what to do with some cash

[subby]

ok guys i have like 30k and i cant decide whatis the best way to make profits off it. i was going to get a HUD home (forclosed) and fix it up and flip it basically or pissibly even renting it out. im not sure if thats the safest way to go.i have thought stocks and CD's but the return isnt that great on CD's and im fairly new to investing in stocks.....

what do you guys/girls think is a good way to start a portfolio?

 

[pesty4077]

ok guys i have like 30k and i cant decide whatis the best way to make profits off it. i was going to get a HUD home (forclosed) and fix it up and flip it basically or pissibly even renting it out. im not sure if thats the safest way to go.i have thought stocks and CD's but the return isnt that great on CD's and im fairly new to investing in stocks.....

what do you guys/girls think is a good way to start a portfolio?

Well, I wouldn't invest in foreclosures without experience(you could lose your shirt) I invested when the market was good and made money. I am also a license contractor, and termite control operator and I do home inspections and termite inspections, so I know what I am looking for, and how much it is going to cost. Besides that real estate is a hard sale now. Renters? Been there done that, and won't do it again. Stock market, could be a good investment for a season pro now, but other than that, don't touch it. CD's with your bank is a good investment.(your bank is FDIC insured.)

 

[subby]

ya i was thinking cd but the return is only around 300$ for 6 months...idk...as far as forclosed homes.. if i go that rout i will have a inspector take a look at it and see what i would need to do to bring it up to code. experience takes practice.. and i gatta start somewhere.. my job sucks.. i got a good education and degree but just cant land a good career.

 

[pesty4077]

ya i was thinking cd but the return is only around 300$ for 6 months...idk...as far as forclosed homes.. if i go that rout i will have a inspector take a look at it and see what i would need to do to bring it up to code. experience takes practice.. and i gatta start somewhere.. my job sucks.. i got a good education and degree but just cant land a good career.

Well, I had a good friend who had a degree, lose about $15,000 her first deal, and that is when the market was booming! It is not that easy as you think. Let me point out a couple of things you probally are over looking, A real estate agent will charge 6% to sell that house, so let say it is $200,000 for that house, you just spend $12,000. Whoops, unexpected costs came up that the buyer wants you to fix, let's add $3000, because it is a buyer's market, they want you yo pay for their closing costs(lot's of forclosures on the market, they will not have a problem, there is another $6000. Do you see, where I am getting at? You want to throw your money away, I will give you my address LOL Stay with the CD's, it is a safe bet, for now, real estate is not. Take up some classes in investing in real estate in the mean time, Wait 18 months, the market will start rebounding.

 

[mung]

Are you in vibrant rental market? If you are young, not looking to sell anytime soon, start buying rentals. As Pesty said, they can be work, but worth it if your area is good. Anything worth having is worth working for.

I bought my first rental in my mid twenties, gutted the basement and attic myself, charged all the materials on my credit card and more than doubled the rent. Had it immediately appraised to show over $60,000 in equity. You have to be careful and know what you are looking for, but it can be done.

Also, if you want experience and your market affords the rentals, it could be a good introduction into the rental/flipping possibilities in your area. You could learn what to look for in flipping a house as you buy rentals. Grab a cd at your bank, borrow against it for a small down payment, only if you need it, and learn. I also made appointments with the president of the local banks in my area as an opportunity to introduce myself. They always turned me over to someone else for the application, but as young as I was, I knew it would help my cause if it ever had to go to loan committee. The president usually remembered me and it never hurt. Just something to consider.

I had 14 rental properties at one time and never used my money for a down payment and bought most all of them on contract with others holding the paper. Although interest rates are alot better now. But my area has a very strong rental market and can be tough to get into...but it can be done.

It boils down to your lifestyle and how much responsibility you want on the return. Yes, rentals can be a lot of work and bad tenants can be a pain in the ass. However, a good interviewing process, along with parents signature on the lease if they are young can alleviate alot of future hassle.

Good luck in whatever you decide and you may also want to investigate good investments when interest rates rise. We know as rates decline, precious metals rise...but that is over for now. Inflation is next.

 

[subby]

thanks man.. for the reply.. ya the market here is good for rentals as many people and families cannot afford a house. Most people are trying to rent( most of my friends rent and they could easily be putting that money on a mortgage) thats how i think. so i mite as well get a duplex or even a single family and rent it out. If i do get into it that way i will have a extensive interview and require refrences. Maybe even getting a decent family on homesite that guarentees the money every month.... idk yet... i kno hard work means money and im ready to get to work. i cant see myself working for the man my whole life. I want to eventually open a business, just cant seem to find one that would boom

 

[B1gJ1m]

Have you talked to any relatives or friends about referrals to a reputable financialb advisor. If you're like me and aren't that experienced in the market it pays to have a solid referral to an advisor that is well respected. I asked a family member who has done quite well in the market who they use. A week later I had an appointment and had everything explained in terms I could understand. What ever you do, you need to make sure the money is working for you and earning you more money. The less risk, the less earned. You may want to sit down with someone and explain your situation, your expectaions and together you can develop a portfolio that will give you good stable returns.

 

[Sassy]

You should look into a good financial advisor. Depending on your age... you might want to invest while the stock market is down. If you are about to retire, this isn't such a good time. You wouldn't have much time to recover your losses.

You should check out some for the threads on this board. Dad gives some excellent financial advise.

 

[mrsoul]

You should look into a good financial advisor. Depending on your age... you might want to invest while the stock market is down. If you are about to retire, this isn't such a good time. You wouldn't have much time to recover your losses.

You should check out some for the threads on this board. Dad gives some excellent financial advise.

amen. call someone at your local fidelity office and schedule an appointment.

 

[asleep]

Are you in vibrant rental market? If you are young, not looking to sell anytime soon, start buying rentals. As Pesty said, they can be work, but worth it if your area is good. Anything worth having is worth working for.

I bought my first rental in my mid twenties, gutted the basement and attic myself, charged all the materials on my credit card and more than doubled the rent. Had it immediately appraised to show over $60,000 in equity. You have to be careful and know what you are looking for, but it can be done.

Also, if you want experience and your market affords the rentals, it could be a good introduction into the rental/flipping possibilities in your area. You could learn what to look for in flipping a house as you buy rentals. Grab a cd at your bank, borrow against it for a small down payment, only if you need it, and learn. I also made appointments with the president of the local banks in my area as an opportunity to introduce myself. They always turned me over to someone else for the application, but as young as I was, I knew it would help my cause if it ever had to go to loan committee. The president usually remembered me and it never hurt. Just something to consider.

I had 14 rental properties at one time and never used my money for a down payment and bought most all of them on contract with others holding the paper. Although interest rates are alot better now. But my area has a very strong rental market and can be tough to get into...but it can be done.

It boils down to your lifestyle and how much responsibility you want on the return. Yes, rentals can be a lot of work and bad tenants can be a pain in the ass. However, a good interviewing process, along with parents signature on the lease if they are young can alleviate alot of future hassle.

Good luck in whatever you decide and you may also want to investigate good investments when interest rates rise. We know as rates decline, precious metals rise...but that is over for now. Inflation is next.

very well put. if you can hold on to the property until the market turns, then yeah, it is a good time to buy right now. august 1st i close on a house at the jersey shore for 1.375. i know the house is worth 1.8-1.9 when the market is right, and i can wait the few yrs for things to turn around. plus their is a back house on the lot, so i get two rental incomes and for a 10wk summer season i can get about 50,000 for the two rentals. that may seem like only a marginal return on the investment but that doesnt take into acct the increase in value of the property overall.
do your homework as you are (evidenced by this question) and make your investments carefully.

 

[subby]

thanks every1 .. ya im 23 yrs old. i dont have a very good job, i actually got the money gambling. i lost a lot also so i gave it up. i invested in sirus radio when i was 18 and i pulled the money out right before it started to drop. hasnt gone up since. idk if i like the stock market, pissibly because i dont kno enough and the bank charged me comission to sell. 40k isnt a lot of money to invest in properties but i think i can geta HUD for 30 or maybe a little more and make the mortgage. im going to call fedility and see if they can help me. i dont kno any local financial advisors in the town, but im going to ask around. last one i talked to was at a bank and what they told me seemed like korean. i read a lot of money news and mags also to try and better myself just cant seem to make a decision...

thanks for the replys -i kno their are a lot fo sucessful people on this forum

 

[Realize]

Wachovia is offering 4.25% APY on their cd's right now if you want to play it safe.

 

[Sassy]

Wachovia is offering 4.25% APY on their cd's right now if you want to play it safe.

How long do you have to keep the money in the cd?

Bankrate is listing the beat cd rate at 4.04% for 5 years... that's not that great when you can invest in a money market with Vanguard for 1 yr at 4.11%.

You are young enough to invest in some stock funds instead of something conservative like CD's. I still think you better off with stock or mutual funds because saving, money market and CD's don't pay very much. If you want to go with stock choose some that pay dividends and reinvest (DRIPS) the dividends.

The housing market is bad right now, and if you are able to buy foreclosures and use them as rentals until the market come backs, then you might be able to make money off it. Just be sure and do your research... get home inspections from a reputable company, background checks, CYB on the lease, check for zoning and neighborhood association covenants. It can be a lot of work, but if you are smart about it then you can be successful.

No matter what you invest in... be sure and do your research.

 

[Realize]

The Wachovia deal is for 1 year...as far as cd's you are not going to find a better a deal. Trust me I've been looking.

 

[Pekkerwood]

I am going out on a limb and disagree with Pesty which is probably not wise if you read the majority of his posts. I have bought over a hundred houses already this year and sold 80% of them.

There has not been a better time to buy in the last 15 or 17 years in my opinion. I am buying certain houses in subdivisions for less than it cost to stack the materials on the lot. In many places you can buy 15 years of equity today. I am buying some houses in areas for the same prices I paid 25 years ago. Now back then it was one at a time.

You do need knowledge. More important than the rehab costs are the values of the properties. Nothing is more important than the comparables. What are the listed homes selling for today, what are the sales of the last three months, what are the sales for the last two years? etc.

I do buy HUD properties, but that is not my primary source, but it is a good place for a beginner. If you decide to go this route I can give you some info via pm that will be of assistance.

The true power of real estate is leverage. If you put ten grand in a cd and get 5% return you will make about $500 (simple interest, non compounded). If you take the same $10,000 you can buy a $100,000 house. If you net 5% you will make $5000 or ten times the return. That is the power of real estate, no current investment allows you to leverage as much as real estate. Now with that power comes risk, with the cd you have zero downside risk, with the real estate you have a varieing level of risk that follows your skillset.


In this market, holding power is the key. I am buying some houses now not to resale, but to rent and sell two years from now. I am not expecting to make a profit on the rentals, but I expect to double my money when I do sell.


Pekkerwood

 

[mung]

I am going out on a limb and disagree with Pesty which is probably not wise if you read the majority of his posts. I have bought over a hundred houses already this year and sold 80% of them.

There has not been a better time to buy in the last 15 or 17 years in my opinion. I am buying certain houses in subdivisions for less than it cost to stack the materials on the lot. In many places you can buy 15 years of equity today. I am buying some houses in areas for the same prices I paid 25 years ago. Now back then it was one at a time.

You do need knowledge. More important than the rehab costs are the values of the properties. Nothing is more important than the comparables. What are the listed homes selling for today, what are the sales of the last three months, what are the sales for the last two years? etc.

I do buy HUD properties, but that is not my primary source, but it is a good place for a beginner. If you decide to go this route I can give you some info via pm that will be of assistance.

The true power of real estate is leverage. If you put ten grand in a cd and get 5% return you will make about $500 (simple interest, non compounded). If you take the same $10,000 you can buy a $100,000 house. If you net 5% you will make $5000 or ten times the return. That is the power of real estate, no current investment allows you to leverage as much as real estate. Now with that power comes risk, with the cd you have zero downside risk, with the real estate you have a varieing level of risk that follows your skillset.


In this market, holding power is the key. I am buying some houses now not to resale, but to rent and sell two years from now. I am not expecting to make a profit on the rentals, but I expect to double my money when I do sell.


Pekkerwood

Damn Pekker, a hundred houses! That makes me grin ear to ear...that is great! You need a partner? You in the Atlanta area?

 

[horizonchemical]

foreign markets with a stronger currency. the value of the dollar is declining. You will be fighting an up hill battle. It takes money to make money.

I wish I would have invested in gold 5 yrs ago

 

[bdp]

I am a financial advisor at a national recognized firm here in the states, and what I reccomend is 1) stay away from housing/real estate 2) Definately find an advisor... interview a couple and see what they can do for you.

A good advisor will look at your age, risk tollerance, goals and in turn build a model that best fits you.

Honestly a properly allocated protfolio will yield better results that one specific asset class. If you PM me I can direct you a little better.

Best of Luck!