate, then she defaults on payments

>Sell
Nice job taking a loss and using the tax system to cover it up.

Yeah... Real estate is an "in" game. Unless you have real contact, or a small fortune to start with, you ain't got shit.

fuck me you can't even buy a shit condo here for under 100k.

>Credit score matters, let me virtue signal here
>Debt to income is shit....

Pick a side.

I live in a fuckhole on the west coast of Washington State. People that buy homes here are paying 100-120sq ft, are drunk and work at wood mills. Trust me its 90% FHA.

>Nothing drives down real estate prices like a good old-fashioned gang war.

Was he right?

100-120/sq ft here for something decent. There isn't a box store for a 30minute drive in any direction. There is trade offs but I enjoy my life here.

DTI only overtime rule is shit. If I make 100k extra this year do to sales, that should count as income.

New construction here sells for 325-350, decent stuff can be found in the 260-270sqft range that needs a tiny bit of love.

I actually find deals all the time and can't find enough contacts with capital.

I am spread thin myself, I am partner on 4 current flips and under contract for a new hold.

No, your knowledge should come from getting in and your hands getting dirty.

Unless you have a small loan of a million dollars you wouldn't need to know about that kind of knowledge for awhile down the road.

Find an old real estate mogul in your area... make friends with him. Find a good agent that has rapport with the community and make friends with him/her for the knowledge.

Talk to local contractors about people they know that buy houses.

Find another agent that will open up houses for you to look at. Start crawling around under them, looking at how they are built and poking for rot in the joists, look up if each property requires flood insurance or it it has been used as a drug manufacturing facility.

Crawl up in attics, look for sags in the sheeting or leaks/rot.

Call a local electrical contractor and ask them questions about how to determine if a panel needs replaced ect.

These are all things you will want as a foundation for when you have enough money to not fix these things yourself. But you still need the seasoned eye for it.

Go knock on neighbors doors of the houses you are interested in and ask them what they know about the property and if they know of any problems.

Is it on city or septic for sewer?

City or well for water?

Call a local septic company and ask if they have records of the septic or if they have pumped it.

Get a moisture meter and learn how to use it.

Buy a small laser level off Amazon and shoot it inside the house to check the floor level.

Is it concrete or post/block foundation?

Save every fucking penny you have, sell any car or truck you have outstanding debt on, pay off all credit cards and start building your capital.

Find out if there are any local old guys with a lot of money that are venture capitalists that you could borrow from, read every book you can on real estate while always trying to only eat the meat and throw away the bones.

Solid list. Reminds me a client I have now that spent 20 years flipping in Charleston SC.

i think real estate as investment is a blue pill

BUY CHEAP
SELL EXPENSIVE

Have you ever bought property at real estate auctions?

I know a guy who's dad buy luxury houses and land from the banks pretty cheap

I've only borrowed once to build a spec home. Was okay I just don't like debt. Since the houses here that are deals sell for about 60-90k I just use all my own cash and can have a couple going at a time with just me and a few employees.

Honesty man I'm shooting fish in the barrel here. People lose their shit if you put prefab chinese granite in a home and some decent cabinets with a funky sink. I haven't had a house sit on the market for over 2 weeks. I always price them incredibly competitive and have a line of people to buy homes. I sometimes wish I could break out into bigger areas but there is just too much competition. I have no competition in a 30mile radius except the occasional husband wife duo that wants to try their own "Property Brothers" renovation shit they saw on tv.